Tim's only partly right on selecting a product

[microtek1]

I have read the book with great interest and find a tremendous amount of great value. I come at this from 30 years marketing and selling products to the major retailers here in the US. In fact, close to $100 million in sales. Name a retailer, I've probably sold them. That said, Tim's plan of finding tons of items to manufacture and sell for 5x cost (in retail a 80% gross margin) is somewhat unrealistic, EXCEPT in limited cases. I would call it the Air, Water, and Earth
trinity. Air, is information, something that carries no value greater than what the purchaser will pay for. Water. The business of selling water based products colognes, cleaners, household chemicals, soda, etc... all have huge margins. With Coke, the cup costs more than the product at the dispenser. The third, earth, are products derived from natural elements. Herbs, sea water, yak placenta, whatever. This would be the category for the Tim's product, hair products, facial stuff, fat cream, you name it. All the rest of the 90% of the things you find at the store, usually have about a Gross margin of between 20% and 66% for the company. Also, you aren't making it, there is someone else making a margin on it. It does assume you sell it online too to make the retail sale. Also, most of the results are perceived rather than real. Makes you smarter, sexier, richer, better looking, fitter, thinner. This isn't true for socks, for the most part, or a vacuum cleaner, cookies, clothing, etc...

Selling to Walmart? You will never get near rich, they won't let you. Sam Walton used to tell his buyers to twist down the screws if a company principal came in with an Italian suit or shoes. So, most retailers work to keep you poor, so avoid most of them, but the small ones. Hope this helps, and good hunting!

[DaveinHackensack]

Intuitively, Tim's comments on the economics of this made sense, and that's one reason I'm in the process of developing a couple of websites that will sell information-based services. One area where I've deviated from Tim's book (an expensive deviation, so far) is in not micro-testing my information service ideas. My fear was that someone else might launch a site based on my ideas before I did if I were to test these ideas.

[kamakiri]

30 Years in sales... GREAT! Why don't you stick with it.

BTW, when was the last time you priced out bib 1953?

[Sven]

Having an angry spell Kam? You know, you don't have to react to posts... Just pfffft and let it go.

[kamakiri]

I actually erased about 15 posts in the past 2 days, I just couldn't pass that one up.

[Sven]

But what's your problem? There is some good info in that post!

[kamakiri]

There we do disagree Sven. The whole post glosses over facts and emphasizes minuscule points. The whole idea of selling products to a major retailer is, in practice, completely anti 4HWW. As Tim said in the book, "There are a million and one ways to make a million dollars...Fortunately, most of them are unsuited to our purpose."

The Air, Water, Earth analogy was some what anecdotal and entertaining to read, but is groundless, and not backed up by facts.

Tim is just not talking about stuff you would find in a store. 90%, 10% or otherwise. I am a huge fan of Wallmart. I am a huge fan of Macdonald's. I have many books on both in my library, and one thing I can assure you of is that both companies produced millionaires in quantities far above the national averages. What kind of a baseless strategy would it be to keep people poor, especially your suppliers? Both companies have a strong history of the exact opposite.

He mentions that clothes are among the items that do not make, "you smarter, sexier, richer, better looking, fitter, thinner." I can only say, huh? Socks as well? We must be looking at different socks. Or vacuums? Have you shopped for them lately? The Dyson DC15 Animal Cyclone Vacuum is on my wish list.

This post is very applicable to the Nixon administration. It has nothing to do with 2009.