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.

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Selling Products as a Service-Based Business

  1. 1. Selling Products as a Service-Based Business Julie Johnston, 327 Creative
  2. 2. 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.
  3. 3. The Alternative: A mix of service and product offerings
  4. 4. OPTION #1 CONVERT EXISTING SERVICES TO PRODUCTS
  5. 5. 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.
  6. 6. 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
  7. 7. 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
  8. 8. 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)
  9. 9. 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
  10. 10. 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
  11. 11. Inkd.com For print designers Connected with customer to modify design Specs provided so templates are consistent
  12. 12. CampaignMonitor.com White-label admin You can offer templates, or let customer go to town CM handles billing, you decide mark-up
  13. 13. OPTION #2 NEW PRODUCTS - BUSINESS OR PLEASURE
  14. 14. 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”
  15. 15. What are “Info Products”? eBooks online training and education videos recordings electronic templates software fonts icons
  16. 16. 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.
  17. 17. 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.
  18. 18. Lulu.com Publish both digital and print versions on demand Can also publish digital media (CDs, DVDs) SEE ALSO: Blurb.com
  19. 19. E-junkie.com Integrate lightweight cart into existing sites Flat monthly fee (no bandwidth limit)
  20. 20. 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
  21. 21. Etsy.com Handmade, vintage, supplies Insertion fees similar to eBay Innovative navigation and active community SEE ALSO: 100markets.com supermarkethq.com
  22. 22. CafePress.com Insane number of products You set mark-up SEE ALSO: Zazzle.com Spreadshirt.com Printfection.com
  23. 23. OPTION #3 SELL JUST ABOUT ANYTHING
  24. 24. The drawbacks Inventory HIghest up-front costs Labor and maintenance Possible equipment and development needs
  25. 25. The advantages Established brands, often with their own marketing Decent profit margins Less pressure to be creative Can help sales of your own products
  26. 26. BigCartel.com Your products, their backend Free to $19.99 a month Limited # of products SEE ALSO: Shopify.com
  27. 27. Mpix.com Photos and high- quality image printing White-label drop ship Wholesale pricing SEE ALSO: whcc.com bayphoto.com
  28. 28. PinballPublishing.com Allows ganging of designs PMS and CMYK soy inks SEE ALSO: uprinting.com jakprints.com
  29. 29. 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
  30. 30. 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
  31. 31. ShipWizz.com Get up-to-date shipping rates based on location, package weight and dimensions USPS, FedEx, UPS
  32. 32. ShopFluff.com
  33. 33. POINTERS WHAT TO DO, WHAT TO AVOID
  34. 34. 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
  35. 35. Bargain hunters eBay Craigslist Auctions won’t allow you to sell a “premium” product at a “premium” price
  36. 36. 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.
  37. 37. 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.
  38. 38. 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
  39. 39. Caveats Competitions suck - don’t work on spec Remember your brand Building it doesn’t mean they’ll come

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