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MenuWhat is the best way to get a physical product to market in 2014?
I have read the "one simple idea" by Stephen Key wich emphazise licensing, but was wondering if anyone got some more resources or insights on how to approach this..
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I've been in ecommerce for over a decade and have co-founded and helped start companies collectively driving over $10MM in ecommerce sales. I've consulted for Fortune 500 ecommerce stores. Here's my advice if you're just getting started without a big budget.
Note: Some of this is copied from my answer to a similar question.
#1) PROVE THE ASSUMPTION: Start with a dropshipper's existing products to figure out what sells best before you spend money on manufacturing and warehousing. Amazon is perfect for this - they will pay you 4%-10% to promote 253,000,000 products (http://bit.ly/1q2M85R) - you can sign up at https://affiliate-program.amazon.com/ Alternately, get very small amounts of the product (maybe even just buy some from a competitor) and try selling them on ebay and amazon. Nothing hurts more than having $50,000 of imported product gathering dust in your fulfillment warehouse while listening to a voicemail from a debt collector.
#2) SOURCING
There are several options here. Many people prefer Alibaba.com. Warning - if you use Alibaba, you are stepping into a tank of pirahnas. There are more scam "manufacturers" on Alibaba than real ones. Use Escrow or AliSecure Pay if you buy. If the supplier says they only take T/T, Western Union, Moneygram - just say no! I prefer American Made when possible. If you're like me, try Ariba's Discovery Service - http://bit.ly/1q2NFZu - which will allow you to find suppliers with a physical presence in the USA. Note: Many things can be made on demand (someone purchases, one gets made and shipped) instead of in 500+ manufacturing runs. Start there if you can - Books on CreateSpace.com, Clothes on CafePress.com, Playing Cards on MakePlayingCards.com, etc - to test out your exact product. If you decide to source by purchasing product in bulk, find a fulfillment company to store and fulfill (ship) your orders. Amazon does this - http://services.amazon.com/content/fulfillment-by-amazon.htm - but they might decide to crush you like a bug if you're successful (http://bit.ly/1q2V7DX). Other fulfillment companies for e-commerce include http://www.shipwire.com/ and http://www.webgistix.com/
#3) LAUNCH YOUR SITE
This is an entire topic in itself. One of the fastest ways I know for newbies to start in e-commerce is with a SquareSpace.com store. Other options include GoDaddy.com and BigCommerce.com. If you can stand to use the templates they provide instead of trying to customize them, you'll save yourself a lot of hassle and expense - customization usually looks terrible unless a designer/coder was hired to do the work. If you do customize, find someone on odesk.com or elance.com. If you're not hard up for money, just build a custom store from the start. If you can't do that, save up some money and then go for it. Focus on increasing conversion rate - for every 100 visitors, get 1 to buy. Then 2. Then 4. Then 8 (8%).
#4) MARKET
Figure out where your competition is advertising. Are they getting free, "organic" SEO results on Google? Using social media to drive billions of dollars of sales? (NOTE: That was a joke - don't count on social media as the nucleus of your marketing campaign. Please!) Are they paying for Google ads ("PPC"), buying email lists, using strategic partnerships for promotion, relying on shopping portals, using banner advertising, or something else entirely? There's probably a good reason - figure out what it will take to play in those waters. At the same time, try to find a small enough niche that you can win in it.
#5) BEWARE
Be careful about artsy things. If someone is attracted to something artistic, it's usually because there is a story behind the art for them, or because it's cheap. If you're going to try to sell artistic things, you may want to consider doing some serious research first about who has been successful in that area. Look at etsy.com to see handmade artsy items (very cool).
#6) WORTH A LOOK
Worth checking out as you start your journey: Art.com, yessy.com, Artfire.com, ArtPal.com
#7) DEEP FOUNDATION
If you need help, reach out for a 15 minute call and we'll discuss a go-to-market strategy specific to your goals.
Test, test, test. Use adwords, FB ads, LinkedIn ads. Make sure there is a demand and the rest will be easy.
Don't stop taking massive action.
Best of Luck,
Michael T. Irvin
michaelirvin.net
My books are available exclusively through Amazon Books. Check out my book "Copywriting Blackbook of Secrets"
Copywriting, Startups, Internet Entrepreneur, Online Marketing, Making Money
This is assuming you already have a physical product created or are planning to create your own unique product. If you're simply reselling another product the answer would be slightly different.
Validate your assumptions by getting your product into a potential buyers hands as soon as possible. Any product feedback you can gain early on will save you massive amounts of time and money in production as changes come about.
If you can do small batches - this might sound counter intuitive and be slightly more expensive but produce a small batch and get it into a market like Amazon or a market relevant to your audience. Having this small batch will allow you to gain invaluable product packaging feedback, product variation and size/quantity feedback, etc. All of that learning you can then apply to a larger batch and not be stuck with lots of unwanted packing, sizes, or quantities.
Determine your growth engine and maximize it to get direct feedback from your customers early on.
Spend time with your initial customers listening to what they are really saying and do not be afraid to make a pivot - it's more important to solve the customers real problem than to launch your own good idea - the former is something you can build a business on.
Look to make relationships with industry influencers and leaders in your segment - doesn't always work but if you can get an influencer to support your product that is an excellent way to gain early traction. Before asking them to partner or recommend your product be sure to get their industry feedback and perspective it might be some of the best advice you get.
Related Questions
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How do you decide on which country to have the jurisdiction in when licensing software to international companies?
