As The Redhead and I were chatting with some new friends between sessions at the Early to Rise Bootcamp, a big guy approached our little group.
To other attendees, his tattoos, piercings, the skull on the front of his black tee — and the large yellow letters reading “CORONER” on his back — may have seemed a bit menacing.
All I saw was a brother biker. A kindred spirit. “I’m Clayton,” I said, extending my hand. “You on a bike? What do you ride?”
“I’m Chad,” said the biker. “I brought a custom chopper with me.”
“Cool,” I said. “I ride a Screaming Eagle Electra Glide and The Redhead here rides a Heritage Softail with a big bore kit in it. You attending the ETR Bootcamp?”
Chad frowned and nodded. “Uh huh. Not really sure it’s going to do me any good, though.”
“How come? What kind of business do you have?”
“I want to sell motorcycle parts online.”
I saw the problem immediately. In fact, I saw a whole rat’s nest of huge problems for a bootstrap marketer like Chad.
“How are you going to solve the inventory thing?” I asked.
See, the way I saw it, Chad had two choices…
Choice #1: He could fork over a bundle to stock a warehouse with inventory. But that’s money he should be using to build his website and prospect list. Plus, it’s extremely risky to stock up when you’re just starting out and have no idea which parts you’ll need lots of and which ones you won’t.
Choice #2: He could try to find manufacturers or wholesalers who’d let him sell out of their inventories and then drop-ship for him. But finding a supplier willing to do that is easier said than done.
Plus, even if Chad found a supplier who’d work with him, he’d only be able to sell the parts they carried — which would put him at a huge disadvantage compared to his far-better-heeled competitors.
And then there was what I felt was an even bigger problem: Lousy margins. Say a part costs $100 wholesale and the list price is $200. Chad’s 100 percent mark-up sounds impressive — but his margin would only be 50 percent. He’d only get to keep half of the money his customers spent with him. And if he ever planned to offer a discount or put stuff on sale, he’d keep even less.
In addition, there are three excellent reasons why the parts business is not exactly an ideal one for direct marketers:
FIRST, start-up and promotional costs can be huge. Chad would need to offer thousands of parts. That means he’d need to build a massive, costly website and/or create, print, and mail big, expensive catalogs to his prospects.
SECOND, he’d never know who his best prospects were at any given time. Since he couldn’t know who was about to need which part — and then send those people the right promo at the right time — he’d be condemned to pull-marketing Hell.
Instead of creating a product funnel that allowed him to use low-cost products to attract prospects and convert them into paying customers — and then increase their buying frequency and average purchase by pushing regular outbound promotions at them — he’d have to wait for customers to come to him and hope that every possible prospect and customer knew where to find him.
AND THIRD, many parts customers may only buy once — just to get the one part they need. Spending big money to attract one-shot customers is no way to build a fast-growing business.
The final nail in the lid of Chad’s business idea: The field he was looking to enter is a crowded one. He’d be competing with huge companies with massive marketing budgets — like Arlen Ness… J&P Cycles… Dennis Kirk… and even Harley friggin’ Davidson.
The only solution to this dilemma would be to specialize in something that none of those companies offer — something absolutely unique. That’s a huge challenge given the number of companies offering their own lines of unique, custom products. But failing that, Chad’s new company would be dead on arrival.
The Coroner’s Solution
I am thrilled to be able to tell you that Chad found a brilliant solution at the ETR Bootcamp. And thanks to this ONE, SIMPLE IDEA…
- His inventory cost is now next to nothing…
- Instead of margins of 50 percent or less, Chad gets to keep between 90 percent and 100 percent of every revenue dollar he earns…
- Instead of having to spend five or even six figures to create a huge website and catalog, his start-up expenses are practically zero…
- His new model is 100 percent compatible with the push-marketing / customer-funnel model. He can also take advantage of search engine optimization to pull prospects and customers to him, and…
- He has products that are absolutely unique — and no competitors. The only place in the world you can get them is from Chad himself.
So what was this brainstorm that made what Chad paid to attend the Early to Rise Bootcamp the bargain of the century?
Well, let’s just say that Chad will NOT be selling motorcycle parts. He’ll be selling information: e-books, courses, videos, and maybe even live workshops to people who want to maintain, build, and customize their own motorcycles.
Brilliant, right? Right!
And Chad learned something else — something even more valuable. And in the process, he re-taught it to me: He learned about the astonishing power of persistence.
See, when Chad was laboring under his flawed idea, he ran into one obstacle after another. He could have simply given up… cancelled his reservation for the ETR Bootcamp… stayed home, saved his money, and gone for a putt-putt on that cool chopper of his instead.
But Chad had a dream. And he absolutely refused to give up, even when it looked hopeless. He simply kept working, investing in knowledge and thinking until he found the simple solution that empowered him to spend the rest of his life doing something he loves.
And unless I miss my guess, he’ll get rich as a result.[Ed. Note: Couldn’t make it to ETR’s Info-Marketing Bootcamp? You can still hear what Clayton Makepeace and a dozen other Internet business-building experts told Chad and his 200 fellow attendees. And, just like Chad, you can walk away with a solid foundation for your very own profitable business.]