Page 46 - The Bootstrapper Bible

ChangeThis Actually, he was doomed that first day in the bathroom. The cost of sale is enormous. Getting the first person to buy the first sharpener is unbeliev- ably expensive. Itʼs a retail item, sold in a high-volume location (the drugstore). People donʼt know it exists and theyʼre not sure they want it. So you have to pay a bunch of money to let people know they need one, and then you have to share a lot of the profit with the retailer. Consumer products are almost impossible to bootstrap. Especially consumer products that need to be sold in thousands of drugstores in order to be profitable. Take a look at your local CVS—the number of bootstrapped products there is small indeed. It gets worse. In order to sell a product like this, itʼs got to be in stock when the customer gets to the store. So youʼll need to make far more than you expect to sell in the next month or so, just to fill store shelves. But of course, retailers are not going to pay you in advance just to fill their shelves. The biggest insult to the bootstrapper ethic is the fact that every customer needs only one for the rest of his life. Thatʼs right, after going to all the trouble of selling this item, our razor entrepreneur will never ever sell a replacement. The cost of sale is not leveraged across many sales. Hey, he wonʼt even get the benefit of word of mouth—would you tell a friend about an invention like this? Unfortunately, the belief that the successful entrepreneur must have in himself is a double- edged sword. Belief in a dumb business model can force you down a road that will eat away your time and your money. All the trappings of a successful business—business plan, market- ing plan, finance plan, PR agency, patent lawyer, and articles of incorporation—can hide the real flaws behind a business. | iss. 6.01 | i | U | X | + | Receive fresh manifestos twice a month. GET our free newsletter. h 46/103 f