We are a custom residential cabinet shop. But, over the years, I've toyed with the idea of creating a furniture line or product that we could repeat fairly quickly in and around our cabinet jobs as a "fill-in" and a way to keep the cnc a little busier. Having never done this, how do you introduce a new product? Just fling it out there on the web? Or, is there a better strategy for things like this? Also, for those of you that do both cabinets and furniture lines, are there any negative issues that has created for your shop? All words of wisdom are greatly appreciated!
We do both and are always looking for small products/product lines for the reasons you mention. I have personally taken a different tact on many things and no longer go the old route of making a bunch of product and then going out and trying to peddle it. That may work for certain items but I have tired of coming up with an idea, running inventory, only to find out that it will be changed, or the item isnt what it was thought, and so on. I todays world where 80% of the Ikea catalog has never even been manufactured, you can do very high quality digital renderings and print material without even making the first part. We use these to go out and test the market with and get a feel far before we start wasting time in the shop. Office time is far cheaper than shop/machine/material time and with the whole world on email, text, and so on, you can get a lot of information out without having a single piece of inventory on the floor.
All items are different and you dont mention if you would be selling direct to retail, wholesale, both. Each of those have their own issues. Setting up a web-store for either wholesale or retail, or peddling your items to brick and mortar, and so on.
Ecommerce is easier now than ever however it is an extremely diluted marketplace and with all the social media outlets now it seems its a matter of seconds before you will be knocked off if its a novel idea. Not being negative but just something to be aware of. In my experience your product needs to of course be something people want, but also has to be something with some facet of its manufacturing that allows you to make it cheaper than most any one else will bother with (CNC has the advantage here).
Todays market place (depending on the product) seems to be this in-your-face all the time, social medial campaigns, and the like. A lot of work and not something I enjoy. Of course a nifty item that pretty much sells itself would be great. We have not found anything like that.
I think you are searching for a mythical product. Like looking for that perfect business partner with lots of money and a brilliant head for business, the Holy Grail, and Noah's Arc. It's just not out there! Ever watch the Shark Tank on TV? The world is full of people trying to seek their fortune with a magic product. But most of them drive themselves to bankruptcy trying to develop and market it. If you have slack machine time, I suggest you approach other shops and work out a situation to machine their parts and benefit both businesses. Very little time wasted on marketing development with that.
Thanks for the ideas so far! I definitely am not looking for that "mythical" product - just looking to bring in some extra since we have capacity and machinery. I was always taught if it's too good to be true, it's too good to be true - so, no expectations of retiring on it and certainly not interested in pursuing any patents. But, growth is growth even if it only accounts for a few extra percentage points. I also do not want to carry inventory - just build on demand. Have any of you had problems with side work like this causing unexpected disruptions or distractions in your shop?
Rich has chimed in on this subject before and the notion that cutting for other shops works everywhere is unfortunately extremely ill informed. There are locations where you are picking up nearly all the work you can from adjacent shops (and the term nearly means you may be missing a couple hundred dollars here and there that will be more work than the worth).. but none the less when you have the capacity your always going to be entertaining options. To not do so would be idiotic. To chase work that is not profitably would be equally idiotic but rich's default seems to be an established "standard" based on areas where there are 42 shops without CNC's in a serviceable range of your four leaf clover shop with a CNC that will flood your shop with hundred dollar bills, bring the material to your doorstep, pick it back up at your doorstep, and for over copious quantities of cash allowing you to simply sit in your shop and do nothing but plan the purchase of your sixty five foot sailing yacht that your going to escape on while your staff fills the orders.
As we now have the inevitable need to pivot back into the real world where we are doing all of the rich disciplines, feeding our own work, cutting for other shops, courting all the remaining shops for their dribs and drabs that will also waste more of our time in phone calls, email blasts, printed literature, drawings, changes, on an as needed basis, (but are doing our due dilligence) and of course still always keeping our eyes open to a line of "whatever" that would provide some fill-in work (that may grow into much more than fill-in)...
