frustrated by entrepreneurship

Physical Products Suck and A Rant on Entrepreneurship

Erik Thoughts of a Mastermind 13 Comments

frustrated by entrepreneurshipWarning: what you are about to read is more or less a rant on entrepreneurship, wantrepreneurship, and my current thoughts on life.

5:00 AM, August 2nd, 2017 – Alarm ringing, sun not quite over the horizon, I woke up in a slight daze. Time to get to work on my side hustles before heading off to work around 8!

Yesterday, my business partner and I started packaging up the 19 kombucha tea subscription kits that were ordered through our kombucha kit website and the Kickstarter we successfully completed. These 19 kits represented roughly $900 in sales. While $900 in sales in the first 3 months is pretty good for a new business, I have a lot of thoughts on the subject as I’m frustrated, happy, and reflective all in the same moment.

Below are my thoughts on physical products, government entities, planning, taking action, and work.

Why Physical Products Suck

Why do physical products suck? Time, money, regulations, shipping and digital products.

Physical Products Suck Because of Timemail kombucha subscription kits

I woke up at 5 AM today and struggled with boxing tape and labels for 2 hours. I finally got all of the boxes ready to go. Yesterday, I spent about 5 hours doing various things: getting the boxes ready, picking up bubble wrap, and putting the jars and ingredients in to the boxes. We only had 19 boxes to ship out – while this was our first time shipping the kits, 7 hours is a lot of time. We will get better, but as time goes on, if we need to fill orders of 100 kits, that will take full days…

Add on the 5 hours we spent at the commercial kitchen, and the endless hours of getting to this stage, this has been a time consuming endeavor.

Physical Products Suck Because of Money

It cost us $295 to buy 9 lbs of dried strawberries. It costs us $30-40 to make one of these kombucha kits because we are still tweaking the process. To make $100 in profit, we need to spend $300-400. This is a decent deal, but could be better.

Physical Products Suck Because of Regulations

For the kombucha kit, we needed to get into a commercial kitchen. To do so, I needed to get certified in food safety and get a license to handle and sell food. We needed to have appropriate labels to comply with food law regulations. Most other physical products have regulations as well.

Physical Products Suck Because of Shipping

Once I get my products complete and sold, now I have to ship it to you. I have to consider the safety of the person receiving my product and the safety of the product. Bubble wrap, wrapping paper, boxes, tape, shipping labels – it all adds up to a lot of time and money.

Physical Products Suck Because Digital Products are Better

Do digital products take a lot of money to make? No – a simple internet connection and Microsoft Word would do the trick for an ebook. Do digital products take a lot of time to make? At first, yes, but in the long run, no. Do digital products require the creator to meet regulations? Sometimes, but usually not very restrictive ones. Do digital products need to be shipped? Nope! Email and file transfer baby! Conclusion: digital products are better.

A Conclusion on Government Entities (USPS is the best, but still horrible)

I’ll start off by saying most generalizations are false (see what I did there). Then I’ll continue: most government entities are incompetent. Why do I say this? I tried printing off 19 labels for the boxes and when it came time to pay, the website would not accept my payment. Here’s the best thing though.. I’ll just let it sit here:

WHAT’S GOING ON HERE??? So you are telling me the payment goes through, but for some reason it can’t complete it, and so then you refund it? What kind of incompetent programmers do you have? I googled this issue and it’s been occurring since 2010. Why hasn’t this been fixed? No one knows…

Though, I’m very happy that it isn’t going to cost me $58 to ship a 4 lb package to Alaska (cough, UPS), but come on! Ugh, guess I’ll have to wait in line at USPS to get this done.