I'm not an expert on German law, so please take everything with a grain of salt. This is never an easy issue because there aren't many persuasive arguments on either side. What usually ends up happening is that the parties defer to a neutral jurisdiction, typically New York law/New York courts or English Law/London courts. The reason being that most major companies worldwide usually have some nexus to either New York or London, so it's something they can agree to. Your best argument for requesting US law is that you are a US company, and the fact that most German companies are still sometimes subject to US law. (Many online companies offer only US terms and conditions, so German companies just have to agree to it sometimes.) I would avoid at all costs agreeing to German law or jurisdiction. Civil law (Europe) is very different than common law (England, US, Canada, Australia etc.) both in terms of the law and procedures. If they won't agree to New York, then push England. If that fails, then delete the governing law provision altogether and you can fight it out if and when a situation in which matters arises. To answer your second question, if you agree to German law and a judgment is rendered against you: (1) having a German judgment against you if you don't have any assets in Germany is a bit useless, as there is nothing to seize if you refuse to pay. They can seek to have the judgment recognized in US courts. This is an expensive process and most companies won't go through the effort because effectively they have to relitigate the matter in the US to get the enforcement order. However, they can do so if they are so inclined. (2) If a judgment is rendered against your company, then my presumption is that as a director or officer, you can encounter issues in Germany if you ever try to enter. This is where I'm least knowledgeable but I'd guess that if a judgement of a court is ignored, then eventually the directors and officers can be subject to criminal proceedings for contempt. If that happens, you could be arrested in Germany if you ever try to enter. I'm just guessing at that last part, but you don't want to go down that road, even if I'm entirely wrong. RonanRonan LevyRL
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I have an idea for a phone accessory, do I need prototypes before trying to find a Chinese manufacturer?
I want to begin by assuring you I don't want to rain on your parade. Now... Ideas are a dime a dozen. Execution is what is critical, and hardly anyone does execution well. NDAs are nice but they won't protect your idea from being ripped off in the medium term at the latest, if it's a winner. Your best protection is that execution thing...people sure like to talk, but they don't like to Do. Do NOT have your prototype made in China. It will take months in shipping back and forth, misunderstandings, finding the right manufacturer, and other difficulties. Do not embroil yourself in that mess. Absolutely you should get a prototype made first. Will it cost you 10-100X what the final version will cost? Of course. Do you need something to show investors, suppliers, channel partners, retail outlets? Yes. All a patent does is protect your idea for awhile from being duplicated in the exact way you are executing it. I can't go make a sticky-note that uses a strip of lightweight glue to hold the paper onto something. 3M has that patent. But I could find another method for holding the paper on, and that would be fine. Worrying about protecting your idea is kind of a waste of time. You should do what you can afford and what makes sense in terms of your time invested to accomplish a level of protection, but don't let this be all-consuming. It's just not worth it. Get out there and make your product and find paths to market. That's what will really pay off. Someone WILL copy your product sooner or later if it's a money-maker. That's why developing great branding is so important: keep the knock-offs in the knock-off category in your buyer's brain, and you as the top quality original.Jason KaniganJK
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How do you convert your users into evangelists, to push your product? The product in discussion is a map based product (both navigation & travel apps)
If you want long term evangelists you're going to have to think outside of the relationship between your product and the customer and focus specifically on the customer. Identify the influencers who are already engaging your brand through social media channels and see what you can learn about them. If their profile picture is them playing an instrument, you might send then a gift card to Itunes or Guitar Center. In Short: Spend a little money and show your interest in them instead of just rewarding their interest in you. I had Wheat Thins send me a box of crackers and that was cool but I sent one tweet out and was done. General Electric saw that I was wearing a Batman shirt and sent me a really cool book as well as a hand written thank you note. I regularly engage and promote content about GE.Michael BalMB
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What range of percentage of net sales is reasonably to ask for.
This is always a question of who wants whom more. I've seen deals where the percentage was in single digits. The thing is, I've seen both deals where a LICENSEE ended up with a single digit percentage and deals where a LICENSOR ended up with a single digit percentage. It all comes down to your ability to convince the other side that you are bringing in so much to the table that the other side should get a smaller piece of the pie. Essentially, this depends on these factors: - whether you are well-known in the industry; - whether the other side is well-known in the industry; - the level of uniqueness of your product (if you've developed another minor variation of a product that already exists on the market, chances are the distributor will want a larger piece of the pie); - your level of desperation (it's one thing when you partner up with someone else who will commercialize your product simply because you can make more money by investing your time building new stuff; it's another thing when you have no realistic way to commercialize the product yourself, and if you don't find someone who can do it for you quickly, you'll starve...) MOST IMPORTANTLY, no matter what number you agree to, make sure you read the contract extremely carefully. Contracts can create rights and contracts can destroy rights. Contracts are more powerful than any rights vested in you by IP laws. So, the bottom line is: - Know EXACTLY what you are trying to get out of your contract; - Get your contract reviewed by an experienced lawyer, but make sure you tell the lawyer what it is you're trying to get out of the contract. Lawyers are not going to create "the right deal" for you. We're not going to tell you whether you should be getting 9% or 90% of the revenue. We're going to make sure that you understand whether the contract you are about to sign reflects what you think the terms of the contract are. You're welcome to schedule a call if you would like to discuss this in more detail. Cheers, AndreiAndrei MincovAM
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How do I become a licensee of the NFL, MLB, NBA, NHL, NCAA/US Colleges, NASCAR?
A 0.31 second Google search located this: http://i.cdn.turner.com/nascar/.element/pdf/2.0/sect/kyn/NASCAR_Prospective_Licensing_Application.pdfShaun NestorSN
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