Sales model - wholesale

The sales model using re-sellers that you sell to at a discount to the retail price has advantages and disadvantages.

Wholesale Advantages

• You tap into an existing customer base and you will get more turnover
• Your product will move much quicker and get wider exposure
• You can build your business much quicker
• Much more regular income
• You can bundle your product with others to get higher profits

Wholesale Disadvantages

• You will probably need to put in more hours weekly to service the re-sellers
  
• Re-sellers can be demanding and can also stop promoting your product if they decide they need more profit
• Your profit will be less per item
• You can be at the mercy of the wholesaler who will try and screw down their buy price
• Your products will be listed with hundreds or thousands of others
• You may be required to have a 30-60 day account before you are paid
• All responsibilty will be with you and the re-seller will pass all problems to you
• You will need to hold more stock and sometimes be required to pay for promotion
• You will also be discouraged from selling direct to public via your own website

Sales model - Direct

My main sales model is very simple and it is the same one I have been using for the last 8 years. I build the product then sell direct to the customer bypassing the traditional re-sellers by using my network of inter-connected websites that are all on page 1 of Google.

My sales model includes;

• product development (build and improve)
• product branding (naming, designing, logo)
• product pricing (setting price after competitor analysis)
• product marketing (photography, image creation, website managment)
• product delivery (SEO, shopping cart, 1 300 number, email, website network)
• customer service (email and telephone response, providing all advice)
• customer support (technical advice, product support, warranty, refunds, returns)

Advantages

• Work when you want
• Always get paid in advance before shipping anything
• Complete control over your business
• Decide who you sell to and who you won't
• Usually once the product leaves your shed, that's the end of it (If it works and it does what you say it does then you will have a happy customer)
• Take time off when you want
• Not having to fix re-sellers mistakes (they can advise the wrong information just to make a sale and then cause all sorts of headaches)
• Work the hours you need to
• Have a business that gives you a lifestyle

This model gives me a good profit and a relaxed 10 hour per week lifestyle. If you want to make more money and are not tied in to the concept of working low hours then the wholesale model may produce a larger turnover and greater profit until someone comes up with the same or similar product to yours and offers the re-sellers a better deal.

I do have a handful of re-sellers that sell my products regularly and if I chased them or had monthly newsletters with specials and the like I would certainly make more sales and more money.

But then I would have to work more than the few hours a week that I do.