Hi Gordon,
Another important factor (of course) is the cost of getting that customer...
If you have a $25 report you're selling, but it costs you $30 to get each customer, then of course you're losing money...
(If you have a second product to sell them, or sell some consulting as a follow-up, then you might have a profitable business...)
For me, this is what it often boils down to. I know who the customer is, but how much is it going to cost to get him or her?
As you know, I've dealt in the area of business ideas... It can be a very expensive area to be in if you advertise directly on Google Adwords, for example. Why? Because you're directly competing with businesses like franchises... They have a $25,000, or $100,000, or $250,000 "product"... So they can afford to spend a lot more on advertising!
Of course, there are other ways, too... But they're more work...
I found a great article on the Pet Rock...
Here's a great report of an interview with Gary Dahl...
"Pet Rock mastermind doesn't want to talk about it. Much"
http://cjonline.com/stories/121299/bus_petrock.shtml
What I like about that interview is it doesn't just show the rosy side, but it shows many of the problems too... And it also talks about all the work behind the scenes.
He didn't just come up with an idea for a pet rock. He wrote a funny manual (a big selling point, I think without this, it would have failed)! He put a lot of work into the packaging, making it look like it was a real pet, with air holes, and a bed of straw in the box...!
He then took it to a gift show in San Francisco (in 1975). Gary Dahl was an advertising man, so he knew how to do press releases. He sent press releases to every major media outlet. A couple of months later, Newsweek picked up the story, and Neiman Marcus ordered 500 Pet Rocks! The story spread like crazy, and everyone was talking about it.
I read elsewhere that at one stage, he was selling 10,000 pet rocks a day! This was in the run-up to Christmas. Eventually, the fad died. It only lasted 4 months...! But he sold 1.3 million pet rocks, at just under $4 each!
So... He didn't just think of the idea of a pet rock, and that was it. The packaging, the funny manual, the presentation at a major gift show, and flooding the media with his press releases... That was all an important part of it too...
Another funny thing in the article is he mentions how people would bring him their "ingenious" new ideas... Like a pet stick. Or pet poop. Or pet gravel. Funny thing is, none of those ideas took his fancy...
Gary Dahl passed away a couple of years ago (I only just realized this now). From that article, it sounds like the Pet Rock brought him both happiness and also some pain too... Well worth a read...
Best wishes,
Dien
P.S. Here's where you can find the original Pet Rock training manual...! Quite funny...
(PDF)
http://csinvesting.org/wp-content/up...-Gary-Dahl.pdf