So you want to sell your own products, eh? Got $xxx,xxx in hand?
- Thread starter mont7071
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I've never done anything in the dating space on the Merchant side, but key differences are going to be that you are probably trading the inventory/shipping costs of a physical product out for server/IT/bandwidth costs to run those types of businesses. You are also competing in a very diff type of environment, where rather than branding your own product line you are basically trying to attract a giant-enough user group to be able to entice new people to join your site. Really hard to differentiate, and you are competing against the 800-lb well-funded gorillas like Match.com, friendFinder, POF, LL etc.
Haven't looked at CPA costs lately, but based on what the big guys like Match.com used to pay for referral signups, plus the fact that as the "new" guy you'd probably have to offer even more per signup to get any traction, I'm guessing your costs are going to be just as bad, or even worse, to be a Dating site Merchant.
My experience is pretty limited but it seems like basic econ 101.
None physical products take one heck of an investment to stand out but scale up far better.
Insane homerun like returns are a heck of a lot easier but getting of the ground takes a far larger commitment.
None physical products take one heck of an investment to stand out but scale up far better.
Insane homerun like returns are a heck of a lot easier but getting of the ground takes a far larger commitment.
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Seems excessive to pay $4 for a supplement product. You can probably get chinese supps for much lower price. Just doing a quick search on Alibaba, I can find shippers who will sell Ephedra (the fatburner) for $3.25 kg. So how you come up with $4 pr. package boggles my mind. I could easily go into any traditional pharmacy in Asia and get cheaper stuff. You could buy, which I have, generic Viagra for cheaper than that. In fact, I seem to remember paying around $2.5 for a 4 pack of Kamagra when could then retail for around $20. Like those margines? In fact, look at Alibaba and there's plenty of generic herbal fatburners down to $1 bottle like this: Extreme Fat Burner products, buy Extreme Fat Burner products from alibaba.com.
And if you did business directly with some sweatshop in China it would be even cheaper.
And if you did business directly with some sweatshop in China it would be even cheaper.
........Another reason as to why retail or product businesses are always fucking stupid... consulting, seo, porn, fucking anything that doesnt require a real tangible product (or something that can be made up in documents); is the ideal business platform imo.
Customs is a beee-atch if you're talking about shipping any substantial quantity in.
$3+ per bottle is about right for private label supplements in quantity from the US. Some will be a little more, some a little less.
When you've got orders to fill and your entire stock is sitting in a customs warehouse on the shore for 12+ weeks, its too late to re-think your Alibaba plan.
I'll jump in here. Getting people to pull out a credit card before seeing what is on offer is a total bitch, so you'll most likely have to go down the "free" model route.
The thing about the free model is momentum. No one wants to be on a dating site where either a) there are only ten people within 100miles of you, or b) no one ever responds. Because of this, you need to focus heavily on bulk volume to any region you wish to target. Unless you are doing the acquisition yourself, affiliates are not going to be cool with you saying "I only want leads in Texas and Chicago".
Bar going very niche, you're looking at a $2mm+ budget to gain any traction. Otherwise you're not going to get the broad coverage you need, and you'll be losing huge money in all the cities with minimal active users.
Niche dating sites seem to have a lot more success when they start off as a social network, and then adapt to encouraging their users to start dating. At least then people don't complain about the initial lack of local interest.
Sure, not saying it's easy, but the OP makes it out like it's some kind of amazing feat to launch a supp. Why would you even use your own money? If you are in a position to consider launching a product, you would probably be able to prove expert skills in online marketing which would be an asset in trying to find passive investors. The marketing aspect is by far the most important.
I know money is tight these days, but if you have a working business plan then it is always possible to find investment. You could always start out small, just run your own campaigns for a set budget and get quantifiable data for the ROI. If you had that, then you could get external funding.
Who in their right mind would drop 100K+ on a product where you don't know the ROI?
Inventory: 100 bottles a day X 30 days worth to get started @ $4 a bottle = $12k in inventory costs
Min Network Pre-pay: $40 ave CPA X 100 leads daily cap X 10 day's worth = $40k just to start, with a first-month total of $120k in cash outflow
Shipping: free trial offers have to ship fast, no customer is going to accept waiting 12 days for product to arrive when the free trial period is 14-30 days, plus you need deliv tracking # to show they got their stuff. Count on an ave cost of $4 X 100 shipments per day X 30 days = $12k per month.
Notice we haven't even gotten to any recurring income for you yet (you'll probably charge a small "S&H" fee of a couple dollars to each customer to get their billing info, but its not going to even cover your product cost), and yet somehow you've already spent $144k in the first month. Add in some merchant card fees (from 3%-14%), some customer service costs (ok, you'll do that yourself or ignore it, cuz you're broke now) and all those tiny random variable costs that pop-up (custom banners, hiring a lawyer to review your LP, getting insurance in case you get sued for poisoning someone, etc) and you are pretty much at $150k in out-of-pocket costs in the first month, even after you got a tiny bit of S&H revenue in from your customers. If you're lucky, some % of your sign-ups will start re-billing after day 20, assuming you've made it that far without going bankrupt or giving up. Then the real fun starts, you get to buy even more product, and start the process all over while praying your rebill rate can keep you afloat before your luck runs out.
In case you think these #'s are exaggerated, you're right, they are. They are actually very low/conservative. Talk to anyone that has launched multiple, medium success offers on Networks, and you'll find that spending a quarter-mill on an offer before they can even analyze whether it was successful yet or not is fairly common.
Good Luck bros
You are also forgetting that 99% of the merchant processors out there are going to hold about half of the money coming in for 60 - 180 days. If you really want to do this and do it right I would say it's more like $x,xxx,xxx...
This is even if you are driving the traffic yourself because remember you are going to have to pay for all of that traffic without the benefit of your
weekly wires coming.
And from a network perspective, yes if you were that new we would definitely make you prepay. Even if you aren't new and are doing continuity, we are keeping you to weekly payments 9.9 out of 10 times, most times with a deposit on the books as well.
I can't count how many people I know that have gotten burned when a merchant loses their processing and their funds get frozen... even with solid traffic and the best intentions from everyone involved.
edit: Just saw mpbiz's post. Beautiful.
If you're bumping your own product from scratch and it's still Day 0, enlisting in an affiliate network seems a bit out of order.
OP is talking about a 100 bottle/day contingency agreement in a scenario where you haven't even sold 1 bottle yet. If you have no sales data to cajole affiliate networks with, then bootstrapping a fixed-rate daily turnover seems out of bounds.
This community might be drinking too much of its own Koolaid when it conflates selling your own product with stringing it through affiliate programs and catching the scraps.
If you're bumping your own product from scratch and it's still Day 0, enlisting in an affiliate network seems a bit out of order.
OP is talking about a 100 bottle/day contingency agreement in a scenario where you haven't even sold 1 bottle yet. If you have no sales data to cajole affiliate networks with, then bootstrapping a fixed-rate daily turnover seems out of bounds.
This community might be drinking too much of its own Koolaid when it conflates selling your own product with stringing it through affiliate programs and catching the scraps.
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