Last week I wrote about using CafePress for Passive Income. I wanted to share a few things I’ve learned that can help keep your sales on track. These are written as they apply directly to CafePress, but you could interpret them for really anything you’re selling online.

Inside Jokes Don’t Sell
While it could be fun to make up a shirt using a catchphrase from work, nobody else will get the joke, and you’ll be the only one wearing it. One-off shirts are easy to do for yourself or as gifts, and I’ve given custom shirts as gifts before. We’re looking for some income though, and unless it’s universally funny or has some other broad appeal, anything you make for personal use probably won’t cut it.

Aim Low
Look at your competition on CafePress. Some categories are chock full of poorly-made shirts that looks like they were slapped together in MS Paint. Other categories may have fewer shirts, but you can tell they were put together by someone thinking about what they were doing. It’s better to set yourself up as the only option for a good shirt on a particular topic, than as one of a few good options for another topic.

If you drop a few killer shirts into a sea of mediocrity, you’re really going to stand out. We’re not here to make The Best Shirt of All Time™, just a few good shirts that can make some money. If you’re going to actively manage your tshirt sales day to day, then you have the time to take on some of the competition that you’ll see with better designs and categories. If you’re looking for minimal upkeep, you can maximize your chances of making a sale by minimizing your competition.

Do Your Research
What’s popular on CafePress right now? What’s popular in the media? Search through your prospective categories and see what kind of shirts other people are making, and more importantly, buying. Search for your prospective keywords and see what comes up. Those are the shirts you’ll be sitting next to. Would yours pop out? Check out other apparel sites and see what’s “in” right now. Vintage designs? Smartass slogans? When I made my shirt, poker was an extremely popular niche. Tournaments were featured on television on at least a handful of channels, and CafePress was full of crappy poker shirts that were easy to try to outshine.

Do What You Know
While your research may tell you what’s popular, it’s not always the best idea to jump on the hottest idea right now. There’s a lot of competition at the top, for one. More importantly though, you should choose a niche that you’re familiar and comfortable with. Nobody will buy a poker shirt from someone who makes it obvious they’re not a poker player. You’ll also come up with dozens more ideas for designs when it’s something you’re at least mildly interested in. You are your own audience, and you know what a poker player (for example) would be looking for in a shirt. It’s better to be the best person for the #3 or #4 niche than to be an also-ran for a popular topic.

Of course, that being said, don’t do anything so ‘out there’ that you’re limiting your audience. Underwater basket weaving, while it may be fascinating, and may be something you know a lot about, won’t have the draw that some other categories might have.

Be Careful with Time-Sensitive Designs
Halloween shirts are only going to sell in October. Christmas apparel is only going to sell after Thansksgiving. Presidential candidate shirts aren’t good for anything after Election Day. If you’re going to offer something seasonal or time-sensitive, stay on top of it. Get ready to take your designs down after the big day has gone by, and have your next design ready to go up ahead of time. It looks crappy and unkept to still have your Christmas shirts up in February. Keep in mind that time-sensitive designs require the maintenance mentioned above. Choosing something timeless lets you keep it up year-round, minimizing upkeep and broadening appeal.

Don’t Infringe Copyright
After Napoleon Dynamite came out, CafePress had to spend a bunch of time taking down Vote for Pedro shirts and slapping all the infringing shopkeepers on the wrist. Keep away from designs you’ve seen before on shirts, hats, bumper stickers, anywhere. If you didn’t think of it, think twice before trying to profit from it: you can get yourself shut down pretty quickly. Popular quotes from movies and TV shows that have entered the realm of pop culture (Pulp Fiction comes to mind) are a sort of grey area. It’s probably not right, but a lot of people get away with it.

Play the Margin Game
On CafePress, they set a base price for every item you want to put your design on, and you decide how much to mark the item up. When the item sells, you keep the markup and they keep the base. A regular white t-shirt is $13.99 at base price. If you price the white t-shirt at $16.99, you stand to make $3 on every sale.

