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.
Key stats
Startup Costs
| Min Startup Costs | Max Startup Costs | |
|---|---|---|
| Office Space Expenses | $0 | $7,000 |
| Employee & Freelancer Expenses | $151 | $352 |
| Website Costs | $223 | $7,215 |
| Business Formation Fees | $600 | $4,700 |
| Equipment & Supply Expenses | $63 | $200 |
| Retail Business Expenses | $1,250 | $11,650 |
| Inventory Expenses | $350 | $14,750 |
| Advertising & Marketing Costs | $75 | $4,786 |
| Software Expenses | $150 | $2,420 |
| Total Startup Costs | $2,862 | $53,073 |
Successful Businesses
| Business | URL | Rank | |
|---|---|---|---|
|
Simply Straws | simplystraws.com | #174,003 |
|
FinalStraw | final.co | #207,499 |
|
New York Replacement Parts | nyrpcorp.com | #443,390 |
|
Isle of Man Ferries | steam-packet.com | #466,512 |
|
Strawberry Park Hot Springs | strawberryhotsprings.com | #484,826 |
|
The Strawhecker Group | thestrawgroup.com | #496,358 |
|
Sugarboo & Co. | sugarbooandco.com | #565,564 |
|
The Official Bailey® Hats Store | baileyhats.com | #579,686 |
|
Conner Hats | connerhats.com | #592,353 |
|
Two's Company | twoscompany.com | #593,177 |
|
Jungle Straws | junglestraws.com | #704,546 |
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
Affiliate marketing is a great way to bring in a new revenue stream, especially when you don't sell products or services.
Simply put, an affiliate program is an agreement where a business pays another business or influencer ("the affiliate") a commission for sending traffic and/or sales their way.
The affiliate typically gets a unique link where clicks and conversions can be tracked.
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2
Word of mouth
Word of mouth is when a consumers reflects their interest in a company’s product or service in their daily dialogues.
Therefore, word of mouth advertising is essentially a free advertising triggered by the customers experience.
According to Nielsen, 92% of people trust recommendations from friends and family.
Therefore, in today’s hyper-connected world, a single recommendation through a word of mouth can have a huge impact to your business.
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3
Social Media Advertising
Social media advertising is the use of social media platforms to connect with your audience with the objective to build your brand, increase sales, and drive website traffic.
According to Oberlo, approximately 48% of the global population use social media, and the number is ever-growing.
Therefore, social media allows brands access to cost-effective advertising by enabling them to interact with a large audience.
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