Overproducing on an Initial Product Launch to Try and Save a Few Cents on the Per Unit Product Costs

Date: 2008-11-19 20:50:33

By Bret Ridgway

I've seen it time and time again, especially with new authors getting a book published for the first time. They become so consumed with getting the lowest possible unit cost on the printing of their new book they order 5000 copies right out of the gate. So instead of paying $3.98 or $4.98 per book they get the unit price down to $2.98. Hooray, they saved a dollar or two per copy.

What happens next? 100 cases of books weighing 40 pounds or more each arrive at their home. They get stacked in the corner of the bedroom or in the garage, and there they sit, month after month after month. Sure, a few cases are opened and some books ship, but you're continually stepping around boxes and cursing yourself for ordering so many books.

You've tied up thousands of dollars in inventory that you hope you can sell. Hey, but you saved $1 or $2 per book.

If you're producing a "big box" package, you might also save some on the unit cost by producing more initially. But, unless you have a proven track record and can pretty accurately predict how many units you can sell, you're better off spending more per unit and having a lower quantity produced initially.

"Big box" packages can cost $30 to over $100 depending on what all is included in your package. So, you can conceivably tie up tens of thousands of dollars in production for units you hope you can sell - all because it saved you some money on the per-unit cost.

But what do you do if you sell more product than you expected?

Have a plan in place to deal with your customers in case your product launch is more successful then you anticipated. If you ask your fulfillment house to produce 100 sets of a product for a launch and then you sell 300, you've created a potential problem you'll have to deal with to keep your customers happy. Turnaround times for additional production can be several days or more.

It is recommended you have some digital component to your package that people can begin to read or listen to right away while they are awaiting arrival of the physical package. Or, if the package price justifies it, pull out a disc or small manual that can be shipped immediately to keep them happy until the "big box" arrives. Produce more of these up front than the full packages so you can immediately fulfill a portion of the package to all your customers.

It's primarily a matter of managing customer expectations. If you keep your customers informed about the status of things proactively, you can significantly reduce any possible negatives that can result from having customers in a back order scenario.


Author

Bret Ridgway is co-founder of Speaker Fulfillment Services, a company dedicated to helping information marketers. To pick up your own copy of his new "Information Product Development and Launch Checklist" visit http://www.50BiggestMistakes.com.. This articles came from MoreArticles.net.


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