But will it fly

Before investing a lot of time writing a business strategy and plan, we wanted to “market test” the product with subject matter experts (people in the interior design, home accessories, tabletop, and coffee accessories businesses) as well as with potential retailers. To do that we bought a small shipment of espresso cups, cappuccino cups and coffee cups from Terra Keramik of Switzerland.  It arrived in October 2005 (only a few broken pieces) and we promptly hit the road to solicit feedback on the product and our business plan.  We received a lot of positive feedback and encouragement!  People provided useful input about the design of the cups, the need for attractive packaging for a high-end product, the competitive nature of the tabletop business, and so on.

In our conversations we also came to realize that retailers would expect a 30-40% margin to “resell” the handcrafted tableware, which made the business unattractive to us.  And we would have to work out issues concerning logistics and inventory, shelf space, warranties, and so forth.  Ugh!  So we started to think about a pure online marketplace and our business strategy evolved in that direction.

Benefits of online strategy:

  • modest start-up costs
  • faster time-to-market
  • owning the customer and customer experience
  • control of brand strategy
  • combine products with relevant content
  • better economics
  • Challenges of online strategy:

  • customers would prefer to touch and hold the product
  • no customer base of an existing brick-and-mortar retailer
  • experiment with emerging online marketing methods
  • relatively high shipping cost of product
  • One of us had previous online experience, and we felt comfortable that it was a strategy worth pursuing, albeit not without risk.  Let’s see if it flies!

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