Brandy80

Market Saturation vs Product Exansion

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Here's a little background on our "business," which is really just a pretty profitable hobby at the moment. The husband had a little wood working business he called Steve's Wood Shop several years back, prior to the grand ol' Internet. His entire market was minimized down to one local flea market, word-of-mouth, and a few flyers at the market. Needless to say, he didn't do very well and gave it up.

Fast-forward a few years and enter his new business student wife who also has a love for all things wood:

I found one of the very few items he'd kept in storage from his earlier venture and with permission, and a lot of doubt on his end, I posted it on a local internet sales site just to see what would happen. Ended up selling 6 within an hour. We had to set people back a few days and rush off to the lumber store in a hurry so we could get that template and make a few more. The next day, 4 orders, then every day that week at least 1-2 orders and about 20 on the weekends PLUS about 25% of our customers returned because their friends and family wanted one too.

So, we're now up to our maximum output due to time restrictions but we're making pretty good profits.

The question is (finally), do we continue with this one single successful niche market product until our local market is saturated or do we attempt to scale back so we can work on some other similar products that might yield even higher profits, and gain a larger customer base and move closer to launching ourselves as a bonafide business? 

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I think you are answering your own question! The latter makes more sense to me, as saturating a local market will mean your orders will slow down eventually - depending of course what you define as "local".

I'm intrigued though, what is the item that you have been selling? 

 

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8 hours ago, Brandy Downing Hunter said:

Here's a little background on our "business," which is really just a pretty profitable hobby at the moment. The husband had a little wood working business he called Steve's Wood Shop several years back, prior to the grand ol' Internet. His entire market was minimized down to one local flea market, word-of-mouth, and a few flyers at the market. Needless to say, he didn't do very well and gave it up.

Fast-forward a few years and enter his new business student wife who also has a love for all things wood:

I found one of the very few items he'd kept in storage from his earlier venture and with permission, and a lot of doubt on his end, I posted it on a local internet sales site just to see what would happen. Ended up selling 6 within an hour. We had to set people back a few days and rush off to the lumber store in a hurry so we could get that template and make a few more. The next day, 4 orders, then every day that week at least 1-2 orders and about 20 on the weekends PLUS about 25% of our customers returned because their friends and family wanted one too.

So, we're now up to our maximum output due to time restrictions but we're making pretty good profits.

The question is (finally), do we continue with this one single successful niche market product until our local market is saturated or do we attempt to scale back so we can work on some other similar products that might yield even higher profits, and gain a larger customer base and move closer to launching ourselves as a bonafide business? 

raise your price.  if they are selling that fast you can probably raise the price 10 or 20% (or more).  

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Bart, when I say local, I mean that I'm advertising on FB sales groups that are all within 5-10 miles away from us. And I guess I'll share. Only cuz you guys are all so cool. 

Chevy Shelf 1.jpg

Chevy Shelf 2.jpg

Chevy shelf 3.jpg

Chevy shelf 4.jpg

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18 minutes ago, wtnhighlander said:

Have to agree with Brendon, don't limit yourself. Of course, don't dig yourself into any trademark infringement lawsuits, either....

Haha my response was more a tongue in cheek ford joke vs the obvious Chevy bow tie.

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Brendon_t and wtnhighlander, we've actually been looking into trademark infringement. Our bowtie doesn't seem to qualify as infringement and the only way we could found liable for Ford would be if we directly competed with their product...which we obviously don't. 

We have been considering several options to expand into the Ford shelves but have hit a wall on how to best do the lettering. Vinyl looks too cheesy and stenciling would take too much time... we do however have plans for a similar Harley shadow box and clock..

harleyshelfpattern.jpg

harleyclockpattern.jpg

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I'm not a lawyer but know that all 3 of those are registered trademarks to their perspective companies,  and I know personally that HD takes their tm serious.  An archery club I used to shoot with used the general shape on shirts for the club and were sent a cease and desist order to stop using it. 