The biggest detractor for us has been when you cultivate a good account but then have to feed it in the slow times. You've got to take the good with the bad. We have a customer with a product line that will bury us certain times of the year we make money. In those times its great. Several thousand dollars of orders a week, easy work, great to deal with. But then their slow months their orders are a nuisance. They are a customer that we cant hold inventory for in the good times to fill in for the slow. Things are always changing. So its not like we can run extra inventory in the summer for when they order 160 units in xyz month. We quantity price them but there is no way to quantity price the slow times to be as profitable as the boom times. So you wind up with a small amount of lost leader on slow months, and a boom on the good months to average out to a decent account over the course of a year.
The same thing happens with our direct products. Some months your running them full bore and the margins are great. But you still have to fill the orders in the months when you have demand for less than a profitable run.
I avoid carrying inventory at all costs. When an item, a customer, a product, goes south, I hope to have as little material in the fire (dumpster) as possible.
I value every ounce of information I can find with regards to the process. Even Rich's luddite, consummately negative, outlook on everything. I would love nothing more than to be in a location with 62 other shops that dont have the sense to invest in a CNC and feed me all the work I can stand..... Its not reality. And it a rural area its really not reality. So strive for a balance.
The uber negative voices have weight. The middle of the roads have weight. And then yo have Tony Robbins.
Does social media work with things like this? I have tried social media in the past (and have to admit I'm stumped with it and frustrated at the amount of time it consumes) with our regular cabinet work and didn't seem to have any success. It was a difficult thing to qualify. At best, we look more "alive" as a viable shop in this age of technology but that's about it. Everybody says to do it but I'm thinking it's because everybody is doing it and they wouldn't know what to do if they weren't doing it. I just (as one aspect of marketing) want to know if any of you have had success with this and, if you have, how did you get there? Maybe I need a better plan here. Or, maybe it's just not what it's cracked up to be.
The hard part about the entire thing is a tremendous amount depends on your product which no one knows but you (and may well be better kept that way).
Are you going to be direct marketing to consumers (retail to the public) are you going to be looking for wholesalers? Both? All those things factor in. I agree that the current retail market climate is going to demand a level of social media marketing that will be nauseatingly difficult to maintain in-house if you are talking about a product that you must sell direct to consumers to be profitable (in which case you will likely be soon investigating overseas production for profitability i.e. sharktank). In that world I would hope to have an individual in the office that is social media obsessed and you could tap to ride that horse. We did this a bit last year with a full time individual and my only advice would be while Im not saying you micro manage your campaign, you ask the individual to qualify everything with you first before they "post" so you can be sure your message is being delivered in a framework your OK with. On the flip side of that, just as stated in a recent CAD post, the simple fact is that consumers operate far differently today than anything I have been around in the last 35 years. Stuff, pitches, posts, ad's, photos, that I simply cant make sense of are selling millions of dollars of product. The answer to that is that I am a luddite and may be far better represented by someone who is "in the mix". That of course has to be blended with what I am comfortable with with regards to my business but if I try to force my marketing strategy into the framework of 30 year old mentality (or older) Im likely cutting my nose off to spite my face.
I see this daily with young employees and while I hope to "enlighten" them on the virtues of my 30 year old knowledge base, their daily consumer purchases are making millionaires while Im still shuffling sawdust. It would be wise to put down my 30 year old knowledge base and take in some of their modern tech foolishness (in my mind) and try to rob them of some of their cash to add to my retirement.
If your item is one that can take advantage of domestic production, marketing to wholesalers profitably, then you may be able to leave the social media up to them.
I completely understand the notion to not take away from your shops capacity and just focus on growing your daily production. Thats what we all do every day regardless of assumptions. But its completely understandable that there are times of the year when there is space in the schedule for other production, or even a need to fill that space, that isnt coming from elsewhere.
As mentioned, there have been several recent posts in this vein where the default response is to simply court other shops work, dont venture outside the "zone", and so on. Well, in our area, there are no other shops other than those we are producing for. Perhaps one or two that may need something a time or two a year. Not enough to allow any relaxation.
Things are moving exponentially faster now as it seems to me. And holding on to age old practices is never unwise but maybe now more than ever is a pretty good recipe for being left in the dust.
Toss out a few more details without exposing your actual product and see if you get more specific input. I think its a pretty pertinent topic in todays market. Shops, just like economies, will probably have to look more and more to diversification to maintain revenue in the coming years. Being on your toes is never a bad thing.
