Hurry up to wait again December 18 2013
I came home from the ABC Kids Expo in September 2011 ready to proceed with manufacturing, and with a mountain of contacts to follow up with (I must have killed at least one large tree in my effort to stay organized with this). I also came home with some valuable new knowledge, specifically about keystone pricing. For those of you who are not familiar with this, it's really quite simple: everyone needs to double their money. So if a product costs you $5 to make, you should wholesale it for $10 and retail it for $20. I went to the show thinking that The Quick Split would retail for $10. I quickly learned that my cost would need to be $2.50 in order to achieve this price, and I was nowhere near that. So I came home and immediately changed the retail price to $15 and the wholesale price to $7.50. My cost of goods would fall anywhere between $3.50 - $5.50 depending on how many I ordered.
The show ended on September 26th, and on September 27th I emailed every single person who gave me a business card at the show. I had the strike while the iron's hot mentality, wanting to hurry up and contact everyone I had met while my product was still fresh in their minds. I planned to place my first order with my manufacturers in mid October, so I had a few weeks to secure orders and firm up what quantity I needed.
Some buyers placed small orders. A few buyers said they needed to buy from me at $5 and wanted to sell it for $10 instead of $15. One company told me my price would never be low enough for them unless I manufactured in China. A few large companies said they were interested and would like to have manufactured product samples in order to further review the product and make a decision.
It all boiled down to this: I would never be able to provide product samples to those large companies if I did not manufacture. But I did not have enough firm orders to go with a large quantity and get a better price per unit. So I made the decision to only order 500 units. This would get the ball rolling, and I could begin to sell and send samples out. My margins would not be as good as I had hoped for, but I didn't want to take the risk of ordering thousands of units that I may or may not be able to sell.
In November of 2011, I emailed purchase orders to my steel, plastic and packaging vendors. Because it was my first order, the anticipated lead-time for tooling + manufacturing was 14-16 weeks. And so I was presented yet again with another opportunity to practice the art of patience.