Overestimate Time, Money, and Yourself (read: Overestimate Everything)

We wanted to get these kombucha subscription kits out at the end of June. Then reality hit: food safety laws are a thing and we needed to get into a commercial kitchen. Over the past 2 months, I’ve became a Certified Food Manager, got a Retail Food Handler’s license, and got into the commercial kitchen to package up goods. Looking at this, I’d say it was a success and the hard parts are behind us. My point here, is overestimate the time to bring your product to the market…

Which brings me to my next point (and follows from my previous section on USPS): overestimate the amount of money you will need to spend on various things. $261 to do priority mailing for 19 things? $20 for a 4 lb package to Alaska? $89 for food labels? $731 for LLC registration? $494 for a trademark? $137 for the kitchen rental? It all adds up.

In my introduction to HOWLinfuse Kombucha post, I laid out the potential profit for each box.

Item Cost
One gallon FDA-certified glass open mouth fermentation container $3.40
1 Healthy SCOBY and Starter Liquid for Fermentation $8.50
4 Oz Organic Green or Black Tea $1.90
Imported Hawaiian Turbinado Sugar $0.65
Delicate Dried Fruits For Sweetening $4.70
12″x12″ Fine Cotton Cloth and Band for Fermentation $0.80
Box to ship in $0.88
Tea Holder $0.77
Choices of Herbs and Flowers for Tastes $2.95
Shipping $5.00
Total ~$30

This looks fine and dandy, until we actually did the whole thing. I need to compile the numbers, but I think our box will cost closer to $40 because of shipping and production costs.

My point here is something can look great on paper in theory, but in reality, costs add up, and what you thought would be a profit, isn’t that great anymore (This goes back to my first point on physical products sucking!!)

While there have been some disappointments in the time and money areas, for me, I’m very pleased with what I’ve been able to accomplish. What about yourself?  You can do all this too. Be confident in yourself. We underestimate what we can do because of confidence reasons. Overestimate what you can do in a few months – you’ll surprise yourself! 🙂

A Brief Note on Wantrepreneurship

My roommate asked me the over week, “So, how’s the thing with Jake going? Are you just kind of planning things out, or what?” My reaction internally was “WTF? Planning? Who do you think I am? I take action dude.” I composed myself and said, “Oh, no, we are doing stuff. We have sales and we are shipping out the first boxes at the end of the month.”

Before I rant real quick, first, a definition:

Wantrepreneur : noun : A Wannabe Entrepreneur

You want to be an entrepreneur? Stop researching. Stop planning. Start Doing. I’ve learned more in the last 3 months than I ever did “researching” by “reading articles” or “watching videos”. I’m a Certified Food Safety Manager for crying out loud – the business paid $84 for me to get training and now I’m certified. It took about 16 hours of education and I did it. Am I a food expert? No. Am I a foodie? Not really. Am I determined to get stuff done? Yes.

For you, build a website, start a blog, do something. Try to sell stuff to people, network. It’s really not that hard to start doing.

I think a lot of people who want to get started think they have to have the perfect idea. Guess what? Ideas don’t mean anything – the best idea and no or horrible execution is worth about $0, give or take. For any wantrepreneurs out there, and you know who you are, take action today.

Do Something to Work Towards Your Goals EVERY DAY

Turn Simple Daily Disciplines into Massive Success & Happiness – The Slight Edge

compound interestWhy am I going to the post office in about an hour to drop off 19 subscription kits? I took action. BUT, it wasn’t enough to do it just one time – I’ve woken up each and every day and said to myself, “Okay, what’s the next step, what can I learn, what can I do, how can we push this forward?” Like I mentioned above, we overestimate what we can do in 1 day, and underestimate what we can do in 1 month. My business may be in the red right now, and I don’t even know if we will continue to get sales, but one thing I do know is I’m much more mature as a person than I was 3 months ago, I understand the difficulties of running a business, and I really haven’t even gotten started yet.

The Slight Edge, by Jeff Olson

Buy this Book!

As we learned in The Slight Edge, you are in complete control of your life. What are your goals? Write them down and work at least 15 minutes each day on them. Do you want to lose 20 lbs? Walk at least 15 minutes a day. Do you want to become rich? Make it a daily habit to review your financials and track your income and expenses. What about getting a promotion at work? Spend at least 15 minutes reviewing relevant news in your industry and learn something new about your workplace.

