Our latest business endeavor with the skin care products has really been an eye opener.  Having mostly sold information and services for the past 10 years or so, selling physical products retail and wholesale is big change.

If you’ve been asking what things you should sell or considering switching from physical goods to services or information or vice-versa here are some things to consider. These are only my experiences and may be different for yours.

Physical goods Pros:

• Tangible and honest for the most part. People get to touch feel and evaluate the products. In our case the products are relatively inexpensive and offer instant gratification.
• Higher perceived value (but not always).
• Interesting and challenging (for me anyway) sourcing materials.
• More person to person interaction with customers and because the items are relatively inexpensive the interactions are less stressful and over quick if we don’t get along.  This was a big deal for me. Getting away from the computer was a primary goal.
• Inventory that can be liquidated for immediate cash in the event of an emergency.
• Very straight forward. Less complicated strategically in some respects than marketing information and services (though not entirely).
• Keeping customers happy is easier (so far).

Physical goods Cons:

• Lower margins (on our products) we have to move more product to make decent money.
• Inventory to track and store.
• Shipping costs - wow!
• Need for buildings and storage.
• If retail someone needs to be there keeping the doors open which either means employees or you. If you that limits the other things you can do.
• Distributors are expensive.
• Supply chain issues.

Selling and Marketing Information Pros:

• Can be started on a shoestring budget.
• No inventory to stock (unless it’s books, cds, dvds etc…)
• Creating and marketing information you’re passionate about is fun and interesting.
• Easy to reuse and repurpose.
• Can be done anywhere.
• Get’s outdated from time-to-time but doesn’t really go bad.
• Profit margins can be very high.
• Limited supply chain issues (depending on what information you sell and how you sell it).

Selling and Marketing Information Cons:

• Requires a finely tuned marketing machine and high degree of organization.
• Tricky to position.
• Value not always apparent.
• Establishing credibility in the market takes time (not always).
• Strategy can be complicated and difficult to orchestrate.
• Easy to isolate because you can work from home.

Selling Services Pros:

• Good margins
• Rewarding helping people and providing valuable services.
• Good opportunities for social interaction and conversation.
• Skill or knowledge dependent mostly.
• Can be lucrative and offer a good deal of freedom.
• Easy when you know what your doing.

Selling Services Cons:

• Difficult clients.
• Depending on the service, offer, etc… courting prospects can take months or years.
• Negotiations can be complicated.
• Getting cash out of clients can be a headache.
• Depending on the service more opportunity for legal problems.
• Long term relationships can be emotionally draining.

Everyone is going to have different things he or she feels are pros and cons. I realize the above are simplified and dependent on a host of factors. Still, I am inventorying these as much for my own sake as anyone reading this. That’s my take on things.

In the next post we’ll dive into some more juicy tactical internet marketing goodies. Until then - cheers.

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