We have been working on our quickbooks for the 2010 tax season. Because we are currently the manufacturer, there are some complicated issues for keeping track of inventory. I always thought that inventory was what you have on hand ready to sell. Not so when you're the manufacturer. Inventory consist of the raw materials to create your product plus finished product for sale. We found out that our version of quickbooks (Pro) isn't really set up for this type of business and makes things more complicated to keep track of. Apparently if you're going to do manufacturing and whole sale, you should use QuickBooks Premier.
We'll use what we have for now, but probably in 2012, we'll upgrade if we're still doing the actual production. You can save yourself a lot of work if when you buy your materials, if you break it down to how many items that batch of raw materials will make. As an example, you buy 100 pounds of flotsam and jetsam for $100 to make your patented Goober Ball. It takes one pound of flotsam and jetsam to make a Goober Ball. Your materials cost is $1 of raw material for each Goober Ball. Now we all know that Goober Balls sell very well and are highly profitable. You'll make a fortune.
Trust me, you'll need this information when you start your setup for your company.
Friday, February 18, 2011
Thursday, February 17, 2011
Google Adwords
I started experimenting with google adwords a couple of weeks ago. I don't know how it will go, but it is really interesting. I set up Google analytics to track the clicks on our site. I bought a book written by Perry Marshall called The Ultimate guide to Google Adwords. In the book he explains how Google evolved and how to operate in their system. He talks about picking related Keywords for an ad test. You then create 2 ads and run them at the same time. After a few clicks, you throw out the worst performing add and replace it with another one. Your goal is to try and get a better click through rate than the ad you kept. You keep doing this until you have the best CTR possible (2% is good,4% is Great). Then you move on to the next set of keywords and do the same thing. Eventually you have a few ads running that are generating clicks to your site. It is a very methodical approach. I really recommend this book if you are thinking about running Google ads. It will save you money.
You Tube Hip Hip Hurray!
Well, Professor Bayliwick finally made it onto You Tube. He's our character who discovered the Exterminite Crystal. My wife operated the camera and the professor did his thing as good as he can do things. Any way, this whole process is about promoting our new product. It's a matter of getting the word out to anywhere and everywhere that is cheap. Just an idea for you to consider when it comes time to start promoting your product.
Thursday, February 10, 2011
Copyright done.
We sent off our copyright today to the copyright office today. I filled out the information on the copyright offices website and then mailed the copies of our book. You can download a paper form and fill it out and send it in or do it online with their eCO file, which is an electronic filing system. The advantage of doing it electronically is that it cost $35 versus $65 and we will get our copyright registration in about 4 1/2 months versus 15 months.
After you fill out the form electronically, you have the option of uploading your copyrightable material and sending it electronically or printing out a barcoded label to attach to each copy of your book and mailing it to the Library of Congress. All of the information is on their site. I have a link to their site on the link page of this blog.
The whole process took about 20 minutes. The explanations on what information is required and what needs to be filled out is clear and helpful. I had read a book on copyright called The Copyright Handbook, what every writer needs to know. It covers every type of copyright so you only need to read the section that deals with the kind of copyright your looking to get. Reading that helped understand the form to be filled out.
After you fill out the form electronically, you have the option of uploading your copyrightable material and sending it electronically or printing out a barcoded label to attach to each copy of your book and mailing it to the Library of Congress. All of the information is on their site. I have a link to their site on the link page of this blog.
The whole process took about 20 minutes. The explanations on what information is required and what needs to be filled out is clear and helpful. I had read a book on copyright called The Copyright Handbook, what every writer needs to know. It covers every type of copyright so you only need to read the section that deals with the kind of copyright your looking to get. Reading that helped understand the form to be filled out.
Back from the trade show.
Well we got back from the Seattle gift show and we really learned a lot. We found out about how our packaging needed to look. We talked with a couple of showrooms about having them Rep us when we get ready to take our product to store shelves. All of the showrooms charge 15% to rep your product.
We also talked with a manufacturer that was at the show for his new product line he had just introduced. He told us that if we want to manufacture and sell whole sale that we should be at a margin of 3 to 1. For every dollar it cost us to make our product, our whole sale price needs to be 3 dollars. The reason for this is that manufacturers often give discounts on their whole sale price if the buyers are purchasing a given quantity. This is usually around a 5% discount. They also offer different terms of repayment depending on buying levels. As an example:
Minimum order $500 net 30days
$1000 order net 60days
$1500 order net 90days and 1/2 FFA
FFA stands for free freight allowance. This means in the above example, if someone bought $1500 worth of product and they paid within 90 days, you would only charge them 1/2 of the shipping cost to ship the product to them.
Usually the invoice shows the entire cost to ship the product, say $100. If they pay within 90 days they only get charged $50. If they are late, they get charged the entire $100.
Usually the more they buy, the longer they have to pay their bill.
Other things that are typically done by manufacturers is the initial order minimum might be $250 and then reorders might only be $100 or even $50 depending on the product retail price.
When we go to the Long beach show in March, we will be looking at more options.
We also talked with a manufacturer that was at the show for his new product line he had just introduced. He told us that if we want to manufacture and sell whole sale that we should be at a margin of 3 to 1. For every dollar it cost us to make our product, our whole sale price needs to be 3 dollars. The reason for this is that manufacturers often give discounts on their whole sale price if the buyers are purchasing a given quantity. This is usually around a 5% discount. They also offer different terms of repayment depending on buying levels. As an example:
Minimum order $500 net 30days
$1000 order net 60days
$1500 order net 90days and 1/2 FFA
FFA stands for free freight allowance. This means in the above example, if someone bought $1500 worth of product and they paid within 90 days, you would only charge them 1/2 of the shipping cost to ship the product to them.
Usually the invoice shows the entire cost to ship the product, say $100. If they pay within 90 days they only get charged $50. If they are late, they get charged the entire $100.
Usually the more they buy, the longer they have to pay their bill.
Other things that are typically done by manufacturers is the initial order minimum might be $250 and then reorders might only be $100 or even $50 depending on the product retail price.
When we go to the Long beach show in March, we will be looking at more options.
Tuesday, February 1, 2011
Road Trip.
Well, we're taking off for Seattle tomorrow for a trade show. While we're there, we are going to visit a couple of showrooms to see what we need to do to get our product on the store shelves. We will also be attending the trade show to possibly talk to people in the trade and pick their brains.
When we get back next week, I'll post everything that we learn.
When we get back next week, I'll post everything that we learn.
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