Quick chat with Daniel Dunsford On Custom Ordered Goods
I was reading an article on successful small business ‘Shoes of Prey’, these guys seem to be onto a good thing. I sat down with Daniel and asked him a few questions about custom ordered goods.
Shoes of Prey allows the customer to design their own shoes. Choosing the heel, toe, fabric, color and embellishments.
What do you think about Shoes of Prey, do you think this is a smart business model? And why?
Shoes of prey is a smart business model – they make products to order. From our experience these are the most profitable and least risk types of businesses to be in. You don’t have to produce in the hope that someone is going to buy your product, someone has already bought your product, so you know it’s going to sell. Plus you’ve got low to no inventory costs as its tailored to the actual order.
Do you have clients that use this particular business model of made to order?
Yes they are our most successful and profitable clients. We have shoe wholesalers, specialty toys manufacturers, who all supply on made to order – they are the ones that are thriving. If you think about it wholesalers have been using this model forever.
What about clients that don’t follow this business model?
We have had clients that don’t; generally they are risky and not as profitable. Most times it doesn’t end well as they have taken on too much stock they can’t sell (as they don’t have any orders). We call this speculative purchasing which is very risky as you are guessing how much is going to sell rather than custom making it to a solid order.
Most business people are very optimistic, that’s a good thing but you still need to be realistic. Sometimes they are over optimistic for what the demand is for their product so they over order and then they can’t sell it. Plus they are stuck with finance costs and holding the stock.
What’s constitutes as a proper order from a prospective client?
It has to be iron clad. It has to have the name, address, order number plus exact amount the customer is purchasing. It must be signed off before the goods are ordered. It can’t be a wishy washy promise.
Would you finance someone who didn’t have any orders for their stock?
No way.
