Thursday, October 27, 2011

Downtown Donut 10-25-11

Tuesday, we managed to sell ~120 donuts between the Courthouse and 5 Points.  We started at the Courthouse: it turns out that most of the foot traffic going to and from the Courthouse and the Durham County Government building are concentrated solely on completing their business.  Folks didn't have time or interest to buy (or even sample) a gourmet sliding-scale hand-cut donut.  We probably sold about 30 donuts in 1.5 hours.

Back at 5 Points, things picked up, but we still did not reach our goal of 200 donuts (which would indicate signals for sustained profitability and expansion).  I am not sure when we will try to continue this experiment.
Lessons Learned:

Non-event street selling is tough.  If you are selling hot dogs solo, you can sell 50 at $2.25 each and take home a decent daily wage (given that a hot dog costs 15-30 cents).  Selling a lower revenue, lower-margin item like a hand-cut donut is a different model/proposition.

Location and context are important for selling generally.  Toast does great because it has a great product, but also because it has a warm interior that comforts classy taste.  It also has 50 seats. People don't expect gourmet from a stand.  You need to connect the right audience to the right product in the right location.  This is part of the reason why we do so well at the Farmer's Market.

If you are there every day, you have a better shot a profitability.  Because SZ works another part-time job, Tuesday was his day to dedicate to donuts (I work a 9-5 during the week).  We thought that if we could sell 200 in one day, maybe we could expand the number of days we were out there (and he could cut back his hours at his other job).  SZ couldn't risk quitting his other job simply to try selling donuts full-time for a couple of weeks.

The product isn't everything.  New entrepreneurs generally assume that if that have a great product, the public will scoop it up in big handfuls no matter the distribution method.  Not so.  More thought and care is needed for the distribution, marketing, and context for the product.  I think the only service that can afford to sell bare bones well is Craigslist, and they are a holdover from the Web 1.0 era.

No comments:

Post a Comment