And to Rich, look, we all get old and grumpy. Im only 52 but could hit the widowmaker any second in the shop. I am loaded down with far more cynicism and negativity about this business than any of my employees could possibly ever bear for the burden (which further exacerbates the widowmaker). But I try to look at every single option with a contemporary clear eye. We have an odd job running in the shop right now that doesnt involve a single stick of wood, or a single sheet of ply. It will carry the shop for a couple weeks without consideration of the other work in progress. We court, covet, and entertain, any revenue we can. As Ive said, I would love nothing more than to be sitting in a location that would feed our shop through and through. We just delivered a 15K segmented dining table to a house filled with homecenter/wayfair horrendous vanities, kitchen cabs, and closet units. You can darn well bet a very nice thank you went out with the final invoice that outlined capacity for those dog poop cabs, more than likely they were bought for half our material costs, but we still try.
If it is a “me to” product it might keep you busy but you won’t make any money at it. The people already producing that are good at it and selling on a razor thin margins.
Th money is in things that have a higher perceived value that you can produce fast and easy that isn’t available on the shelf.
As for the cutting for other shops I’ve done some of that and to me it was more Bastos than it was worth
1-knock on retail store doors and put it on consignment and see there interested.
2-Sell online, you will need a steep marketing budget.
3-Go the wholesale route and show at regional or national wholesale markets like http://www.highpointmarket.org/
or https://www.americasmart.com/ https://www.lasvegasmarket.com/ expose your product to thousands of retailers and see if it is a viable product line if it is, pick-up some manufacturers sales reps for a 10% commission.
Business is all about pivoting, so I would try it. A stupid college credit is $800 - $1800 so a 3 credit class would cost $2400 to $5,400. Test your concept out and think of it as an education, even if it doesn't work out I'm sure you will learn a lot.
As someone who used to buy this product, and now makes it(small furniture and home decor), I will give you my thoughts.
Making it is the easy part. Most of us can make anything. selling it is by far the hardest part of what I do. The only thing that has worked for me is knocking on doors. And this is EXTREMELY time consuming. Most owners of stores dont have much extra time, so squeezing in meetings for you is hard. And they are not buying on the first meeting. Might not in second, third or fourth. One of my best dealers I went there 6 times before I talked to the right person that just happened to have a moment for me. This store is an hour drive one way.
Ultimatly, I hired salespeople to do the job. I have never heard of any manufacturer paying 10% commision. 5% of all sales is very common and is what I pay. A little more on big orders of home decor(pretty rare).
I have looked into markets. When its all said and done, $10,000 per marktet gets you a temporary 10x10 booth(Atlanta gift market) The gift market, they would buy the first meeting. The furniture market, they would not.
Margins are razor thin in furniture. I believe you would be shocked quite frankly. I have a solid oak end table that retails for under $200. And sometimes I can't get it placed. My biggest compition on this item is about the same price.
Designs in furniture dont lasts long. Most companies have a couple of things that are there bread and butter. The rest comes and goes with the wind. I have to constantly develop new products year around.
You said you dont want to inventory anything? That is not really going to work. You will have to inventory something. wood, parts, or product. I would never be able to make my best sellers for the price I do if I didnt make a ton of parts at one time. Its just takes to long changing over. I also stock over 10 different types of wood in 5 thicknesses. This is not your 4/4 stock for cabinets.
The other problem is you will be busy when the furniture stores want your product. Its never gonna line up right.
I dont make cabinets, but my home decor line is vastly different that furniture in production. they are constantly fighting each other.
I dont know if you have any employees, but I believe this would take a full time person to develop the line. Probably wouldnt be profitable for at least a year.
Honestly, if you are just looking for more work have you looked into expanding your territory? Doesnt cost much to drive a little. IMO, this would be much easier than developing a line of furniture that will fit with and around your cabinets.
I think you would be better off finding more work that fits you main production. If that is kitchens, expand your market area. Create a product that you can sell along with the kitchens. Selling to other shops. Most likely they will use you as overflow, probably needing stuff at the same time you are busy. Selling on the internet might work but you have to be able to deliver in a short time even when you are swamped with your main line. I have lots of experience shipping, not all of it good! Packaging is expensive & time consuming. Wholesaling, been there. You will need someone to sell it. They will want their commission on everything you make, regardless whether they had anything to do with the sale or not. Don't do consignment without fully understanding what the legal issues are. Does you product liability insurance cover your new product? Lots of other things to consider. Good luck.
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