AMAs January 14, 2021

500 sales. £40k revenue. 90% profit margin. On a PHYSICAL product. Ask me anything.

Charles Burdett @Chxrles
  1. 2

    It's awesome to see success with a physical product on IH! I'm planning to work on one this year as well (a board game accessory).

    How did you come up with the price point of 89GBP? My first reaction was that this is super expensive for a deck of cards, but obviously you've created something of immense value for businesses, so it makes sense.

    In general, this seems like a good strategy to overcome the big deterrent of shipping + manufacturing costs with physical products!

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      I tested the price over the course of 6 months. It includes international tracked shipping which can cost upwards of £30!

      There’s a few reasons.

      1. High price = high quality
      2. Customers who want something cheap, tend to cause more effort and headache.
      3. It’s typically a business purchase, and half the time it’s signed off by someone’s line manager out of their training budget
      4. If people have a problem with your price, it means you’ve not communicated the value clearly enough. Can you put a price on boosting someone’s confidence? Yes - it’s £89!

      It’s a low volume, high price product. It also means I could make something high quality, which makes the whole project worth it.

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        Great advice, seems like in some ways a "premium" physical product of this nature has less risk than higher quantity cheap stuff.

        For including shipping in your price, it makes sense if shipping can go as high as £30. Were you looking at where people were pre-ordering from to get a sense of what your numbers would be beforehand? I imagine if most of your customers started ordering from the US your margin could drop significantly, but a problem for down the road maybe.

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          It averages out. Half my customers are from the UK.

          If it did swing that way a lot, I’ve already factored it in! There’s a lot of room in the margin.

  2. 2

    I was wondering if you absorbed the risk yourself or somehow created (or knew there was) demand before mass-producing?

    1. 3

      I created a smoke-test landing page before even embarking on the idea. Gathered a fair number of emails of people interested. I surveyed them to get a better idea of why they were interested.

      Then send out some free very rough versions of the product in exchange for their research time. Then I ended up creating a pre-order for the beta, where they pay for the beta but get the final thing for free.

      This helped me bootstrap the product, and I actually broke even on cost of goods by the time it came to purchasing the bulk order! So I derisked every step of the way. There was never a moment I wasn't 70% confident it would succeed.

      1. 1

        That's a great path! What was your timeframe for it?

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          Testing physical info products has a pretty long feedback loop. No specific timeframe, just a bias towards shipping and learning and pulling the trigger at each step with 70% confidence. Took 2 years from idea to launch. But now I can make the next deck in 6 months.

  3. 1

    Amazing, well done.
    How do you do the manufacture of a deck of cards?
    Is there something like a print-on-demand service, or did you undertake it yourself somehow?

    1. 2

      I went down the rabbit hole of the board game manufacturing industry. It's a pretty commoditised service these days. There are even some firms who focus purely on helping people prototype stuff for Kickstarter.

      1. 1

        Really great info. BG industry really has helped simplify this process for people who don't specialize in this area. Awesome that you were able to use that to your advantage!

        Would you be willing to share a rough breakdown of your costs between development, manufacturing, and shipping?

        1. 1

          Sure. So this is all approx and this does not include monthly OpEx such as running a store and warehouse fees.

          2000 decks cost roughly £14k, which includes manufacturing (8k), shipping, warehouse receiving, card illustrations, copy editing, more copy editing, custom mail boxes.

          Haven’t included any marketing spend because I have none other than a few hundred quid on Instagram ads with mild success.

          1. 1

            Awesome, thanks for this. 14K is no joke in up-front costs! But your pre-order strategy sounds solid. I have been considering doing that and/or Kickstarter.

            Seems like you're on track to fill the remaining orders, that will be a huge success!

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              I think I’m going to try Kickstarter next, now I have an established audience. I avoided it the first time round just because I didn’t want the pressure (I was still working a full time job) and I didn’t have the audience to give it that initial inertia. We’ll see!

              1. 1

                Nice! That's a good point, I've wondered about initial audience size for Kickstarter too. We have a digital board game that we may be able to sell to so maybe it could work.

                Definitely would be interested in a KS write-up if you go that root though!

      2. 1

        Any insight on how to validate them? Are they local or far-east?

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          Check out Ad Magic, they're pretty reputable and they operate out of the US. Honestly, even though they're pricier, the communication with Western folk is a weight off my mind. I went down the Alibaba/contacting Chinese factories directly but the needy vibe and language barrier makes it very difficult to build confidence and trust.

          1. 1

            Ad Magic looks great, thanks for the tip!

          2. 1

            Completely relate with that. However, once you get hold of a good manufacturer in China, it can be a bless. I do a lot of mechanical prototyping (CNC, and 5-axis CNC), and while local suppliers take weeks just to send a quote, we get the parts from our supplier in 10 days. It took us more than 2 years to find it and build the relationship, though.

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              Those relationships are priceless.

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