www.whyville.net Apr 25, 2003 Weekly Issue

Guest Writer

Business Partnering with Akbar

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For a while, I've been wanting to write an article about my experiences as a designer working in a business relationship with Akbar. You might ask what, exactly, is the nature of this relationship, and I guess, after some thought, that it resembles a business rental, except that there is no rental fee. There is also no rental contract. Instead, there is a Property Owner (P.O., that's Akbar) and a Designer Occupant (D.O., that's me, Ahdieh), who creates designs and sells them under my designated store name (in my case, "Artful Dodger").

The process works like this. To start, I choose a canvas and I pay my clams for both the design cost and the manufacturing part cost. (Be brave! No pain, no gain! That's business!) There are several wonderful explanations about the design aspects of Akbar's Mall, but since this is an article about the business side, I will merely refer you to articles by such famous designers as Grenouille. Anyway, I create a design. Since I'm a slow designer and I like a lot of detail and shading, one design typically takes me about 1.5 to 3 hours to complete, depending on its size and complexity. It has to be completed in one sitting or before the Whyville site crashes, or it will be lost. (Yes,
all that work, gone forever! Be strong! Don't whimper! You have entered the tough Business World!)

All right... When I am finished, I give the design a name and a price and submit it to Akbar, who has the right to accept it for my store or refuse it. If the part gets accepted (and this may take anywhere from about 3 days to 8 weeks), then the part is placed in my store, and is also listed under "New Arrivals" on Akbar's Mall start-up page. If the design is really, really good, it might also be listed in Akbar's "Hall of Fame" (but this is only if you are as good as Christian Dior or maybe Grenouille). If the design is not accepted, Akbar will throw away the design and return your clams with a note. Sometimes, if Akbar is feeling particularly kind and generous, he may add one or two sentences about why he rejected it. (No, you do not get it back! Stop whining!)

So, now the part appears in your wonderful store. You have arrived! You are a SOMEONE in the Whyville Business World. The first design which is accepted is a big day, because that is when you can give your store a name and move your part into it. And the fun part... people can admire it, and buy it, and pay you for your wonderful creation.

Of course, a store with one product is like an elephant with one leg! Very few people come by to view only one part, however marvelous it might be. You are now in the stage of being a "Starving Artist." How can you make a living out of your artistic talent? The answer is not easy. You have the store, and you have one product. Now you need to set up a design schedule for making more parts. Every designer needs to have interesting new things to offer and to attract people to come back again. The more wonderful things you have, the more people will come back to visit you. I try to do 1-2 per week, and I try to make them the very best quality I can.

But there is a difference between having products and getting people to buy them. In the Business World, this is called "Advertising, Promotion, and Sales." I make a point of wearing my designs myself, so that people can see something nice and ask me about it, and perhaps tell their friends. This is good because it is FREE advertising. I also take out ads in the "Whyville Times," but there is a fee for this. I tried taking out a banner ad, but I do not think this works as well. It costs money, and the return is not as good. Having a design in the "Hall of Fame" (which is free) is a wonderful boost, and I'm grateful to Akbar when that special magic happens. Having a "Brand Name Tag" is also helpful. Mine is "Artful," which is part of the name of every product (except my earliest ones), and that makes it easier for people to find them.

There is also the issue of pricing. Every designer has to face this. If you are famous, you can charge more; if you are a poor, starving artist, you may have to charge less until you become known. But this is Business! So perhaps you take the position that you will have some parts priced very low because you have not put much time in them or because your skills have improved and they are no longer your best work. You can declare a "Sale!" at any time, and you can have some products priced attractively -- what the retail world calls a "Loss Leader". Perhaps you decide that your design time is worth money, so you price the product based on what it costs to produce, plus X clams for your time.

It is important to remember, though, that the manufacturing cost and the up-front production cost and design time are invested in the product only once. The advertising and overhead time to manage your store go on all the time. You can charge a price which covers your production costs on the first sales, let's say 380 clams and any sale beyond that will be pure profit. But that is a high price that the more poor Whyville citizens cannot afford.

So if you think you can sell 20 parts, you might want to spread the start-up investment evenly over the first 20 parts or so, and after that, will be cheaper production costs. In business, this is called the "Break-Even" point, so that later parts cost much less, and your profit margin will start to build up.

For people who like mathematics, you can even develop a simple Whyville formula for this:

Example of a Pricing Formula:

ManufacturingCost/20 + ProductionCost/20 + DesignTime/20 + Advertising + OverHead = MyPrice

Or to state it more simply:
((MC + PC + DT)/20) + AD + OH = MP
((50 + 200 + 120)/20) + 5 + 5 = MP
2.5 + 10 + 6 + 5 + 5 = 28.5 (rounded up) = 30 clams for this example part

Of course, none of my parts have achieved this advantage as yet, because I think that I'm still developing my skills. But in business, it is always good to have a goal (smile :-)).

One other factor is Akbar himself. He can, at times, be an unpredictable partner. He is often sick for lengthy periods of time. He also sometimes makes whimsical demands upon his design partners. One day with no prior notice, for example, he may change his mind about how product files should be labeled or decide that no shirt can be longer than a short torso or that flesh, especially on the hands, must have a dark brown outline. This can be a abrupt surprise to the designer when he receives ALL his designs back saying that they no longer meet Akbar's criteria. But -- hey -- it's Business, right?

It's been interesting to be a partner with Akbar, and I value the experience. It has given me the chance to have a store, to produce products, to be paid for my work, and to learn about the dynamics of the World of Business!

Thanks, Akbar!


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