Today, I wanted to share an interview involving a unique website business thought up, constructed by, and maintained primarily by just one person. Maury is a long-time MMB reader and e-mailed me recently about his new venture – PennyPortrait.com. There, you can purchase a kit that allows you to create a portrait of Abraham Lincoln solely out of differently-shaded pennies:
Each kit includes a poster of Abe Lincoln made from images of actual pennies. The poster is suitable for framing as is, but with a little effort, some glue, and 846 of your own pennies, you can have a unique work of art that truly shines. (No, really… it shines!)
Here’s the interview:
Where did you get the idea or inspiration?
I read an article online about a father and son who created a giant portrait of Abe Lincoln out of pennies. Their image was 24″ x 36″ and they used two shades of pennies. I thought other parents and kids might enjoy a project like this and went about trying to create an improved, easier to assemble version on my computer. Using four shades of pennies, I was able to decrease the size of the image to 18″ x 24″ (846 pennies) which seemed a bit more
Did you set up the website yourself? Do you have previous experience in this area?
I have a background as a graphic designer, but had only created a handful of small sites previously. The trick was to use one of the various free CSS templates available on the web and go from there. For example, the Penny Portrait site is based on this free template. Using a free CSS template allows you to create an impressive site in short order. Some of the graphic
elements took a little bit longer, but the layout was a snap.
Is this your first side business?
This is my first retail business of any kind. I’ve had a lot of experience with service businesses (animator/designer/consultant), but I’d never actually sold anything tangible before. Part of the reason I wanted to do this project was to learn how a retail business works with inventory,
suppliers, sales tax, credit card processing etc. It has been extremely educational from that standpoint.
Who sorts the pennies? Are you using child labor? (You could fund your child’s IRA this way…)
I just sell the kits, so customers are responsible for supplying and sorting their own pennies to glue on the poster. I had considered selling completed portraits, but I think the real satisfaction with something like this is to have something on the wall you created yourself. (That and shipping all those pennies could get expensive!) The sorting part is surprisingly easy if you have a bunch of pennies to start off with. I was able to sort enough pennies watching TV one night for at least two portraits. As far as funding my kid’s IRA, I toyed with the idea of paying him a “talent” fee to be included in the photos, but thought I’d better not push my luck with the IRS – He is only eleven months old.
(My mistake, the buyers provide the pennies. That’s much better!)
Do you construct the kits yourself, or are they put together by a third party?
I have a little assembly line in a spare room where my wife and I put the kits together ourselves. Each tube holds a poster, a booklet with fun facts about Lincoln and coin collecting, an assembly guide and a pouch with a 1943 Steel Penny. At this point, other than marketing, that is really the only time consuming part of our business.
How did you decide on pricing, and not making it too high or too low?
Pricing was one of the toughest decisions to make. I talked to a number of people including retailers to get a general idea. It is a unique product with no competition, so I’m not forced into competing on price – which is nice. My competition ends up being other unique products you can buy for about the same amount. One thing I learned is that brick and mortar resellers of your product typically use “keystone” pricing. This means that retailers expect you to sell them products at 50% off the suggested retail price. So if the suggested retail price is $20, a retailer will want to buy them from you for $10. This only applies to bulk orders, but my suggested retail price needed to be high enough that I could still make a little profit through traditional retail channels in addition to e-commerce.
What other difficult decisions have you had to make?
The toughest decision was how many poster to purchase initially. I wanted a high quality product, so didn’t want to skimp on printing or materials, but printing can be quite expensive. There are online places like PSPrint.com, which will print posters for you at great prices, but the paper quality is lower and when you include shipping, the savings disappear. I ended up going with a respected local printer to avoid shipping costs and to oversee the quality of the product. The trick with printing a poster this size is the initial setup fee is about $1,000 whether you print one poster or one thousand. My fun little “learn about e-commerce” project suddenly got expensive! Of course, the more you order, the cheaper it is, but it was
nearly impossible to guess initially what the demand for a product like this would be.
Another tough decision involved shipping tubes. I really liked the way my product looked in a clear tube, but the cheapest supplier of clear tubes charged $1.40 per tube and had a minimum order of 500 units. Cardboard tubes cost about half that and I could order just a few at a time. I ended up breaking down and ordering 500 clear tubes, but am using those strictly
for retail. Online orders I ship in the more durable white cardboard tubes. It was a tough decision at the time because $700 is a pretty big upfront expense for shipping tubes! (Not to mention I have a garage full of them.) This is one situation where my design sense vetoed my business sense. We’ll see how it works out.
How many hours a week do you spend on this project?
