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Selling Products as a Service-Based Business
 

Selling Products as a Service-Based Business

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Julie Johnston of 327 Creative spoke at the August 2009 Member Meeting about selling products as a supplement to a service-based business.

Julie Johnston of 327 Creative spoke at the August 2009 Member Meeting about selling products as a supplement to a service-based business.

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    Selling Products as a Service-Based Business Selling Products as a Service-Based Business Presentation Transcript

    • Selling Products as a Service-Based Business Julie Johnston, 327 Creative
    • The Situation Every client is unique. Every price is unique. Every project is unique. Every sale is a personal, one-on-one transaction. There’s a process, but it can be inconsistent and inefficient. Margins on services can vary depending on the project, so income is hard to measure consistently.
    • The Alternative: A mix of service and product offerings
    • OPTION #1 CONVERT EXISTING SERVICES TO PRODUCTS
    • Why service-based products? Efficiency: Ideally, you already have a process or infrastructure in place. Familiarity: These products are closest to the things you’re already selling. Profitability: Existing clients become qualified leads for new offerings.
    • What to sell Something you’re passionate about Something that makes you unique or sets you apart Something you can easily outsource or automate Something you’re already doing
    • Examples Designers and Developers: web hosting, e-mail marketing, social networking, search-engine optimization, advertising campaign management, templates Photographers: retouching, wall displays and space planning, mounting and framing Copywriters: style guides, canned e-mail responses
    • PhotoCart Install on your own Web site Use lab of your choice for fulfillment Set up packages, private galleries, etc. One-time fee (no subscription costs)
    • iStockPhoto.com Audio, video, photo, vector Must pass portfolio review to sell Earn more on exclusive files SEE ALSO: veer.com fotolia.com shutterstock.com
    • ThemeForest.net PSDs or coded versions of Web site templates Earn more for exclusive files SEE ALSO: FlashDen.net AudioJungle.net VideoHive.net GraphicRiver.net
    • Inkd.com For print designers Connected with customer to modify design Specs provided so templates are consistent
    • CampaignMonitor.com White-label admin You can offer templates, or let customer go to town CM handles billing, you decide mark-up
    • OPTION #2 NEW PRODUCTS - BUSINESS OR PLEASURE
    • Bestsellers? Info Products Low start-up costs Quick to create, quick to market No inventory to worry about Delivery can be automated Immediate gratification No “shipping and handling”
    • What are “Info Products”? eBooks online training and education videos recordings electronic templates software fonts icons
    • Examples Designers and Developers: “Photoshop Basics” eBook, CMS training videos, frameworks and internal applications Photographers: Actions and presets, marketing plan Copywriters: Travel guides, grammar podcats REMEMBER: In the world of products, your competition can be your customer.
    • Not into info? Get creative Always wanted to start a clothing line? Get your feet wet. Friends ask about that cool poster you designed for your office? Sell them one. Love to craft? Craft in bulk. You get the idea.
    • Lulu.com Publish both digital and print versions on demand Can also publish digital media (CDs, DVDs) SEE ALSO: Blurb.com
    • E-junkie.com Integrate lightweight cart into existing sites Flat monthly fee (no bandwidth limit)
    • Imagekind.com Upload, set price, done Earn commission on finishing Facebook Connect Premium accounts for more customization (starts at $7.99 a month) SEE ALSO: redbubble.com
    • Etsy.com Handmade, vintage, supplies Insertion fees similar to eBay Innovative navigation and active community SEE ALSO: 100markets.com supermarkethq.com
    • CafePress.com Insane number of products You set mark-up SEE ALSO: Zazzle.com Spreadshirt.com Printfection.com
    • OPTION #3 SELL JUST ABOUT ANYTHING
    • The drawbacks Inventory HIghest up-front costs Labor and maintenance Possible equipment and development needs
    • The advantages Established brands, often with their own marketing Decent profit margins Less pressure to be creative Can help sales of your own products
    • BigCartel.com Your products, their backend Free to $19.99 a month Limited # of products SEE ALSO: Shopify.com
    • Mpix.com Photos and high- quality image printing White-label drop ship Wholesale pricing SEE ALSO: whcc.com bayphoto.com
    • PinballPublishing.com Allows ganging of designs PMS and CMYK soy inks SEE ALSO: uprinting.com jakprints.com
    • Shopping Cart software Not for the faint of heart Follow security guidelines magentoecommerce.com cartkeeper.com zen-cart.com oscommerce.com ubercart.org virtuemart.net
    • Shopping Cart software Features to look for: inventory management easy-to-customize design search engine friendly product options (size, color, etc.) integrates with merchant account/payment gateway in-store marketing
    • ShipWizz.com Get up-to-date shipping rates based on location, package weight and dimensions USPS, FedEx, UPS
    • ShopFluff.com
    • POINTERS WHAT TO DO, WHAT TO AVOID
    • FREE! Hooks the buyer and primes the pump Generates referrals Make sure you can “afford” it Simpler product, faster to produce, quicker to market - buy time for other product development Upsell with paid products - tiered approach Top tier is “ideal” customer - the whole enchilada
    • Bargain hunters eBay Craigslist Auctions won’t allow you to sell a “premium” product at a “premium” price
    • Tips Beware of “hidden” costs - COGS, time, marketing, shipping - that can eat at profits. If a product costs too much to make to price competitively, it’s not a good product to sell. If you need raw materials, get a sales tax license and buy wholesale (and bulk). Consider the entire product cycle - if you sell a small product and a large product, you need shipping materials for both. Labels, packaging, etc.
    • Tips, continued Is it cheaper to pay someone else to produce it than to do it yourself? If it is, let them. Don’t price too low simply to be the cheapest - you’re sending a message about quality. Be consistent - do speed metal MP3s and bible study outlines belong in the same storefront? What message do out-of-stocks and sporadic availability send? Target high-value product - unique, exclusive, luxury, not something you can get anywhere.
    • Tips, continued Cover a range of price points - there’s something for everyone. Also a marketing tactic - even if your price points are higher than you can afford, someone will feel like they “saved” if they don’t end up buying the most expensive item. Price for quantity
    • Caveats Competitions suck - don’t work on spec Remember your brand Building it doesn’t mean they’ll come