A value t-shirt, which is similar, but thinner and lighter, is $8.99 at base price. Try putting the same design on the value t-shirt, and price it at $14.99. You stand to make $6 on every sale of a value t-shirt. There’s nothing deceptive about this, as the site labels each shirt for what it is, and clicking on either shirt will tell the shopper details about the shirt’s construction. Place a value t-shirt next to a regular t-shirt with the value t-shirt priced cheaper, and the shopper will choose the cheaper (but higher margin) item most of the time.

I thought it would be nice to sort of detail what I’ve done with Brad Kelly Enterprises since starting the company this past July. This will give you a better idea of where I’m coming from…it’s always nice to have the backstory, right?

The initial goal of Brad Kelly Enterprises when I filed the necessary papers with the state of Michigan was to separate eBay consignment (which I was already doing on a small scale) from my personal finances. Once you’re selling with some level of frequency and volume, it’s difficult to do your taxes and tell them it’s still just a hobby. I’m also fairly close to moving from one tax bracket to another as well. A few thousand dollars of extra income this year would be enough to push me into a fairly sizeable tax increase.

I’ve since moved away from small-scale consignment for individuals and turned my attention toward companies looking to clear out old merchandise. I still do some consignment for individuals, but really just friends and family. The advantages of dealing B2B merit their own post, and are outside the scope of this article; but it would suffice to say that it was a good move. This has allowed me to become a silver-level Powerseller in just a few months, and has comprised the bulk of BKE’s income to date.

While it is “active income,” that is, it requires a considerable amount of ongoing work, it can still be a fairly reliable way to generate some funds without much costs, either up front or ongoing. Currently, I’m just stockpiling that money in a high-yield account. Should I need it for any startup or project going forward, it’s there. By keeping it in the business, there’s no temptation to personally spend it (and have it count as income for me). That’s about where I’m at right now. If you’ve got any questions, please feel free to ask, as I’m sure I’ve glossed over a few details. Where do we go from here? I’ll cover that a little later.

Here’s an idea for the graphically-inclined out there. If you’re not a Photoshop whiz, fear not: the rest of us can get in on the action too.

A tshirt can say anything. It can be political, it can be funny, or it can tell total strangers which summer camp you volunteered at last year. Here’s an idea though that’s not very new, but still worth a second look. Doctor up a couple original designs with your favorite graphics program and put them online. With a good design and the right keyword choices, even an unpromoted shirt can make money.

In December 2005 I had discovered CafePress and gave it a spin. I was really into poker at the time, so I spent some time putting together a fairly simple design that I would wear myself. That’s a pretty important benchmark I think, to ensure quality. If you wouldn’t wear your shirt out in front of your friends without telling them you made it, don’t expect anyone else to do the same.I uploaded my design and customized my “store” a little bit with descriptions and graphics. I set my prices, and through no conscious decision, didn’t return for the better part of a year. I simply forgot about it entirely. It wasn’t until I received an email from CafePress telling me that I had hit their $25 payout minimum, and they didn’t know where to send the money. Needless to say, that got my attention.I logged in and found I had sold, on average, one to two shirts per month for the entire year. That’s not much, but that’s ZERO promotion. All I did was make a good, clean design and tag it with as many relevent (no, I did not spamdex CafePress) keywords as it would allow. The shirt showed up every time someone was looking for anything related to poker. There are people out there making their living from CafePress, and I can see how.

What if I had made dozens of designs on par with that one and spent more than an afternoon figuring out what made CafePress tick? I am certain that with good promotion and placement, any good design could generate some income. Constant promotion is active income though, so keep that in mind. An ongoing commitment would be required to milk any useful level of money out of this system, but a trickle CAN be generated passively.

The inspiration for this post stemmed purely from the almost-daily emails I’ve been receiving from CafePress notifying me of new sales for the last two weeks. Christmas shopping, no doubt.

