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The 80/20 Rule

January 12th, 2009 · No Comments

In my eternal quest to become fully self-employed, I’m always looking for ways to be more efficient. To get more done in less time without sacrificing quality. I ordered a couple of business books from Amazon yesterday and while reading the reviews on them I saw a lot of talk about Pareto’s Principle, also known as the 80/20 rule. If you’re not familiar with this, it is the idea that 80% of wealth is owned by 20% of people. Or if you are a business owner with employees, 20% of your employees will bring in 80% of your sales (and another 20% percent of your staff will cause 80% of your problems).

I started thinking about how I could apply this to my own business. I had a thought, so I jumped over to my Cafepress account and ran a product report for the past three months. My hunch was correct. It turns out that in the past three months, t-shirts and sweatshirts have accounted for 70% of my sales, while items such as buttons, stickers, journals, pillows, tiles and magnets make up the remaining 30%. I always seem to have more sales on the non-apparel stuff during the Christmas season, so I estimate that if I went back through the whole year and looked at the types of items sold, it would be closer to 80% apparel and 20% non-apparel.

I put up a new section last week and included almost every single product. I’m not one who makes a single image and slaps it on all the products, (do that and you might end up with one of your products on the Consumer Reports website) I make sure my images fit the product and look nice. In my image basket from the section I put up last week are 22 separate images.

One image for the light shirts

one for the dark shirts

one for the round ornament, lapel stickers and buttons

one for the rectangle magnet

one for the journal

one for the bumper stickers

one for the mugs

one for the black cap

and on and on and on…

It doesn’t take me very long to make the original t-shirt design, so I estimate I am probably spending 80% of my time creating images for products that bring in 20% of my income. So I created a new master section to see what products I could eliminate and now I have a new master section that can be completed with only 3-4 different images. One image with a transparent background that will be used for all the shirts, tile products, oval stickers and the pillow. (If the particular design is too dark for the dark shirts I will make a second lighter colored version). I then drag the t-shirt design onto the template for the large button and resize it to fit, and that image can be used for all the buttons, the round ornament and the lapel stickers. Then I make an image for the bumper sticker, and that can also be used on the mugs. And that’s about it. Much faster that my previous working time of two hours (or more) per section.

I checked my product report again and the items I eliminated made up only 6% of sales. Out of the $9000 I made in 2008, that’s only $540. I’m banking on the fact that if I use that time to make more new designs and more sections and shops, they will easily make up for the loss of that $540.

A bonus of working this way is that when I’ m feeling uncreative I can go back and add a few of the eliminated products to those old sections. That will then help update the section for seo purposes and the new images will be at the top of the marketplace (when sorted by new additions) for a while.

I put this in to practice last night and completed a new section in less than half an hour. Woohoo! And I realized that maybe this has been part of my procrastination, since each section took so long to put up it became a chore.

You may notice I’ve added in the sidebar under my earnings report a tally of how many new designs I’ve added in 2008. I decided that would be the easiest way for me to keep track, since I’m usually adding designs from two different computers. I’m hoping to set a personal record in 2009!

Tags: Business · Cafepress · Entrepreneurship

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