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2 hours ago, Brendon_t said:

I'm not a lawyer but know that all 3 of those are registered trademarks to their perspective companies,  and I know personally that HD takes their tm serious.  An archery club I used to shoot with used the general shape on shirts for the club and were sent a cease and desist order to stop using it. 

Interesting you bring this up; there was some heated discussion on another forum regarding this. Long to the short, there was a crafty fellow who was using logos/art from an established game maker and making woodburning plaques of the artwork. There was a bit of dust-up on the legal ramifications involved.

The general consensus is that you cannot use another company's intellectual property for your own financial gain. It is the same reason why in the next month you will hear advertisements selling big screen TVs for "the big game" because they cannot use the term "Superbowl" because it belongs to the NFL. The NFL has not licensed that to every yahoo to use. Some companies may license or allow some of their IP to be used freely. The question then becomes, is the trademark/copyright holder willing to pursue it or seek/prove damages? 

However, copyright/trademark differs from country to country and application to application. I would seek an official answer from a practicing attorney in the matter. The design is certainly neat, but the last thing you want is to have your burgeoning business squashed by a C&D...or worse.

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the bowtie may or may not be infringement.   a bowtie is a generic shape so I would assume chevy has a trademark on a bowtie with more specific parameters.  samething with an oval.   The harley chevron is pretty specific so you are likely in thinner ice there.  the minute you refer to "chevy" "ford" "harley" or anything of their trademarked terms in your marketing materials you are screwed. 

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@Mike. I saw the shape and went straight to Google. The slope of the tails and proportion of the knot look dead on. Making money on it looks inappropriate to me. Sorry OP, that is just my understanding. I would encourage you to very quickly to diversify to move away from anything near trademark infringement. 

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Yeah.  Chevy wouldn't bat an eye if this was brought to their attention.  Which it wouldn't be.  At 15 bucks a pop it would cost them more for their lawyer to type up a C&D letter than it would be worth for any reason.  If you had a factory in China pumping out thousands of them a day and were selling them on Amazon, different story.  Keep doing what you're doing...and start charging more. :)

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I was looking into something similar with DC comics IP, and even tried to find someone to contact about licensing certain logos. I never did find a person to talk to about it and still have no idea how it is legally done. But I hear that DC aggressively pursues people that are using their stuff without permission. So I haven't started on my path. But it seems to me.. so many dozens of small places selling Batman related merchandise - there is just no way every one of them paid the thousands of dollars that was required to license the logo. But I don't click "order" on the product and get a detailed history of whether or not they get sued out of business a year later. 

 

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When it comes to IP, there is no right, wrong, legal, or illegal; there is only money. And don't think the big guys ignore the little guys, I got a C&D for a pacman shape before ever selling one.

-- Rick M

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On February 6, 2016 at 0:12 PM, Rick A McQuay said:

When it comes to IP, there is no right, wrong, legal, or illegal; there is only money. And don't think the big guys ignore the little guys, I got a C&D for a pacman shape before ever selling one.

-- Rick M

Did you paint it yellow, and have some blue ghosts follow it? 

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I know this is old, and you've probably made some decisions and done some experiments since your OP, but here's what I'd do.

I'm not a professional woodworker by any means, so please grab some salt, but if there's something you want to make and sell,  do just what you did with the bowtie shelf: make one, list it, respond to orders. Just be realistic and upfront with your customers about how long it's going to take to deliver before they pay you.

You can do whatever you want, keep making bowtie shelves as long as people are asking for them. As long as you're not stockpiling things you don't already have orders for, I wouldn't even think about saturation. Most semi-professional craftspeople I've seen stumble when they start asking too many questions rather than just making and selling things.

As far as IP law, that's another question that I wouldn't even ask. The worst thing that's going to happen is you get a C&D letter, then you just C&D and find something else to make. Unless you start making TONS of money, or start building trucks and motorcycles.

Anyway that's just my two cents. Make whatever you want, and if people want to pay you for it, make some for them too.

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