I would guess we spend about 5-10 hours a week on it at the moment. I have a full time job, so I mainly work on this in the evenings or on weekends. At this point, it is simply a matter of assembling the kits, and shipping them out as we get orders. My wife recently left her job to stay at home with our first child, so she is a big help in this regard. The only other thing that takes time is marketing. I’ve found that sales are directly proportional to how much effort we put into marketing. My wife does a lot with marketing as well.
What forms of advertising are you pursuing?
We use Google Adwords which is absolutely fascinating. It allows you to run variations of ads and use different keywords to generate targeted, effective ad campaigns. Google has shown my ads thousands of times and provided me with valuable feedback on who my target market really is. At the end of the day, it is a great business model because their interests are perfectly aligned with yours. They only make money when people click on ads, so it is in their best interest to make sure your ads appear where they will be clicked. I have an advertising degree, and one of the things that stuck with me all these years is that by simply adding the words “free” or “new” to an ad will cause it to drastically improve results. I tried this theory out in Adwords, and sure enough those ad variations were my most effective. Google
Analytics has also helped me in seeing what parts of the site people visit after they hit my homepage. I’ve been so impressed by Google I actually broke my rule of only buying index funds and picked up a little GOOG after the recent market crash.
In addition to Adwords, I’ve also had success advertising in various online forums. For example, I will hop onto a coin collecting message forum and give a free kit to anyone who guesses a number I’ve chosen between 1 and 100. I end up giving away a free kit, but I typically get about 50 potential customers to look at my product and even comment on it! It has been useful as a marketing tool and also for improving my product based on comments.
Oddly, one of the most successful forms of advertising I had nothing to do with! Someone submitted my site to “Stumbleupon” and it immediately received over 1000 hits. Stumbleupon is a very cool social networking application where users give a “thumbs up” to sites they find interesting or entertaining. By installing the Stumbleupon toolbar, you can rate sites you visit or click on “stumble” to have it take you to random sites others with your same interests rated highly. I was pleased to see so many people liked my site.
What other backend tools and/or third-party systems do you use?
I use E-junkie for my shopping cart system and have been blown away by the product and support. It costs me $5 a month for a polished shopping cart system that works flawlessly. I even contacted them about a unique problem I had (Texas charges taxes on shipping & handling, many states don’t) and they were nice enough to add that ability to their system. They also have a simpler version they provide for free if you don’t need certain features.
I went with Google Checkout for the payment processor for a couple of reasons. It was really easy to setup and was cheaper than PayPal. I was worried with PayPal that people would think they needed a PayPal account when in fact, all they need is a credit card. Google charges me 2% of the purchase price + .20 cents per transaction. So I pay Google .60 for every 20 transaction which is reasonable. They have a complete system you log into that makes billing and shipping a snap. The final reason for using Google Checkout was that when I spend money via Google Adwords, they kick me back a portion of what I spend on advertising in the form of free transactions. So if I spend $50 on Adwords in a month, Google will process
$500 worth of transactions free for me that month. PayPal and other merchant processors couldn’t compete with that.
Great. So how’s business?
Business is going well! We’ve sold over 100 kits so far and are really just learning how to advertise via the internet. This week, for example, we are exploring marketing via Amazon and Yahoo in addition to Google. We are also looking at the possibility of getting in some retail catalogs and have been working with local toy and coin shops who are now stocking the product. It’s very satisfying whenever an order pops up in my inbox.
Has your businesss been affected by the economic slowdown, or is it too early to tell?
The product is pretty unique, so I think for the people who want it, the price is not prohibitive. My main problem is making sure people know my product exists! It really doesn’t fit into a traditional product category which makes it a bit tricky to advertise. As the product just launched, I’m going to miss some Christmas opportunities (e.g. catalogs and retailers) but I’m hoping 2009 will be a good year for this product. There will be four new penny designs released next year to commemorate the 100th anniversary of the penny and Spielberg is also making an Abe Lincoln movie starring Liam Neeson. I’m hoping these events might generate some interest in pennies and Abe Lincoln. They certainly can’t hurt!
– End of interview –
I want to thank Maury for letting me pick his brain and see into the “nuts and bolts” behind PennyPortrait.com. I think there are a lot of us (me included) that have had their own niche ideas but haven’t gotten over the hump to making it happen, and I think he showed us some practical tools and tips to help us along.
Look for a giveaway of these neat kits soon. If you can’t wait, you can get $5 off using the coupon code “MyMoneyBlog” (I get nothing). If you have any further questions for Maury, please leave a comment below. If you’re an entrepreneur with a unique story and would like to be interviewed here as well, please feel free to contact me.
Past Entrepreneur Interviews: