My story so far...

[gravity]

Ok here goes...

I'm a builder with 20+ years experience, around 10 years ago I realised a certain job was easier with something i fashioned out of a scrap piece of metal, soon everyone in the firm was using the same scrap metal.
This got me thinking so in 2012 i got some 3d drawings made up and hit manufacturer's to get it made. By 2013 I had my prototype, The prototype was coming in at £50 per pop! Also I couldn't patent it as there was nothing greatly different about it.
So I lost heart for the idea.

Last year I thought id give it another go, and soon found that someone was already manufacturing a similar item ... and i could buy for £4.20 per item!!
So i purchased 20 and sold them instantly to the builders i knew at £20 a pop!
Their chisel been around a while and is still unknown, so its obviously the marketing and instructions of the product that the manufacturer is failing on,(the instructions on how to use is critical) as no one i know in the building trade has heard of this chisel before, and they sell on only 1 small private e-commerce site (which i used to find the manufacturer).

So, as i cannot patent it and neither can they ,i'm concentrating on a strong brand.

Hundreds of thousands of cold chisels are sold annually in the UK alone, as builders, we use this new chisel 40+ times more than a cold chisel in our jobs, there should be a market for this chisel!!

Items i need help with are:

Should I bother? It'll take £8,000+ to get the first 1000, tooling for blister packing, packaging design etc. Is the financial risk worth it with the manufacturer already trying (but failing) to sell.

Manufacturing:
Should i try get the costs down by sourcing a Chinese manufacturer and packaging company? Will they produce to BS standards?

Pricing:
How to price the product? Should I sell to building suppliers? keystone pricing?
Ideally i'd like to get the chisel to £9.99, so with keystone pricing id have to get the product at around £2 per chisel!!

Sales:
I have no idea where to begin with sales!
I know before I try the big suppliers, i need a sales history so I have scraped the yellow pages and have 5000+ independent building suppliers contact details.
How do i sell? Telesales? Face to face? Where do I begin


Please help me!

 

[fisicx]

Go for it!

Talk to Ron @MY OFFICE IN CHINA - he can help with sourcing, packaging and delivery.

The chisel will probably sell itself. Once builders start telling each other they will get one from the site URL you have stamped on the side of the product.

 

[Darren C]

As you probably already know Professional Builder is a free magazine you can pick up at any local builder's merchants and there's always something new that looks like a good idea but a day later it's been forgotten about.

I don't know how much they charge to advertise and what a typical conversion rate is but I would investigate further as a first step.

If you think you can get enough interest, I would suggest selling it direct yourself from a custom website.

I'm not going to comment on the idea of approaching independent builder's merchants just in case any are reading - but I think you get the gist?

 

[gravity]

I'm not going to comment on the idea of approaching independent builder's merchants just in case any are reading - but I think you get the gist?

Sorry, I don't get the gist ? Can you elaborate please

 

[fisicx]

He means start knocking on doors at the local independents. They do still exist.

Get a small website built - a one page site with a buy it now type thing is all you need. Get listed on ebay as well then start showing it to everyone you know in the trade. These things can take on a life of their own if builders like it.

 

[Root 66 Woodshop]

Manufacturing:
Should i try get the costs down by sourcing a Chinese manufacturer and packaging company? Will they produce to BS standards?

https://shop.bsigroup.com/ProductDetail/?pid=000000000000340432


One of the worst things in the world that I've come across is product that is "tested" to BS Standard... yet have not been tested by the BSI therefore they should not conform to BS standard...

In our industry we come across this so much it's technically a danger to the public, especially where gun cabinets are concerned... I won't mention any brands but there are some on the market that are only "tested to BS7558" by their own testing methods... and not by the methods provided by the BSI.

 

[ADW]

Is it more the building trade that would buy it or is it of enough use to the general DIYer?

Might be worth getting some free ones out to the local training schemes for the building trade etc. Be good to get them onside and will filter upwards. Kind of thing Apple do with schools. Pity there is no patent though.

 

[Chris Ashdown]

Why not meet up with the person who is selling them now and see if they can work with you, you could then buy their product at a non risk cost and sell them yourself . no need to re-invent the wheel, someone is making them so negotiate if possible even if you have to re-brand the ones you sell

Last night on the news was one very large company who sells the same Chicken to all the main supermarkets and the only difference is the packaging

 

[gravity]

Is it more the building trade that would buy it or is it of enough use to the general DIYer?

Yes its of enough use to the DIYer aswell

 

[gravity]

Why not meet up with the person who is selling them now and see if they can work with you, you could then buy their product at a non risk cost and sell them yourself . no need to re-invent the wheel, someone is making them so negotiate if possible even if you have to re-brand the ones you sell

Thats what I did, they are the manufacturer.
They sell them me for £4.20
Im only thinking of china to get the cost price down once ive included packaging and such

 

[gravity]

So should I go with telesales, email marketing or just walk in to the shops?

 

[Root 66 Woodshop]

Something to think about...

By having the right branding a product will sell, a fine example is of a nightlatch.

Everyone who is not in the industry will refer to a nightlatch as a YALE Lock.

It's a nightlatch, Yale is the brand not the product.

 

[Root 66 Woodshop]

Thats what I did, they are the manufacturer.
They sell them me for £4.20
Im only thinking of china to get the cost price down once ive included packaging and such

If you're buying them for £4.20 (including VAT?) and all you need to do is repackage and re-brand, I'd consider looking for the right name and the right branding, and keep purchasing from them... no point in upsetting the applecart is there?

At the end of the day, if a patent cannot be created for the product then you're halfway to market already by having your supplier ready and waiting for your orders... Why not ask them for a price based upon un-branded packaging or bulk orders based upon no packaging at all.

Another product to think about in the same sense would be basically anything you can find from Blue Spot. a copy of majority of products already on the market, manufactured at a cheaper cost doesn't always mean a better product... another such company would be Silverline Tools... a cheaper alternative to higher graded branded products yet they still sell well.

 

[Chris Ashdown]

How much would they reduce cost to you if you brought £200 or£2000 in one go it's normal to get quantity discounts based either on order value or sales value over the year

Presumably if successful, companies like Stanley will come out with similar item, so only a short window of opportunity if not patented

 

[fisicx]

So should I go with telesales, email marketing or just walk in to the shops?

Walk into the shops. And do loads of online marketing.

 

[Root 66 Woodshop]

Aye,

they're getting into everything now...

http://www.stanleytools.com/en-us/products/hand-tools/other-tools/stanley-jr-wood-building-kits

http://www.stanleytools.com/en-us/products/hand-tools/demolition-tools/cold-chisel

 

[ADW]

So should I go with telesales, email marketing or just walk in to the shops?

If the demonstration of how to use it is required then you either need a good video or to get in front of people.

 

[gravity]

How much would they reduce cost to you if you brought £200 or£2000 in one go it's normal to get quantity discounts based either on order value or sales value over the year

At the end of the day, if a patent cannot be created for the product then you're halfway to market already by having your supplier ready and waiting for your orders... Why not ask them for a price based upon un-branded packaging or bulk orders based upon no packaging at all.

That is the price for unbranded & unpackaged and also whether i buy 20 or 2000, I have asked all these questions to the manufacturer. They say £4.20 ... done ! Im wondering if they import them themselves as some of their other tools are imported from china! I think i could get these cheaper as I could buy cold chisels for < 50p from china and my chisel uses the exact same process but less steel!

 

[gravity]

Presumably if successful, companies like Stanley will come out with similar item, so only a short window of opportunity if not patented

Yup and the likes of Ox, Faithful, Silverline etc. I need to hit hard and fast and get out or have the brand to compete (i dont!)... but i dont have the capital.
Could i patent the instructions?

 

[gravity]

If the demonstration of how to use it is required then you either need a good video or to get in front of people.

Front of packaging .. A QR code that loads the URL of video on my site "See it in action"

 

[gravity]

Ok, lets say i go with the chisel as is... Is this how keystone pricing works:

• Cost £4.20
• Sell to Building suppliers £8.40
• They sell at £16.80 + VAT
• Retail price = £20.16

Basically is keystone pricing doubled at each point

 

[fisicx]

I think i could get these cheaper as I could buy cold chisels for < 50p from china and my chisel uses the exact same process but less steel!

SPEAK TO RON! @MY OFFICE IN CHINA

Front of packaging .. A QR code that loads the URL of video on my site "See it in action"

Nope - don't do this. By the time they get to the packaging they will already need to know how it works.

 

[gravity]

Nope - don't do this. By the time they get to the packaging they will already need to know how it works.

The packaging will be hung on the pegboards/ countertop pegboard, the chisel will be in a blisterpack/clamshell, so as soon as the prospective customer looks at the chisel he will also see the QR code and "SEE IT IN ACTION".

 

[fisicx]

Except QR codes are well past their sell by date. Very few people have QR code apps installed on their phones and even if they do they aren't going to scan, wait for the video to load and then stand their watching you whack a chisel with your hammer.

Three to four demo pictures on the packaging will suffice.

 

[gravity]

Except QR codes are well past their sell by date. Very few people have QR code apps installed on their phones and even if they do they aren't going to scan, wait for the video to load and then stand their watching you whack a chisel with your hammer.

Three to four demo pictures on the packaging will suffice.

I was thinking demo pictures would be on the reverse with the instructions, but i think your correct, i have a qr scanner but have never once bothered scanning anything!

 

[fisicx]

Imaging the blister pack with the chisel on the left and the 'use it for: A B and C' images on the right. Underneath: 'see back of pack for instructions'.

But don't try to design the packaging for yourself. It's a specialist skill and need someone who knows what they are doing to get the details right.

 

[gravity]

Imaging the blister pack with the chisel on the left and the 'use it for: A B and C' images on the right. Underneath: 'see back of pack for instructions'.

