Back in the late 70's, I was a partner in a fledging hobby ceramics business. We made "greenware" by pouring clay into plaster molds. People would buy the greenware, apply ceramic glaze to it, and it would ultimately be "fired" in a high temperature kiln to produce a brightly colored ceramic dish, ashtray, figurine or other decorative object. It was a good local business, but we wanted to do more. My partner had the idea of wholesaling greenware to other small businesses who taught the glazing classes and did the firing. There were people who did wholesaling already, but it was small potatoes. What we had in mind was a 4,000 square foot warehouse of greenware, and a projected sales volume of $300,000 a year with an 85% gross margin. That would be the greenware part; of course we also sold glaze, and brushes, and electrical supplies, as well as offering our own retail classes.
Well, we did reach those goals, but first we had a lot of discouragement from the other folks already "in the business". As we tore down walls and put up second hand supermarket shelves to hold the greenware, the old hands would wander in and shake their heads at our folly. Not that they didn't think the business wasn't there to be had; they knew that it was. Nobody liked pouring greenware; it's a messy business and can be physically difficult, especially for the women who ran most of the small shops that taught classes. The demand would be there, and we had the molds and the space and the equipment to mass produce. No problems with any of that. But the doubters saw a problem they didn't think we had properly considered:
"Where are you going to get the boxes?"
You see, greenware has to be packed to travel. It's fragile stuff, so the usual method was to put newspaper in empty boxes, add a little greenware, more crushed or shredded newspaper, and so on. You couldn't put too much in one box, so even a small order might use up two or three boxes. The owners of these businesses obtained their boxes in the same way they might if they needed some boxes for moving: they scrounged local supermarkets and liquor stores, and many of them engaged in "dumpster diving" behind those stores, picking the empty cartons out before they were hauled away. Depending upon a ready supply of boxes in dumpsters wasn't going to support the volume of commerce we had in mind. Ergo, it couldn't be done.
My partner and I used to laugh privately at this. It became one of our favorite inside jokes. Whenever someone brought up some imaginary problem, we'd laugh and say "Where are we going to get the boxes?". You see, unlike all of our competition, we actually knew what our profit margin on greenware was. It's a little complicated, because you need to take into account depreciation on the mold, spillage and of course the cost of the clay ("slip") in addition to labor, but we knew that a piece of greenware we sold for $3.00 was worth more than $2.50 toward our other overhead. A box of greenware could easily be $20.00 or more in profit, so where do you think we got the boxes? Of course, we bought them. Folded boxes don't cost much when you buy thousands of them, and that's just what we did.
Sometimes "Where are we going to get the boxes?" is a question you should be asking yourself, but sometimes it's a pretty funny question.
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More Articles by Tony Lawrence © 2009-11-07 Tony Lawrence