Even a moderately-inept investor could tell you that diversification is important. They won’t tell you, however, that it’s just as important to diversify where you GET your money, as it is to diversify where you PUT your money.

The concept of diversification is simple. By spreading your money around, the chances that any one event could totally take you out of the game are reduced. You can learn more about the diversification as a risk-reduction strategy with Investopedia’s article on Diversification. The old standby, Wikipedia, also has a much friendlier article on diversification.

We’re told not to “put all our eggs in one basket,” but that’s what we do everyday. Where does your money come from? If you’re like most people, you get up and work for someone else everyday. In exchange for your time and your energy, you have a stream of money gushing (or trickling) toward you in the form of a paycheck. If someone turns off the flow, you could be SOL and unable to make your rent payments. It’s rarely your hand on the spigot, either.

Let’s apply the concept of diversification to income now. Let’s say that in addition to your job, you find a few other ways to make some extra money. Maybe you’re turning in scrap metal, maybe you’re running a website about Furbys. Maybe you’re spending your weekends on eBay. Your income is spread around a bit more. One person can’t come along and kick you off the gravy train. If you lose your job, you might lose 50% of your monthly income. That still hurts, but it hurts a lot less than losing 100% of your monthly income.

The same idea applies to the any source of income though. If you run out of stuff to sell on eBay, the lights won’t go out–you just might eat out a little less. If interest in Furbys drops (I can’t imagine how that could happen) you’re not left out in the cold either.

The bottom line is that if you make all your money from a day job, someone else controls your livelihood. You’re betting everything that you won’t lose that job, essentially. What could be riskier than that? Take charge and build your own safety net. Who knows, side money can become big money.

I can’t say it’s finished, but we’re well on our way now. Big thanks to Jared for his help with cross-browser compatibility. Jared was blogging before there were blogs, back when everything was IE4 HTML and comments were in the guestbook. This is definitely the first site I’ve done that looks better in Firefox than it does in Internet Explorer.

I haven’t really blogged (or had much of a web presence at all, for that matter) for quite a while, but a lot has changed. We’ll probably see some cosmetic and functional changes around here as I work on things. Your patience is, of course, appreciated as I work to get things rolling.

I’ve become a big fan of the “get it out there and tweak it” mentality as of late. In the past I’ve developed ideas for the web on a long dev cycle, with dozens of reworks and trying to be all things on launch day. In some cases, launch day never comes, because I’ve grown too tired and discouraged spending such an enormous amount of time on something with such little return. I’ve realized recently (yeah, I know, welcome to the party, right?) though that the internet has really become a place where it’s a lot more rewarding and indeed a lot simpler to just launch something barebones. It’s a place where you can try an idea cheaply; proof of concept doesn’t cost much around here.

In June, I bought my first place. I had family living with me for some time, but I’m now on my own. I’ve always managed my money carefully, and personal finance has always been an interest of mine. It’s become apparent though just how important those skills are in the last several months. You can only do so much with so much though. I’m happy with work, but buying a house a little before I initially planned to did take away a bit of my buffer zone. The percentage of what I make that is already spoken for, while managable, is higher than I’d like of course. I’ve also become a firm believer in income diversification. If you can’t decrease your expenses below a certain floor level, you just need to make more money.

Enter Brad Kelly Enterprises. I started BKE in July as an umbrella of sorts for all my side projects. You’ll hear me talk about BKE quite a bit I’m sure. I’ve had some success so far, and will likely detail that in the future. Suffice it to say though, that I enjoy what I’m doing and would like to do it all the time. As a quasi-serious goal, I’d like to be making enough through BKE by the end of 2008 that working my office job becomes optional.

Would I really quit a great job to do this all the time? I’ll cross the bridge when I come to it. I think a goal like that’s necessary though. Without it, generating additional income streams becomes just another project I can put on the shelf. I need a deadline to get my butt in gear! Regardless of what happens, this blog will document my progress between now and then.