But don't try to design the packaging for yourself. It's a specialist skill and need someone who knows what they are doing to get the details right.

I wanted to do this but the product would hang off balance then

 

[fisicx]

You can put the hook to one side or you put images both sides of the chisel. In any case, leave this up to the packaging designer. What you need to do is talk to a sourcing agent in China. I've made my recommendation. He's a really good bloke.

 

[gravity]

You can put the hook to one side or you put images both sides of the chisel. In any case, leave this up to the packaging designer. What you need to do is talk to a sourcing agent in China. I've made my recommendation. He's a really good bloke.

How does he price? A one-off payment or a % of order?

 

[fisicx]

Talk to him. He is very accomodating

 

[Chris Ashdown]

What size quantities are you looking at, weight wise I imagine it will have to be shipped not airfreight

 

[Chris Ashdown]

Keystone pricing is something from the past, now days you get what you can, supermarkets make about 5% on average but have massive turnover, and within this price things are at no profit or a tiny profit, items like clothing can be a few hundred % mark-up

Chisels have a varied price based upon the brand value Stanley will get far higher prices than Toolstream even though the manufacture costs can be very nearly equal, we move into the brands perceived value, just look at the price difference between watch brands

 

[gravity]

What size quantities are you looking at, weight wise I imagine it will have to be shipped not airfreight

1000 for my first order, then learn how to sell!

 

[gravity]

One of the worst things in the world that I've come across is product that is "tested" to BS Standard... yet have not been tested by the BSI therefore they should not conform to BS standard...

In our industry we come across this so much it's technically a danger to the public, especially where gun cabinets are concerned... I won't mention any brands but there are some on the market that are only "tested to BS7558" by their own testing methods... and not by the methods provided by the BSI.

So how do I ensure my manufacturer tests to BSI standards?

 

[fisicx]

Talk to Ron. This is the sort of thing he does for a living.

 

[Chris Ashdown]

Why do you want it to be to BSI standards?

How much will you be willing to pay to get a BSI standard certificate, they don't I imagine come cheap

 

[gravity]

Why do you want it to be to BSI standards?

How much will you be willing to pay to get a BSI standard certificate, they don't I imagine come cheap

I was under the assumption it had to be?

 

[gravity]

Talk to Ron. This is the sort of thing he does for a living.

Im going to go with an Indian company i think

 

[fisicx]

Im going to go with an Indian company i think

Why?

A word pf warning about Indian companies, they will promise everything even if they can't deliver. It's a cultural thing. So caveat emptor.

 

[MOIC]

Should I bother? It'll take £8,000+ to get the first 1000, tooling for blister packing, packaging design etc. Is the financial risk worth it with the manufacturer already trying (but failing) to sell.

Yes, of course.

You have stated the reasons why you should bother in your opening post.

Manufacturing:
Should i try get the costs down by sourcing a Chinese manufacturer and packaging company? Will they produce to BS standards?

Yes to both questions.

Pricing:
How to price the product? Should I sell to building suppliers? keystone pricing?
Ideally i'd like to get the chisel to £9.99, so with keystone pricing id have to get the product at around £2 per chisel!!

If you have done the experiment that the chisel can be sold for £20, why do you want to reduce the price to £9.99. You're better to increase the value by including great packaging, a case to protect the chisel, details to your website showing a video of "How to Use" in order to justify the retail price.

Pricing should be calculated by the following (approximate) percentages:

1. Importer Cost (You) = Manufacturer's cost plus ALL your costs to get the first shipment landed to your door, including freight, Import Duty & VAT. (This should include ALL your sample/prototype costs).

Divide the sampling/prototype costs by your first order quantity to get your cost per piece:
Example - £10,000 / 10,000pcs = £1 per pc

Examples (All Approximate):
Manufacturers Cost = £4.00
Freight = £0.30
Import Duty = £0.40
VAT = £0.86
Sampling Cost = £1.00
Your total landed cost = £6.56


2. Importer > Distributor:
Importer Cost + 25% (£8.20)

3. Importer > Wholesaler:
Importer Cost + 40% (£9.18)

4. Importer > Retailer
Importer Cost + 60% (£10.49)

5. Importer > Consumer:
Importer Cost + 330% (£21.71)

I have no idea where to begin with sales!
I know before I try the big suppliers, i need a sales history so I have scraped the yellow pages and have 5000+ independent building suppliers contact details.
How do i sell? Telesales? Face to face? Where do I begin

Brief Summary

1. Find the best manufacturer to work with and form a contract with them.
2. Design your original packaging.
3. Create and register your brand.
4. Include your branding on all packaging as well as the product.
5. Create your website.
6. Research the best national AND international shows/exhibitions/fairs. Exhibit according to your budget.
7. Target retail groups who you feel will appreciate and be able to sell your product and send them a free sample. (Avoid the very large groups (at this stage) that are likely to find their own manufacturers).

Don't run before you can walk. Grow according to your budget and business experience.

Please help me!

Contact me for free advice & assistance.
Details in my signature below.

Good luck.