You're making products and have an eCommerce website. You may even have some customers. All is going great, right? Not so fast. The more you make, the tougher it can be to squeeze out a sustainable profit.
Note the key word there is sustainable. Sure, it's great to have a Kickstarter or Indiegogo campaign get your business off the ground, but that's only going to take you so far. Sustained profits go to those who figure out how to serve a well-defined customer base with repeatable products over long periods of time. Here are five ideas for gearing up your maker business for long-term success:
1. Make a premium version of your product
Every product you make could be better. But instead of iterating every chance you get, try introducing a premium version. If you have a pottery studio, consider mixing in one or two new features to a pottery machine, or adding color or an enhanced design to a piece of art — it can allow you to raise prices by 15% or more in some cases. Higher prices equals higher profits. The key is to understand your market. Some buyers will just be getting started with art, while others who are far more serious are more likely to buy a premium version.
2. Offer a soft but meaningful add-on
If you've ever bought a car you know what it's like to be hard-sold on the "extended warranty." There's a good reason for this: the cost to the dealer to sell the warranty is effectively zero and the odds of you cashing in later are low. Extended warranties are pure profit in a lot of cases, which is why you should try to replicate one for your product. Maybe it's a guaranteed fix for your homemade machine within the first 12 months of use or special access to experts. Whatever the add-on, focus on making it feel special enough and you'll likely see your revenue increase.
3. Create a subscription service
Who says you have to sell just one product to one customer? A pottery maker like you could start a subscription service whereby your latest piece is available first come, first served to "subscribers" who pay for early access. Previews and exclusivity can be powerful drivers for your most engaged customers, and a healthy source of profit for you.
4. Develop limited-run products
Scarcity can be a selling point. Use it to your advantage by building a spin-off of your main product that's available only to certain customers — your subscribers, perhaps — or for a limited time. That way, you can charge a premium and still make your customers feel special. A good example for your pottery business: custom-made pieces designed with hard-to-find materials.
5. Raise prices slowly with new customers
Your maker business will evolve over time, and your pricing strategy should evolve with it. That doesn't mean you should gouge. Loyal customers and subscribers should get your best rates. But if a pottery enthusiast discovers your products via referral, you've every reason to charge a little more — and maybe even kick back some of the premium to the referrer.
Tim Beyers Tim is a freelance business writer. He writes about the business of innovation, comics and genre entertainment on The Full Bleed.
