I was working on the other side of the road with this guy. Actually my friend introduced me with him.
He has a genius business strategy – his products are very specific. Some sort of chemical washing machines as I used to call it.
He has a big margin on them and he works with government institutions which do public purchases and announce a contest. If the company wins the contest – then that company has a deal.
Government institutions like schools, colleges, universities, laboratories and other institutions.
I can assure you – his business departament does only one sale per year and some minor sales which do not make a lot of income.
And with that one sale, his company is able to live for one year.
So when thinking about cheap products and small margin – you’d had to have a high volume of sales, but with high margin sales – you could do only one sale and live of it one year.
You could sell an airplane. And live of the sale for few years.
When selling low volume and high margin products. You need to be very specific with your products. It’s not computers you’re selling but instead something very specific that only you know.
By selling specific products we have less and less competition, but selling specific equipment to laboratories requires having a specific knowledge. Selling specific items can make you a monopolist in the market.
Personally I think that guy is a genius, but as a businessman he’s very lame because his products always are late and he’s doing very lame business. Due to delays.
But he has his market which can’t live without his products.
And it’s been 20 years he’s doing this business by selling rare and specific items.
One sale and he’s done his job for one year.
How cool is that?
Remember that you need high margins if you’re going to make one sale per year. It’s not enough to sell one t-shirt, but if we’re talking about half a million sale, you sure could add 200000€ margin.
All you need is one sale to have money.