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  1. #41
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    In 2018 I cold called a supplier who had abruptly taken his product off the market. He had been selling this product for 30 some years and was known the world over for it. I used the product occasionally when specified by a customer. He came into the shop one morning to find his machinist dead on the floor. At 73 he wasn’t able to continue making them.

    The product is an extremely expensive product to make, low demand, very low sales. Very slim margins. Only one of the products in the line has any competition.

    We talked frequently for a couple months, and I machined a batch of parts for him. After receiving and inspecting the parts he asked if I would be interested in taking over the product line. I explained that I couldn’t afford to pay anything for the product line. He was just thrilled that someone would take it over.

    I invested probably $30k in tooling fixtures and time re engineering his products, standardizing them, making models and drawings. The first year was $6k in sales. The first product I made I put $15k in inventory on the shelf. This year I am finishing two more products which will put another $30k in inventory on the shelf.

    While these products have slim margins, I also install these products for customers, which is another few hundred dollars per part.

    So I say all that to make the point that if you enjoy it and make a little money, go for it. Not all of us can make $35k a year putting stickers on parts like Garwood.

  2. Likes DrHook, mountie, Bobw, kustomizer, gustafson and 1 others liked this post
  3. #42
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    The key being while you invested in your own tooling and inventory, you did not pay for the product.

  4. #43
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    Quote Originally Posted by Pattnmaker View Post
    One option would be for you to own the pattern. He buys the machined castings from you. You can recoup pattern costs over time same as if you had his business. He takes care of all the "customer fulfillment" that's worth a lot. Talking with single order customers can burn up a lot of time. If you're not really set up for regular shipping, packaging and shipping can burn up a lot of time.
    His markup will probably be less than you can pay someone to do the fulfillment etc. No hurt feelings etc. Only thing I would maybe do is write up something that he has to maintain a certain level of sales to maintain exclusivity of you selling him castings.
    In agreement with you, I think "owning the pattern" is often another bad assumption business's make. The proprietor or business who is outsourcing machining often thinks that the pattern is like an irreplaceable thumbprint for their product that they need full control over, but honestly the subtle differences between the "original pattern" and another that someone might make copying it are enough that a customer can't tell unless the product is something that collectors and appraisers will scrutinize. The only thing they are saving in controlling the pattern is the investment that went into engineering and constructing it, and to that end it's no different that the fixturing, prints, and programs.

    We have a TON of patterns from machinery we used to and currently make, but the sad truth is that foundries won't use most of them due to age and the style of construction. My experience has been that most foundries only want to use board patterns that are in great shape and fit their equipment. Any kind of repairs or updates and they quote building a new pattern. So unless I find foundries that still employ the old timers who don't mind using old loose patterns, then our stock of original patterns are nothing more than patterns for the pattern-makers to model from and hopefully make their job easier.

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  6. #44
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    Quote Originally Posted by Fal Grunt View Post
    In 2018 I cold called a supplier who had abruptly taken his product off the market. He had been selling this product for 30 some years and was known the world over for it. I used the product occasionally when specified by a customer. He came into the shop one morning to find his machinist dead on the floor. At 73 he wasn’t able to continue making them.

    The product is an extremely expensive product to make, low demand, very low sales. Very slim margins. Only one of the products in the line has any competition.

    We talked frequently for a couple months, and I machined a batch of parts for him. After receiving and inspecting the parts he asked if I would be interested in taking over the product line. I explained that I couldn’t afford to pay anything for the product line. He was just thrilled that someone would take it over.

    I invested probably $30k in tooling fixtures and time re engineering his products, standardizing them, making models and drawings. The first year was $6k in sales. The first product I made I put $15k in inventory on the shelf. This year I am finishing two more products which will put another $30k in inventory on the shelf.

    While these products have slim margins, I also install these products for customers, which is another few hundred dollars per part.

    So I say all that to make the point that if you enjoy it and make a little money, go for it. Not all of us can make $35k a year putting stickers on parts like Garwood.
    I have done enough of this stuff, exactly what you have laid out in your post over and over and over again, that I won't do it for chump change. I've been fooled too many times into thinking there's some untapped market just beyond the horizon... I do my research and when I find something the numbers say are a winner I put everything I've got into it and hold on.

    I have products I still sell that generate less than a few hundred a year. Stuff I spent many thousands to develop and put stock on the shelves and promote.

    You do whatever you want with your time, it's yours. If you are happy that is all that matters.

    My advice, whatever you do, is to refuse to stagnate. Innovate, learn from your products and create more.

    That $35k a year product is just a product of observation. I take a new part that is built private label by the millions for an OEM and put a high quality sticker on it that says exactly what it does and who made it (not me). I have the manufacturers endorsement to apply their brand to their own parts. Then I sell it for 80% less than anyone else.

    My biggest netting product has a small margin and big upfront costs. Tons of machine time. $250 in aluminum, $25 in anodizing, $15 in stainless hardware, $2 in laser cut steel, $3 in zinc, $18 to pack and ship it and it sells for $550 minus credit card fees and advertising costs. I don't remember how many hours of machine time there is into each one, but it's over 5 hours. But I can bank on selling almost one every single day as an average. If I raise the price, sales tank. If I advertise more it doesn't convert into sales. It's just slow and steady and sells worldwide.

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  8. #45
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    Quote Originally Posted by Garwood View Post
    I have done enough of this stuff, exactly what you have laid out in your post over and over and over again, that I won't do it for chump change. I've been fooled too many times into thinking there's some untapped market just beyond the horizon... I do my research and when I find something the numbers say are a winner I put everything I've got into it and hold on.

    I have products I still sell that generate less than a few hundred a year. Stuff I spent many thousands to develop and put stock on the shelves and promote.

    You do whatever you want with your time, it's yours. If you are happy that is all that matters.

    My advice, whatever you do, is to refuse to stagnate. Innovate, learn from your products and create more.

    That $35k a year product is just a product of observation. I take a new part that is built private label by the millions for an OEM and put a high quality sticker on it that says exactly what it does and who made it (not me). I have the manufacturers endorsement to apply their brand to their own parts. Then I sell it for 80% less than anyone else.

    My biggest netting product has a small margin and big upfront costs. Tons of machine time. $250 in aluminum, $25 in anodizing, $15 in stainless hardware, $2 in laser cut steel, $3 in zinc, $18 to pack and ship it and it sells for $550 minus credit card fees and advertising costs. I don't remember how many hours of machine time there is into each one, but it's over 5 hours. But I can bank on selling almost one every single day as an average. If I raise the price, sales tank. If I advertise more it doesn't convert into sales. It's just slow and steady and sells worldwide.
    My mention of you was more of a tongue in cheek compliment. As in, we all, literally, cannot have a job like that. Kudos to you for finding it. If I had one, I’d find one more and call it quits. $70k a year to package someone else’s product and ship it would be grand.


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