There's an old joke which I first heard at a manufacturing firm where I worked in the early 1970s: "We lose five cents per manufactured unit, but we make up for it in volume".
I would like to avoid the fate of that mythical manufacturer in the joke, so I'm trying to figure out how to sell for a sufficient price to make a profit, and how to effectively test market product and refine my advertising.
One difficulty I have is that I'm initially working with "drop ship" wholesalers. The wholesaler stores the product and fulfills the orders I receive. The advantage of this is that I avoid the time, expense, and hassle of storing inventory and processing orders. The downside, of course, is that single item drop ship has a lower profit margin. What I have to figure out is how close I can cut my margin without losing money, in order to make sales.
Within a couple of weeks I'll be ready to start a limited test sales campaign using google adwords. I'll post my observations here.
The fellow in the photograph accompanying this article, by the way, is Isambard Kingdom Brunel, the great 19th Century British civil engineer. He worked on the Thames Tunnel, supervised the construction of many railroad lines and bridges, and developed the modern propeller driven ship. I was looking over my collection of public domain images for an appropriate illustration, and thought that this photo of Brunel is a symbol of commerce and entrepreneurship. That, and I think his hat is really awesome.
