backorder issue
Hello all!
I've been digging through this forum for the last few weeks. Tons of stuff to learn! Takes a good chunk of time to just pick up the IM lingo!
So here is my situation:
My business partner and I have our own physical product. We have just enough money to cover startup expenses and manufacture 1000 units. Our gross margin is approximately 82% making our breakeven point close to 180 units. Now this is projected information so I'm sure we're in for some surprises here.
The problem occurs in the manufacturing turn-around time. It may take up to 4 weeks from the time an order is placed (from us to the manufacturer) to have the product in hand and ready to ship to our customers. As I said we only have the funding to support an initial order of 1000 units. Right around the breakeven point, we will be in a position to make an additional order.
Now, I'm trying to piece together a good IM strategy so that we don't run into any problems with backordering should things pick up a little too quickly. We wouldn't want to damage our company's reputation by not being able to fill our orders in a timely manner. So I suppose my goal here is to not over sell this initially. I know it sounds a little off when I say I don't want to sell too much product =).
Once we hit our breakeven point and have reinvested in an additional shipment, provided we have orders on the books, we will then qualify for a series of small bank loans to smooth over any issues with the manufacturing turn-around time.
So we sell the first 200 units or so, and have made a new order to the manufacturer. Worst case scenario, this allows us to only sell 800 units over the course of the next 4 weeks. After the four weeks, we're home free.
Essentially, I'm looking to move the first 1000 units uniformly over a 5 week period. I know this is probably an impossible request. Of course, our product may bomb completely and this won't be an issue! Hopefully not though!
My plan so far (based on my limited knowledge) was to go for SEO through writing 5-10 articles per day and posting an equal amount in forums. Now PPC doesn't seem to get much appreciation in this forum so I don't think I will mess around with it straight away. My question is should we leave CPA alone until we hit our initial breakeven point?
Just an FYI, we plan to have an opt-in email list on the website in addition to an embedded blog.
Any insight is well appreciated! Let me know if we have the right idea or if we're completely off... Thanks mates!
I've been digging through this forum for the last few weeks. Tons of stuff to learn! Takes a good chunk of time to just pick up the IM lingo!
So here is my situation:
My business partner and I have our own physical product. We have just enough money to cover startup expenses and manufacture 1000 units. Our gross margin is approximately 82% making our breakeven point close to 180 units. Now this is projected information so I'm sure we're in for some surprises here.
The problem occurs in the manufacturing turn-around time. It may take up to 4 weeks from the time an order is placed (from us to the manufacturer) to have the product in hand and ready to ship to our customers. As I said we only have the funding to support an initial order of 1000 units. Right around the breakeven point, we will be in a position to make an additional order.
Now, I'm trying to piece together a good IM strategy so that we don't run into any problems with backordering should things pick up a little too quickly. We wouldn't want to damage our company's reputation by not being able to fill our orders in a timely manner. So I suppose my goal here is to not over sell this initially. I know it sounds a little off when I say I don't want to sell too much product =).
Once we hit our breakeven point and have reinvested in an additional shipment, provided we have orders on the books, we will then qualify for a series of small bank loans to smooth over any issues with the manufacturing turn-around time.
So we sell the first 200 units or so, and have made a new order to the manufacturer. Worst case scenario, this allows us to only sell 800 units over the course of the next 4 weeks. After the four weeks, we're home free.
Essentially, I'm looking to move the first 1000 units uniformly over a 5 week period. I know this is probably an impossible request. Of course, our product may bomb completely and this won't be an issue! Hopefully not though!
My plan so far (based on my limited knowledge) was to go for SEO through writing 5-10 articles per day and posting an equal amount in forums. Now PPC doesn't seem to get much appreciation in this forum so I don't think I will mess around with it straight away. My question is should we leave CPA alone until we hit our initial breakeven point?
Just an FYI, we plan to have an opt-in email list on the website in addition to an embedded blog.
Any insight is well appreciated! Let me know if we have the right idea or if we're completely off... Thanks mates!
-
debra -
Thanks
{{ DiscussionBoard.errors[819591].message }} -
-
Mike Hill -
Thanks
{{ DiscussionBoard.errors[819768].message }} -