 

It’s not rocket science – consistent effort over time leads to big results. Get out there, do it, and do it every day.

Conclusion

Well that was fun. I started this post at 7:02 AM and it’s now 7:59 AM, just in time to get sent off by MailChimp to you, my reader. I hope you enjoyed the post and let me know in the comments if you have similar or different thoughts on any of the points I made above.

Off to the post office!

Erik

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Comments 13

  1. Man, getting up at 5 AM to package goods AND write an article all by 7?!?! That’s commitment. The best thing about the package costs you’ve outlined is that the bigger the business you create, the more those costs will decrease due to leverage you’ll have with the supplier you use. So keep that in mind.

  2. My wife has talked on & off about catering local food events, but, we too would need a commercial kitchen. Barriers of entry can be steep for certain niches and that’s why we haven’t dived into a few potential income streams.

    You and your partner are an inspiration because entrepreneurship truly is a 110% effort commitment. I have a whole new respect for the Shark Tank participants since we started self-employment two years ago ourselves.

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      Hey, maybe we can swing a deal where I’ll be your food safety manager and you can fly me out whenever you have an event 😉

      I agree with you Josh… there’s lots of barriers to entry in a lot of industries – that’s why I enjoy blogging 🙂 easy to start and it’s fun!

  3. Whether this business makes a killing or not, it’s a great story and sounds like it’s also providing great lessons. I worry about the limited leverage you appear to have, but the education it’s providing and the skills and expertise you’re picking up can be applied in other endeavors as well. Congratulations on all of the wins to date, and best of luck getting it into the black.

    And most of all, thanks for sharing!

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  4. This is one of the draw back of being an entrepreneur or your own boss. Some people think that working for a corporation is stressful, but being your own boss can give you a lot of stress too. In a different way.

    A lot of people fail because that cannot handle the stress, lack of profit at the beginning, the amount of time that they spend to get their business off the ground.

    Keep on grinding Erik, once you get over the growing pain stage and started to be more efficient, things will get better. Hopefully, more sales will come your way. 😀

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      It’s very interesting. Luck for me, I have a business partner who is supportive and a day job to fall back on if things don’t go so well.

      Thanks for the support Leo 🙂

  5. I haven’t done anything with physical products, but I understand the issues. I’ve done some side hustle work on the service side, and I always come back to the idea that I need something that scales better without eating all of my time. I’ve been much more selective in my side hustle hunt lately. It needs to be either something that I really enjoy or something that can scale really well.

    Definitely sounds like you are learning a lot and growing as an entrepreneur. Congrats and good luck!

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      Yeah I agree with you… finding something that is scalable is key it seems! I’m still trying to figure it out – though it’s a fun experiment! 🙂

  6. Ah yes, the joys of your own business. It’s good, bad, sometimes ugly and yet wonderful all at the same time. You need to not only overestimate the amount of time it takes, but also the amount of money it takes and the amount of total effort required. One can never know what it’s like until you just do it. Wishing you all the best!

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      Hey Amy, I really appreciate the support from you. It means a lot and I’m always happy to see your comments and shares! 🙂

      I haven’t forgot about the affiliate link for your site… it’s on my list!

  7. With packing stuff for shipping, having your space organized right helps a lot. It may take a few times for you to figure out the best set up, but once you get your system you’ll speed up a lot.

    Also, most of the folks I know who ship physical products get a lot of their supplies from Uline. If you’re doing bulk, it seems to work out better and you have more options than at most shipping supply/office supply places.

    Best of luck, Erik.

  8. This is such an inspiring post and a real look at what it’s like to start your own business. I’ve been reading about Amazing FBA and have been itching to have my own product. But I have other priorities in life that I need to take care of first. Looking forward to more updates on your business! 🙂

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