I’ve always been a little entrepreneurial, with side projects always on the go and a dream of doing my own thing. But for years that was all online stuff – software products, web based games, stuff like that. Then one day it occurred to me that it might be going about it the wrong way. Perhaps the time had finally come where a guy with the right attitude and a bit of luck could take advantage of the easy access to thousands of suppliers to come up with a physical thing to sell.
Making money online is hard
For years I’d been making web based games and tools. Partly for my own enjoyment, partly because I thought I could make some money from them. The problem is, there are thousands of other people doing the same thing and lots of them are going to be far better at it. Even if I had come up with a great idea for a game and had released it, the rise of 79p games on the App Store and ad-funded web products has resulted in a market that is unwilling to pay a sensible rate. You can’t live off 79p one-off payments unless you are getting millions of them, and there are huge businesses competing for that market. The chance of an individual getting lucky and hitting the App Store jackpot is so tiny that it’s not a plan at all. You may as well just enter the lottery.
So what about advertising? If you have millions of page views then you can probably make some money from ads on your site, but again you have a few problems. First, getting millions of page views and keeping them for years is hard. You could probably make a short term successful web based game, for example, but to make a living that has to remain successful for a decade or more, or you have to keep churning out hits. Second, people are getting more and more attached to their ad-blockers and so your revenue won’t be what you deserve. Finally, the App Store/Google Play are starting to destroy web based apps, and we’ve already said that app pricing is a joke so even if you manage to migrate your web based service to an app, the chance of making money from it is tiny.
OK, so how about blogging? Maybe, if you have a particular skill or some knowledge that would be valuable to people, you could make money blogging. People do. Probably not from ads alone, but from a range of services you can provide alongside your content. Paid courses and eBooks are especially popular, but there are other options. The problem here is that you need to give people a reason to pay you over all the other people out there doing the same thing. Everyone is a blogger (source: see this site), so you need a niche or some expertise that you can exploit. If you are especially good at something you’re probably already doing it, and if you’re not then nobody will listen. I make no money at all from this blog, it’s just my way of sharing my experiences. If it results in people hearing about my products (buy a watch!) then great, but I don’t rely on it to pay my bills and as a result I can say what I want. If I needed to live off my blog I’d be doing things very differently (and probably living on the street).
Easy access to skilled manufacturers
In the last few years it’s become vastly easier to find and hire skilled suppliers around the world. Alibaba can connect you with watch makers in Hong Kong, leather workers in India, sex toy factories in China or clothing suppliers in Malaysia. If something can be made, you can find a supplier somewhere that will make it for you at a great price. This opens up a world of possibilities that simply didn’t exist to regular people a decade ago.
I’d had enough of plugging away at web stuff that in my heart I knew were never going to be good enough to live off, so in late 2015 I decided to have a go at making something real and selling it. I picked watches as I had a passion for them, but I could just as easily picked any one of hundreds of other items and followed the same route to success. The advantage of selling a physical thing rather than access to a virtual thing is that people are still programmed to accept that handing over money and receiving a thing in return is normal, so your business model doesn’t have to be anything new and clever. With a clear business model and a product being made elsewhere by people with the relevant skills, you can focus on marketing your stuff rather than trying to split your time between marketing, production, and sales work.
Selling physical products online
To make things even easier, many countries now have access to Kickstarter or equivalent. This means that on top of not having to make the product yourself, you don’t even have to buy stock in advance of selling them. A pre-order campaign via Kickstarter or any other crowd funding platform will give you the cash you need to place an order, and also give you a good idea about how your product fits in to the market. Get no orders? It’s a shame, but you’ve not had to pre-order the stock so you can walk away without bankrupting yourself.
Advantages of a physical product over a web based one
- A physical thing has a fixed price. If a unit of your product costs you £10 and you can sell it for £20, you’re making a profit
- You can work with experts from around the world at incredible prices via Alibaba or equivalent
- Customers expect to pay for physical things. Nobody is ad-supporting watches (yet…)
- Other than warranty issues, there is no ongoing cost. Once you’ve delivered a product to a customer you’re done
- You can crowd fund orders, minimising risk to yourself
Give it some thought! You’ll probably find that there is a product or industry you’re passionate about that you could easily get in to. I’d love to hear what you’re working on, so do drop me an email to [email protected]