Starts in < year >. I went to a shopping center which had a food court for lunch and as I was walking in I saw a older man at a Kiosk selling a Jewelry cleaner. He dragged me in and he had this whole nifty little sales pitch.
I'm a sucker for a good sales person, and he was good. You ever seen videos of that famous potato peeler sales man in New York City (NYC)? This was the same type of system but with a liquid jewelry cleaner. Anyway I bought a bottle of this stuff and off I went.
I took it home to my then girlfriend soon to be wife and showed it to her. She liked it, and it worked really well on her jewelry.
A week or so passes I go back for lunch to the area again, same man is there. We chit chat for a bit. He seemed like a nice guy. This repeats the following week, this time he invites himself to lunch with me. We get to talking, he mentions how he has some bills and wants to a bulk sale.
At the time I was trying to get my girlfriend to do something productive. Long story short as I feel this might be a long post I bought out his supply for $750. This included the solution, the bottles, the stuff he used, and a sunday of learning how to mix/sell/etc.
Lets go to retail
I did some thinking and some looking. I didn't really want to sign up for a Kiosk somewhere as I didn't want to commit that hard to this product. We had 3 sizes 100 ml, 250 ml, 500 ml. So we found some flea markets and you just had to pay for the table and setup and sell.
So we started doing the flea market scene, and we sold product. We made money, but it was a lot of work for what we made. Also another thing dawned on me.
This shit lasted forever. The 500 ml bottle was $14.99 the 250 ml was $9.99 and the 100 mll was $4.99. The issue being if you bought a 500 ml bottle you'd basically spend years going through that bottle. So as we'd sell the product we were basically eliminating customers.
After talking to the old man, his trick to success was traveling. But that wasn't on the table.
So we shelved the idea, by this point we had basically recouped the $750 (I actually don't know if we did…but it would have been close)
6 months passes
Life goes on, 6 months (or so passes) when one day my friend invites me out to dinner and drinks with a friend. Guys night out.
Turns out his friend is a general manager at a local privately owned jewelry store. We get to talking about business and he talks about how he's frustrated by customers wanting discounts and how often times the only way he can close the deal is by offering a discount.
This sparks an idea in my head, but its not really fleshed out and I don't want to pitch it right now so I ask him "If I had a way for you to give out less discounts would you be interested in hearing me out?" he said "Yea sure I'd hear you out" we exchanged info.
Flesh out the idea
So I have a background in sales and marketing and have been through quite a bit of sales training and one thing I learned at one point was that gift giving can be a way to head off discounting a product. A $5-$10-$25-$50 gift can sometimes present more value to a customer then say a $500 discount.
So I have this jewelry cleaner, that honestly I'm not interested in retailing. The fact is this cleaner…is not that special so its not like I have some protect-able product here. However what if repackage this product as a gift for Jewerly stores to give to customers?
I find some cute 30 ml bottles, I find some nice microfiber clothes. small ones. I also find a little package I can put all of this into.
All told I can buy enough (minimum order which could make 200 sets) bottles, microfibers, and containers and my cost per package would be right around $2.50
So I buy everything and I produce 50 little "Gift Packages" of a Jewelry cleaner, a microfiber cloth, all in a nice little bag. I print up some labels and title them "Jewelry Cleaner"
I then do some googling, pull up some articles talking about gift giving in sales basically dig for proof that my idea WORKS.
I call up my new friend the general manager and tell him I got a way and an idea for him to get higher margins by offering less discounts and I want to show him.
Going into the meeting I had a targeted price point of $5 with a min purchase of 50.
I go into the meeting I start by showing him the cleaner. I show him how it works, how shiny and pretty it makes everything. I then show him my evidence how gift giving can be used to counter discount requests. And I walk him through a situation.
Customer comes in, $3,000 piece of jewelry. Customer says he's going pay $2,500 you counter with "I'm sorry sir we are quite firm on the price, however what can provide you is this free jewelry cleaning kit so you can keep your investment pristine" (Pitch was better then this)
If a customer doesn't ask for a discount, give it away as a gift as a thank you.
He asked me how much I said min order is 50, $5 a kit. He counters saying $3 (I'm not about to make .50 cents a package) I counter with $5 and I'm firm he goes "$4" I go "lets slip the difference at $4.50"
We shake hands he pays me $225 and I hand over 50 kits.
3 Weeks later
General manager calls me, says he loves the kits his sales rep have almost given them all away and he believes they are working. He works another 150 kits and wants to know how fast I can get them to him. I say sweet, need a week to deliver.
He then tells me he doesn't want my crappy art work on the bottle, but his own brand. I know a graphic artist (the one I used the first time) can take his logo/print it on stickers and we will put his brand on the bottles. We get his logos printed, and it was basically a straight pass through (whatever the cost for the stickers was he paid)
2 weeks later (it took awhile to get the stickers) we deliver 150 kits.
I see a real business here. I got a product, I got a customer, I got a system setup. I do some more research buy spending about $1,000 on bottles, packages, and microfibers I can get my cost of a package down to about $1.65 if I remember correctly.
I do the order, I then put together a little outline of a power point with stats and examples and research on a one pager (back and front) with my contact info on why my product is a great product for jewelry stores to give away for free.
Time to hit the streets
I took a week off from work, I loaded up my car with 500 packages, I had another 1,000 packages ready/in production at home. With more capacity available.
I map out all my jewerly stores in my area and go door knocking, after a week of busting my ass I have a bunch of contacts.
