All About Our Failed Online Business Idea

It’s failure time! I’ve talked a little bit about an online business idea that my wife and I had about a year ago. I’ve even showed a few prototypes. But we’ve finally laid all hope or desire to pursue this business to rest. Here’s the story:

The Idea Forms
It all began when we got a dog. We discovered that not only do people love their pets, but they are willing to spend a lot of their disposable income on them. Dog bakeries. Dog clothes (the bane of my existence!). Dog birthday parties. After buying a few $4 squeaky toys, and having our dog completely obliterate them in 46.6 seconds, we started thinking about making our own dog toys. You can actually buy “squeakers” for about 20 cents each on eBay. Add fabric and stuffing, and you’ve got yourself a cheap squeaky toy! But it still lasted less than a day.

My wife is great at crafts and sewing things. After several prototypes and using our dog and our friend’s dogs as beta-testers, we finally came up with a very durable double-layered squeaky toy. The outer fabric is soft and fleecy, but the inner is super-tough. It lasted almost indefinitely without puncture for most dogs that tried it. To add a personal touch we even have an embroidery machine to add the dog’s name to each toy. Here’s a late prototype, complete with label and packaging:

altext

The Problems – Profit? What Profit?
After the materials added up, it was less than $3 per toy. If we managed to reach my price point of 3 for $25 shipped, that would give us about $4 profit on each toy. The problem was that it took us about 20 minutes to make each one, equating to a max of about $12 an hour. Add in the time to design and set up a website, advertising, packing and shipping time, and we’d average a lot less. We looked into local embroidery shops to outsource the customization, but it just wasn’t cost effective given our likely low volume.

In the end, I just decided all this manual labor wasn’t worth the effort. If we managed to outsource all the work somehow, and were able to just focus on marketing the product, maybe. I’d rather find an idea that scales well and takes very little time to maintain – but wouldn’t we all?!

Here’s a happy image I ran across :)

altext

Comments

  1. Why not outsource the production? If you know you have a market, all you need are the prototypes to get the orders. Keep in mind, the prototypes are never actually sold off. They are only used to secure the orders. Once you have confirmed orders for a few thousand, you can have them produced for you.

  2. You should have taken advantage of the workers in India/China!

  3. This is what eBay is for.

  4. You forget bark mitzvahs … ugh.

  5. It’s hard to cut your losses and shutter a business but sometimes it’s necessary…

  6. I love dogs (unfortunately do not have any)… if you have some prototypes you want to sell, I sure would love to get some for my friends who are lucky enough to have their own furry friends! ;)

  7. I have been fascinated by the Pet retail business for quite sometime. From my quick research over a year ago, I found that the Pet Retail business has steadily grown over the last ten years. Not bad at all.

    And, if you look at the retail clothing market in general, there has been a growth in niche retail stores that service specific consumers? which has yet to be done for the pet industry, in my opinion. The opportunity is there? don?t give up just yet ;)

  8. wow.. it looks really good though? I know a few dog owners that would totally dig it, especially if they can last more than a week.

    too bad the cost and profit isn’t worth it yet. still think it’s a pretty good idea though…

  9. There’s only one way any one can produce a physical product at competitive prices nowadays:

    Have it made in China.

    “Always low prices” also means “no more US production”

    sorry you had to find out the hard way

  10. Willie Dunk says:

    I have a couple of suggestions for you;

    First, why not make money off the illegal immigration problem? Just hire a small family of illegals for $6 a day to do the all the manual labor?

    Second… one word… China

    That is all.

  11. I’ve actually been to a bark mitzvah. Yikes!

    I have to agree with Tom. At this point you need to outsource production and reap the profits. I think you’ve got the hard part out of the way. Why quit now?

  12. It was interesting to read your story. A lot of people go through what you have. My company supports inventors in the product development and sourcing (manufacturing) process overseas (Global Sourcing Specialists, http://www.globalsourcingspecialists.com). And Tom is right, a model a lot of inventors are pursuing now is getting prototypes, using them to create sales, finding an overseas partner to handle the production (which can be tricky), and focusing on marketing themselves. Marketing and product development are crucial. Contact me if you like. Good luck!

  13. I’d love some of these…my dog loves soft toys, but she is a lab mix that is very good at destroying most of the expensive stuffed animal toys from pet stores. I’ve always thought that there should be a more durable soft toy for dogs somewhere.

  14. Everyone has the same great point of outsourcing. But on the flip side, sometimes we find that our perfect ideas can’t always pan out to be perfect. So what do you do?

    You learn from them. You try again.

    I doubt your story is anything of failure, rather of inspiration. Look what you’ve learned. Look where your experience can take you for the next million dollar idea.

    Thanks for posting about “doing” not only “thinking about and motivating”.

  15. LOL good try…looks like a stack of coach pillows tied in a ribbon to me, though…

  16. Remember, some of the best products on the market started off by smalling in small amounts early and after word of mouth quickly grew exponentially. If you get enough pre-orders it may justify the upfront cost of outsourcing the production labor.

  17. set the price point higher. Maybe $25 for one toy plus a one year warranty?

  18. “set the price point higher. Maybe $25 for one toy plus a one year warranty?”

    what? have you ever owned a dog? maybe jonathan should have not bought a cheap dog toy to begin with that brought on this horrendous business plan – your average pet store has plenty of squeak toys that are designed to handle strong teeth. For a lot less. And they don’t look like pillows (complete with hokey coverings) – as in, they are a lot more attractive to dogs when shaped like bones, etc. Sorry, but this idea really seems like it was doomed from the beginning.

  19. wow! there seems to be a growing niche of dog owners with extra cash to spend on their “children”. durable squeaker toys for the pups, and custom personalization and a pretty package for their human owners. great idea.

  20. I loved your presentation by the way. The ribbon is tied elegantly and the label looks very upscale. At least you went all the way producing your prototype, congrats! My husband and I have been talking and talking and talking endlessly about something we’ve yet to put together. So I’d say you did well whether or not you ever sell one.

    Maybe your next try will reap a bigger return.

  21. Why not sell a nice pdf of sewing patterns and construction plans? Since you ironed out all the wrinkles of putting this thing together, sell the plans for $4 and offer a custom embroidery “patch” or panel for cost-effective extra with their order–that way you don’t have to do the time consuming assembly and restrict shipping to small envelopes..if they order the custom stuff. Otherwise, it’s just a download.

  22. They don’t look bad to me. Did you try selling any on eBay? It’s a pretty good low risk way to try something like this out. Keep it up though: I keep throwing mud on the wall and hoping that some of it sticks. So far, not much has but I’ve learned a lot and made a few bucks along the way (and I keep trying).

  23. This is definitely a niche product, ideally meant as a special gift for a new dog/bark mitzah/birthday. We tried to make it a premium product, both in that is a soft toy that is durable (hard to find, but not impossible) and also it has the dog’s own name on it. We even went to one of those huge Eukanuba dog shows when it came to town to see other vendor homemade products, and while there were some soft toys, they were pretty much fleece + squeaker + stuffing.

    I will try it on eBay someday when have a chunk of free time. It may work out as a very low-volume product.

    I also want to thank Dennis of YoungMoneyBlog for giving me a price estimate for embroidery as well. I forgot how much it was, but I remember it being very fair considering we live 3,000 miles apart.

  24. Jay Griffin has the best idea of the bunch if you ask me. Making it as a kit, that someone would do for their dog makes it even more personal. You might not sell millions, but you have cut the production time to very minimal (cutting some cloth, assembling into a box, throwing in some instructions). They may require a sewing machine that is not as common as it used to be, but there are a LOT of crafters out there that you can sell to with the idea of selling them at their local craft fairs. Sell them on the durability and American Made points (you will know your strongest selling points) and how dog lovers LOVE to treat their ‘kids’.

    As for the embroidery, offer that as an ‘upsell’ so your price point is ok and then sell them on personalizing it for their dog. This way they have already decided to buy (when the low price is important) when they decide to do the add-ons. This works very well with mailorder stuff, or at least it did for us in the software world. Sell them on the $49 package, then add on states, business returns, etc. Pretty soon that $49 sale that was won due to low cost is now up to $495 plus shipping and they are still happy about buying it.

    You will make some ‘bare minimum’ sales without the customization, but we found that most customers upsell themselves without even needing a sales rep to talk them into it. Sure, some will copy your plans, but go back and sell them on the durability of the cloth you have sourced, the quality of your squeekers, etc. Make sure your claims are true of course, but basically convince them that they need to keep buying from you and most will or at least enough to keep you as busy as you want to be.

  25. Maybe you are trying to lowball too much on price. You are trying to target a market that spends mucho money on their pets but doesn’t want to spend “too” much money with one-day toys. What if you charged 12.95 or something per toy and changed the fabric enough to make it fancier so that it appeals more to the spoiler dog parents. Market it more as an upscale-product or worth that much money (being cheap is not always better if quality is the best).

  26. We’re on the same track here — have been trying to launch a home business or two in a while. I feel your pain. I have abandoned some good ideas too for the meantime. But we keep regurgitating these ideas out anyway!

  27. Don’t worry, may be you must evaluate your business and considered to try other business. If you want to make money online and are fed up of working in a 9 to 5 job then all you have to do is to scour the internet and find what job is most suitable for you.

  28. Unsuprised says:

    Why does profit have to be obscene? What is wrong with $8 an hour for a few months while you prove a concept and have something to present to a bank to get the 50k loan to start purchasing in *real* bulk, hiring laborers and all else that comes along with a small home business…

    Many successful business operate in the red for the first several years. Try not to think like an employee ;)

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