S
Starter Story
Business Idea
Start A Straw Company
About
Starting a straw company requires a great deal of effort, dedication, and most importantly passion.
If you're interested in how to sell straw, or selling straw online, you can use this page as a guide for everything you'll need to know.
Want to learn more? You can check out our full guide on how to start a straw company ➜
Key stats
market size
$11.4B
starting costs
$32.9K
gross margin
35%
avg product price
$1
time to build
9 months
work from home?
Yes
Startup Costs
| Min Startup Costs | Max Startup Costs | |
|---|---|---|
| Office Space Expenses | $35 | $3,250 |
| Employee & Freelancer Expenses | $0 | $5,500 |
| Equipment & Supply Expenses | $525 | $5,500 |
| Website Costs | $232 | $6,500 |
| Business Formation Fees | $600 | $4,700 |
| Retail Business Expenses | $0 | $16,150 |
| Inventory Expenses | $350 | $14,750 |
| Advertising & Marketing Costs | $75 | $4,786 |
| Software Expenses | $150 | $2,420 |
| Other Expenses | $0 | $300 |
| Total Startup Costs | $1,967 | $63,856 |
Successful Businesses
| Business | URL | Rank | |
|---|---|---|---|
|
Straw Poll | strawpoll.me | #14,942 |
|
Dr. Dabber | drdabber.com | #79,745 |
|
HAY | hay.com | #80,999 |
|
LifeStraw Water Filters & Purifiers | lifestraw.com | #170,794 |
|
Simply Straws | simplystraws.com | #174,003 |
|
Lack of Color | lackofcolor.com | #181,455 |
|
FinalStraw | final.co | #207,499 |
|
The Standard Newspaper | standard.gm | #227,697 |
|
|
Orscheln Farm and Home | orschelnfarmhome.com | #275,117 |
|
B. Braun Medical Inc. | bbraunusa.com | #345,027 |
|
Imperial Headwear | imperialsports.com | #352,886 |
Pros & Cons
| Pros | Description |
|---|---|
| Flexibility | You can put as much time into the business as you'd like. If you like the work and have some initial experience, you can start small and manage all aspects of the business on your own. |
| Meaningful business connections | You never know who you will meet as a straw company. This could be the start of an incredible business opportunity! |
| High customer retention rates | Once a customer invests in your product, they've invested their time and energy to utilize your product/service which is highly valuable to them. Typically, your product or service becomes indispensable to your customer. |
| Easy to encourage "impulse buy" | In the straw company, you have a much higher chance of encouraging your customers to buy on impulse - you can easily alter the price, placement, packaging, and promotional value to influence the decision of your buyer. |
| Control of workload | With starting a straw company, you have the unique ability to choose how little or how much you want to work. You also have the freedom to decide which projects you want to work on, and can turn down the ones that do not interest you. |
| Unlimited income potential | With starting a straw company there is no cap as to how much income you can make. The stronger your business skills and the more energy/time you put into your career, the more you'll make. |
| Cons | Description |
|---|---|
| Motivation of employees | If you plan to have a sales/content team on board, finding creative ways to motivate them can be a challenge. It's important that you're able to offer great incentives and a good work environment for your employees. |
| Low margins | The gross margins for your straw company are typically around 35%, which can make it more challenging to incur new expenses and maintain profitability. |
| High employee turnover | In the straw company, employee turnover is often high, which can be quite costly and time consuming for your business. It's important to try and avoid this as much as possible by offering competitive pay, benefits, and a positive work environment. |
| Taxes | As a straw company, you typically pay self-employment taxes which can be quite high. It's important to understand what you will be paying in taxes each year so you can determine if the work you're taking on is worth it. |
| High overhead expenses | With starting a straw company, there are overhead expenses that come with selling a physical product. You will want to make sure you strategically budget for these overhead costs. We discuss this more in the startup costs section below. |
| You may need to charge sales tax | If you are selling your products in various states, you may be required to charge sales tax. Although this may not impact your financials specifically, it can be a headache to create a process and procedure for this. To learn more about sales tax, check out [this article](https://www.thebalancesmb.com/do-i-need-to-collect-sales-taxes-in-my-state-398913) |
Marketing Ideas
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1
Affiliate program
An affiliate program is a way to reward people outside your organization to share your product.
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2
Word of mouth
The most tried and true way to grow a straw company is through word of mouth - some entrepreneurs would say it's more important than all social media.
-
3
Advertising on social media
Social media advertising is one of the leading ways to get the word out when it comes to straw company.
There are various different Social Media platforms available to you. Some may be more critical for your marketing efforts than others, however, it's important to have an understanding of what's out there and available to you.
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