I cold call those contacts until I can get meetings. I scheduled about 14 meetings. Most of them happened, most stores bulked at my offering however I picked up 3 clients all who purchased around 100 kits each. At an avg price of $4.50-$5.50. (I Had created a price sheet, encouraging larger orders)
I had 4 different stores ordering from me, each spending around $500 (at the time I was guessing) a month with me. With an avg margin of 65%-70% (not factoring in my labor of course) Basically a really solid side hustle for me, I was bringing anywhere from $1,000-$2,000 a month and my then girlfriend was doing most of the production and I was handling the business side of things + delivery.
5 months passes
I had added another store on my client list, I was now bringing in about $2k a month when my first client called me up. Told me every year all the jewelry stores in the region would come together for a little conference and they would also have vendors come show of their products and pitch their ideas. It was $5,000 for a table.
$5,000 was a serious chunk of change to consider, but the way I figured it the business had funded it and it was worth the risk.
I had flyers with my research (basically my one pager) I had created before and after pictures of dirty jewelry/after cleaning and I had gone to 3 of my clients and got them to agree to record a quick testimonial on what my product had meant for their bottom line I also got them to agree to be a reference for any store that wanted to pick their brain on my product, how they used it, and what it meant to their sales. (In return I bribed them with 50 free packages)
Conference comes around, never had any clue we had so many jewelry dealers show up. I actually got quite a bit of interest in my product. One guy in particular wanted to retail my product online but wanted slightly larger bottles. I also had a grand total of 20+ stores tell me they wanted to sit down and see if my product would be a good fit.
• One very large order from a guy who wanted 5000 100 ml bottles he plan was to retail my cleaner (I'm fine with this) I agreed to sell him the bottle whole sale for $2.25 (my cost was just under $1)
• 11 stores agreed to buy my packages, this was a grand total of 1,500 packages.
All in all I had a $2,000 monthly steady stream from my clients before this. I had one large order for just over $11k and 11 smaller orders for a combined business of $7,125.
Time to get a shop and an employee and legitimize this business
I worked with a lawyer and we created an Limited Liability Company (LLC) to protect myself, I then rented out a small shop and I hired one of my wifes friend to help us out with production. We setup a system of production and started knocking out orders. It took us some time to deal with the influx of orders but we eventually got it under control. We also had logistical issues with printing of labels/getting them on which I worked with my printer I used to solve.
Basically we would charge a one time $500 fee if they wanted order their own logo and we'd print up 1,000~ labels for them. We'd then charge an extra .15 cents a package for every package after that for packages with their own branding on it. Very rarely did we even have to reprint the brand labels.
A year in
I had a "factory" about $6k in income per month, and a reliable "employee" we could call in to work for us when we needed it. After every thing was said and done were clearing anywhere from $2k-$2.5k a month.
My now wife and I sat down and we talked about growth, we had some fixed costs that weren't changing for the foreseeable future and honestly we would like to one day grow this business to something we could support ourselves on very comfortably and had a goal of about $15k-$20k a month in profit.
Our big hope was the guy who ordered 5k orders. The issue was our product didn't sell that well for him and he told us he had no intentions of repurchasing from us. However what was working was the jewelry stores giving away our product for free (and we later found out a FEW of them were retailing our product but not many) so the direction the company had to take was to focus on what worked, get jewelry stores on board to give our product away for free.
We created a referral program where every min order a jewelry store referred us to resulted in us giving them a courtesy 25 free packages on their next delivery. Over time we grew our network to 20~ stores.
Another year passes, conference time again
Conference came up, we signed up again. This time we had an even more powerful presence. Long story short we ended up with about 35-40 stores ordering from us monthly. After doing a lot of digging. I felt we had reached a point where our current logistics limited us.
We were in a funny space, we were bringing between $10k-$15k in revenue with a net profit of somewhere around $6k-$7k. In order for us to grow we had to get out of the region. The challenge was I made a really good living at my day job and would have to leave that job to really grow the business. However we were having the conversation about possibly having kids, and so forth the stablity of 9 to 5 was attractive and at the end of the day putting $6k-$7k which was partly a part time job was an attractive offering.
So we made the choice to sit on the business, add clients where we could but maintain our customer base.
Part of me wishes I'd have quit my job and gone into this full time…but decisions are decisions.
Relationship goes on the rocks
Keep this section breif, after about 2 yrs our relationship was on the rocks. My job was sucking. I was in a bad head space. This affected our business, we lost some clients because of poor service on our part. It didn't take losing many clients to have our fixed costs to have a huge negative impact on our margins.
I wish I could tell you things improved but they didn't. We ended up getting divorced and through neglect the business fell apart. My ex wife had a lot of influence in the area, and I made the decision to pack my bags and move.
That was the end of that.
Details that I can remember on the business
I sourced my bottles, microfiber, and bags (that I put everything in) on alibaba or whatever that site is called (you guys know what I'm talking)
The cleaner that I used was a mixture of something called purple something (It's been a few years, and honestly we bought it like twice) that was the base concentrate we would then mix it with water and window cleaner, now windex cause I believe we needed window cleaner with ammonia/or other scents in it.
The cleaning solution itself…honestly wasn't all that impressive all things said. I mean it worked, but it wasn't revolutionary by any means of the imagination. And the cleaning solution itself was "almost free" a small amount of the purple cleaner with a couple bottles of window cleaner would make like 5 gallons. Per bottle cost came in at like 1-2 cents for the solution. Most expensive part of the package was as follows
I also found it very cost effective to order the window cleaner in bulk, at first we were buying straight up from the store but we saved a pretty penny by buying in bulk.
• Package (bag, which we would change at store request/etc)
• Solution was a non-cost consideration (basically it was so minor I didn't even think about it)
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