LinkBack URL
About LinkBacks
I friend and I are looking at starting a business. We both are trying to finish up degrees that focus mostly on finance, so we are a little slim on marketing and supply management knowledge, but we have a general idea of the theory.
Long story short, here is what we are looking to do:
We want to make a product that fits a particular niche that we plan to distribute through websites and retail stores that fit this niche. (Along the lines of making headers and selling them through Summit Racing, for example).
Some of the products will necessitate contracting an artist to do one stage of the design.
We realize that storage costs will reduce margins, so ideally we would get an order from the customer, place the order with the manufacturer, and have the manuf. ship directly to the customer's warehouse.
We are not sure how to go about presenting the idea to the purchasing agents for the companies through which we wish to sell the products.
Initial capital is limited. We are willing to incur more variable costs initially (that will eat into margins) to ensure that we don't end up invested in a bunch of fixed costs with a failed business.
So:
1) What would be a reasonable fee to pay to an artist/graphic designer to design each image? We would tell them, "we want this, this, and that," and let them make something to our satisfaction. If we don't pay a flat fee, what would be a reasonable (going rate) cut to give said designer for the rights to income from his design?
2) How does a customer described above usually pay for items? Are they normally on a consignment basis (we get $X when they make a sale), or do they normally just buy X units?
3) Would it be reasonable to approach a purchasing agent with the idea to see if there would be interest before paying the manufacturer to produce a prototype/samples? Do communications with purchasing agents ever occur through correspondence, or would we HAVE to home on a flight to go out and see them?
Thanks in advance!
Reply With Quote
Featured on:
