Sounds like a great concept. But 35% of markup is too high. Margins for hardware goods are low enough already. Then you take 35% of that. I think you'll end up with a bunch of overpriced items with inventors struggling to make a profit.
I can see why you might think 35% is high. Compared to Kickstarter or Esty who only charge ~5%, we do take a larger percentage. But at the same time, we are not just a platform like they are. We are actually a retailer, and we take care of payment processing and fulfillment to consumers. Most retailers charge 50% of the retail price for these services (which cost real money).
Though Kickstarer only takes 5%, you pay another ~5% in payment processing fees, and then you must set up and pay for fulfillment yourself, which is time consuming and expensive! We think it is inefficient that every Kickstarter or Etsy creator has to come up with a solution on their own, often at a large expense. We want the creator to focus as much as possible on building the best product they can, not on fulfillment, website, video, PR, etc etc.
I understand where you're coming from, but I would argue that your true value add is discoverability or customer acquisition.
Payment processing can be added easily to any customer-facing website. One-time product fulfillment for any number of customers, for completed products all located at one place isn't too hard. Yes, packaging is a challenge, but there are dedicated e-fulfillment services like Shipwire that don't cost so much.
Assuming I have a product that I would like to sell for $100, after accounting for payment processing and order fulfillment (let's say at 3% and 5% respectively), that leaves around 27% for customer acquisition. So I have to decide if paying more than $25 to acquire each customer is worth it. If we're talking about Costco, Amazon, Walmart, maybe. Some inventors would give their first born to get on a Costco or Walmart shelf, probably for good reason too. I don't think Swish offers the same value proposition, at least not yet.
If you're going through mainstream distribution, even at large volumes, at least 30-35% between the retailer and distributor is expected for electronics. More for other classes of goods. If the value proposition is really to handle distribution and fulfillment 35% could be attractive to small businesses that are below volumes for mainstream distribution.
I guess it depends on the industry, but in my experience in homewares, 35% is not high at all. 35% is about what a normal online retailer would aim for.
From a manufacturers perspective, it is great to sell through places like this because it allows you to assess demand before investing cash in a product.
