- Green Belt
- Posts: 217
- Joined: Tue Jan 27, 2009 1:11 pm
I've been thinking about this business model.
Maybe it's old hat/simplistic.
But I've ebeen thinking about the orthodox box-store model,and all that's involved,in terms of overheads over and beyond production costs,and the inventories that are required to be on the shelves,through licensing or self-manufacture.
I was wondering about how many units have to be sold over what period of time to break even and then go into profit,the scale of production that's required to maintain this,and the uncertainties and fickleness of the market-place,the marketing and advertising costs,labour etc.etc. to sustain the operation.
It seems that the cost of production,distribution and retailing and ancillary costs mean that a certain market size is required.
So the orthodox mass retailing model is predicated on a market demand and strong indicators of this demand to justify rolling out a new product.
This mass-market retailing model is also dependant on branding marketing and advertising to keep the fires burning.
So it is a high cost business model.
Overcoming consumer resistance is a big cheese.
Theoretically,say you found a market for your product[the invention-based product-affordably produced and reasonably priced,drop-shipped]then how does your break-even point compare in terms of sold units.
By taking out a swathe of costs,your business model offers an interesting opportunity.
Building in scalability,both up and down,offers a more flexible model.
The bottom-line,really,is that as inventors,we want to make some money,i.e. benfit from our inventions,rather than being ground down and busted by them.
So we start small and practical and stay that way if it suits us-or not