Making Making Things Better Better

I’ve been hearing a lot about crowdsourcing lately.  In general it’s a good idea, tapping the collective brainpower of your fans or customer base to generate ideas you might normally have to rely on hired professionals for.  It’s been around for a long time, (think Betty Crocker recipe contests, American Idol or the 2002 vote for the new M&Ms color), but the Internet has made crowdsourcing infinitely easier and the scale infinitely larger.  The X Prize Foundation did this in 2004 when they offered a $10 million prize for the first reusable privately-built spacecraft.  $10 million may seem like a lot of money, but it’s a fraction of what it would have cost NASA to develop in both time and money.  Why?  Because they only had to pay for success.  They got the trial and error of the other contestants for free.

In a slightly different vein, Apple recently began offering free iPhone App development courses through Stanford University and iTunes.  The cost to Apple is minimal.  They just open up the developers’ software and course materials, all of which already exist.  In return they get a huge influx of iPhone Apps, all developed free.  They post the ones they like to their App Store, and sit back while they collect their share of the profits.  Of course, the developers are getting a great deal, too.  They’re getting everything they need, from the education to the the global distribution platform, to bring a useful and potentially profitable product to market.

And that’s what can be so great about crowdsourcing.  It’s symbiotic, mutually beneficial, win-win.  It’s become so popular that there’s even a crowdsourcing project designed to make crowdsourcing better (everything good goes meta).  It’s called “The Better Project,” and while it doesn’t seem to have a whole lot of feedback yet, if I know the Intertubes, it’s only a matter of time.

So how can you use crowdsourcing in your small business?  It can be as simple as sending a survey, holding a contest, or opening up a blog post to comments.  You can also produce idea collections, as books, zines, bundles of fabric or free downloadable art.  You can even build your entire business around crowdsourcing, like Threadless or Prickie.  Either way, as long as your customers are getting something out of it, whether it’s a prize, a commission or just better products, they’ll be happy to share their knowledge.

My Distribution Deal

This week I sucked it up and contacted a distributor.  I had been avoiding it for a long time because I didn’t think I could afford it.  After all, most distributors take about 20% of your wholesale price and I was doing fine on my own getting local stores to carry Sweet Meats.  I even had stores from other cities, states and countries contacting me about carrying my products.

But then I hit a wall.  I had a hard time finding stores outside of San Francisco that would be appropriate for Sweet Meats.  Those that I did find rarely responded to my cold calls (or cold e-mails) introducing my products.  Even those stores that contacted me weren’t responding when I followed up with line sheets and order forms.  I was spending many hours each week trying to drum up new wholesale business, which is only getting harder the more the economy tanks.

So I contacted a distributor.  For the past two years I’ve been getting his wholesale newsletters, so I know how hard he pushes for his clients.  He was also a customer of mine a couple of years ago and several of my sisters-in-plush use him, too, so I know he’s honest and reputable.  His 20% commission definitely takes a big bite out of my profits, but I figured I’d end up paying that much in warehouse storage before I sold everything anyway.

Our conversation was incredibly simple.  He already knows my products, and I already know his company, so there was little needed in the way of introductions.  What I didn’t know, however, is that his is not a drop-ship business.  He warehouses all of his clients’ inventory — for free!  This made the deal infinitely sweeter. I currently pay about $150/month for storage (it started higher, but has gone down as my inventory has decreased).  That means that I’m not losing any money at all on his commission for the first $750 in monthly sales.  I don’t know if such a set-up is the norm, but if I had known, I can tell you I would have called this distributor six months ago.

The lesson?  If you’ve just started your own line, there’s no harm in calling a few distributors and comparison-shopping.  There might be savings in the deal that offset an otherwise unafforable commission.  Now that I no longer have to worry about my wholesale accounts I can focus my time and energy on my retail business, which pays twice as much per sale.  Win-win!

Parks for a Day 2008

This past Friday was the 4th annual international Park(ing) Day.  Park(ing) Day was started in 2005 by San Francisco art collective Rebar, and has become increasingly popular ever since.  Ten merchants in Hayes Valley signed up to do it but I only saw five parks (and one neighborhood-wide installation).  The parks were heavily used during the lunchtime hours, and I think if more merchants participated, the neighborhood could become a real destination for this event (though people would have to take the bus!).

Propeller Modern created this little oasis, which people took full advantage of during lunchtime.  Those bright green bicycle parts were part of an installation through the Reaves Gallery.

For those without a lunch, Honey Ryder made snacks and lemonade available.

Zonal put a piece of public park in their park,

while True Sake’s park was the art.

Momi Toby’s liked the extra outdoor seating so much, they kept their park all weekend.

Long Live the Internet!

I love the Internet, and especially the blogosphere. Here’s why: yesterday a gentleman named Mr. Deslauriers submitted a comment to my post about U.S. Customs that was less than complimentary. It’s a little long, but I suggest reading it if you haven’t already.

My first instinct was to go on the defensive, despite the relative politeness with which the criticism was delivered. I briefly considered several routes: deleting the comment, editing the post, and dissecting/justifying every accusation with a well-considered retort. But I soon realized that that’s just e-fascism. Why write a blog if you’re not going to accept certain comments? Plus, on almost every count, the man is right.

Firstly, I didn’t make the distinction between a customs broker and freight forwarder. Mostly this is because for me (and everyone else I know who is a small importer), this is the same person, but it still should have been included. I then publicly insulted the entire profession (also because I and everyone I know who is a small importer has found their broker/forwarder to be somewhat shady). Making sweeping generalizations about any group of people is a mistake, however, and I regret it and apologize for it.

As for the simplistic and somewhat incorrect presentation of my information, such as “A customs broker: this guy gets your stuff off the dock and onto a truck,” I will concede that there are perhaps more accurate phrasings I could have used, but I was using a deliberate teaching tool. The above statement is true if your customs broker is also your freight forwarder, and is mostly true even if they’re not (a customs broker allows your container to leave the port, even if they don’t actually move it onto the truck). In the same way that your high school science teacher started by teaching you Newtonian physics, even though Relativity makes the facts simplistic and somewhat incorrect, I write simplified accounts of my experiences so that complete novices can walk away with a basic understanding of the subject at hand. In other words, I post the information I wish I had received when I was trying to figure out my first steps. I assume (perhaps incorrectly) that if my readers decide to be importers themselves, that they will do their own further research before moving forward.

On the whole, Mr. Deslauriers gave me some much needed perspective on a number of fronts. He reminded me that a blog is more helpful when presented as a personal account than it is as a set of prescriptive instructions (especially coming from a beginner like me), that prejudicial generalizations are more counter-productive than clarifying, and that comments that criticize are a much better use of the “social surplus” than those that praise.

I have asked Mr. Deslauriers if he would agree to be interviewed via e-mail so that I can put together some importing information that comes straight from an expert, rather than from the link-trawling of a beginner. Whether he agrees or not, he has made this a better blog by challenging me. I hope more of you will do the same. Thank you, Mr. Deslauriers.