Ever since I can remember, I’ve had this ‘entrepreneurial’ attitude. When I was 9 years old, I would visit my local pottery shop and purchase a dozen un-baked coffee cups. I would then draw cartoons on them and would then bring them back to the pottery shop to have them baked.
I’d eventually take them into my local police department or church … and sell them. I did sell a few, But I never really made a profit. The price of the actual mugs, the kilning and paint all cost much more than what I made from sales. This is the same dilemma I have in the retail world. I’ve been selling my own logo design software product in retail stores such as Fry’s Electronics and Office Depot for a few years now.
The boxes each cost (roughly) $3.00 to design. This includes the cardboard, the CD and sleeve, as well as the burning of the disk …and putting in the ‘filler’ to make the box appear strong and sturdy on the shelf.
You can hire a local designer, or find one on the net from companies likes elance.com or moonlighters.com. A designer may charge upwards of $2,000 to $7,000 to design the box! (I’m lucky enough to be able to design my own boxes). A good rule of thumb is that you’ll most likely spend $3,000 for 1000 boxes.
1,000 units is the least amount you’ll be able to print. This can add up when a large chain like Fry’s Electronics for example has 1200 stores around the country). Each store could order a minimum of 5 software boxes. That’s 6,000 boxes! … At $3 a pop! Do the math and it’s crazy if you’re just starting out.
Once the boxes are manufactured, there is “Shelf Space” to deal with.
Not all fo them, but most retail chains like you to buy this shelf space.
Shelf space can get as pricey as $6,000 for just one software product! (You need to sell a lot of product to make up for this. And THEN, you’ll find that the retail chain requires it’s cut. Sometimes up to 20% … it gets crazy.
Why the net is taking over
This is why the internet is so great. There’s very little overhead other than your own time and talents. I even use an external eCommerce company to handle my transactions. They take 17% of my monthly sales. …but it’s WELL worth it.
This is the great thing about creating downloadable software – or anything you can create once and sell a thousand times. An eBook for example. The Retail world used to be king, but I’m putting my money into the web.
It’s harder to market yourself online since there’s a ton of competition, but that’s where SEO and SEM come in (Search Engine Optimization and Search Engine Marketing). A great topic for a future Article.
Marc Sylvester – Owner and operator of Laughingbird Software. Come find out more about The Logo Creator – logo design software for Mac and Windows!