Thank You My Friends


I am grateful that I have joined and participated on the social blogs such Facebook and Kompasiana. I have virtually met people and exchanged our ideas about anything.

Even though we have not met in our real life, I can learn what they like and dislike. I can ask for their opinion or assistance. It is like there is no distance among us as being friends.

I have asked my virtual friends to be volunteers for my handmade soaps and creams. Their feedbacks are precious! Their willingness to try my soaps and creams without knowing my real background is very much appreciated.

It is an honour to be trusted. Thank you very much for your help, my friends. I do love you all.

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Introduce your product


The latest update for my handmade soap on Trademe.co.nz (similar to ebay) is a challenge.

Prior to post my soap listing, I browsed the handmade soaps offered by my competitors to determine my introduction price. I chose to determine a high selling price for my soap, which is NZD 10.00, in order to understand the Trademe market response. There were only two views and my competitors started to set their selling price above mine as the result.

At the time my listing expired, Trademe offered me to re-list my soap for free. Hence, I have used the opportunity to reduce my selling price to NZD 8.00. So far, I have four views. Well it certainly is better than the last time. We’ll see how it goes.

If none will bid for that price, I will not reduce my selling price. Instead of lowering my price for that soap, I might list a different soap to suit the potential demand on Trademe.

The good news is my friend loves my facial soap. She contacted me to purchase the soap. I was so happy to get a first customer. I think her willingness to buy my soap is her appreciation for the quality of my product. I am optimist that I will sell more facial soaps in the future.

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In terms of sending my lotion and soap to Indonesia, I had a problem with the Indonesian custom that considered my parcel as for a commercial purpose. I asked them to provide me the related regulation but so far they referred me to the regulation for commercial purposes only. Thus, I did not want to comply with those regulations, as my parcel is non-commercial (or gift parcel). The Indonesian custom owns my parcel now. Well it was sunk cost.

That incident showed me that no matter how much I learned taxation to understand the difference between the intention to send a gift and the intention to sell product nor that I have read the related Indonesian regulation in regard to sending samples, there might be an external factor to be a barrier in the future.

In concluding my writing, I think there are many ways to introduce your product to your target markets. What you need is to understand how to penetrate the market and the customer buying behaviour. I think the marketing textbooks can be basic information for you to explore. However, the ability to understand your target market challenges is the most useful tool to sell your product.


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Sunk Cost


It takes me months to write the second article about my soap and lotion projects, my apology. However, all my articles will be written based on my own experience.

This time, I want to discuss about sunk cost because this cost is essential in initiating a small business/project and an important aspect in the decision-making process.

According to http://accountingdictionary.org/dictionary/sunk-cost/, sunk cost is defined as a cost that was incurred in the past and which cannot be changed and so is not relevant for future decision-making.

In the earliest stage of soap and lotion making, I have a dilemma in determining how much sunk cost I want to spend. In other words, how much I was willing to spend to buy equipment, variable costs such as oils and attending workshops for my projects. What benefit I would receive for sacrificing my funds? It took me ages to consider sunk cost because of the other opportunities that I had to forgo. For examples: to save my funds in the bank and receive interest, or to buy nice clothes while NZD is overvalued, or to voluntarily repay my student loan.

However, I have made a decision about sunk cost because I need a standard/benchmark for the quality of my products. I have categorised my sunk cost into three categories. The first category is knowledge such as books and workshops. The second category is equipment and variable costs. The third category is distribution and promotion.

The first category is easy. I need to select what books I want to buy, what workshops I want to attend. I can estimate the related costs and make a plan to fund those costs.

The second category is a bit difficult to decide, as there are so many options. Hence, I make my own rule that my decision to spend the sunk cost for this category will be based on the minimum price and durability of equipment. For the variable costs, I choose NZ and Indonesian products, as I want to make a small contribution to those countries.

The third category is the most difficult thing to estimate, as it involves the weight of final products to be sent and the possibility to repeat the shipment. I have sent my first soap samples to Indonesia and there was a problem, the soap samples experienced an oxidation that made them smell strangely. Hence, I make another experiment to test the oxidation process during delivery. I need to do this because I have to make the facial soap by myself until I can convince myself that my facial soaps can be produced in Indonesia to minimise the production cost.

It will be a long process to find out the result of my sunk cost. The good news is that I will test the NZ handmade soap market through Trademe.co.nz prior to the Christmas season. I can do this because I have positive feedback from my NZ friends who have tried my soap samples. Thus, the related sunk cost for the third category in NZ will be the placement fee on Trademe. I will let you know how it goes.


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The Power of Information


In this article, I want to highlight the important role of information in decision-making process.

When I confirmed myself that I wanted to create my own soaps and lotions, I started to collect information through some websites, books and workshops. In gaining an understanding of how to make soap bars, I preferred Youtube to help me to visualise the related process difficulty and technique.

Then, I bought some books to get the basic knowledge of soap making. Those books provided me information about the ingredients, equipment, safety issues etc. Next, I attended related workshop to directly observe the process of soap making method.

As chemical ingredient such as sodium hydroxide is used to make soaps, I need to search information about health and safety. I learn the character of ingredients such as oils, whether they are irritant to skin or not. What chemical-resistant equipment should be used? Where to find the suppliers? Are they applying environmental sustainable concept or not? etc.

All information that I have collected, are essential but they are raw. I need to apply my accounting, financial and marketing knowledge to make soap bars. There are some considerations to create my own soap recipes. These considerations include costs of ingredients and equipment, how to finance my soap experiments and who my target customers are. I think it will be better to discuss them in different articles.

The point is that you need to consider some information before you make a decision.


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