Regardless of what you have studied throughout your life and regardless of how successful you have been, there are great advantages to starting afresh and running your own business. Even taking into account the possible fear about financial security, the freedom and exhilaration you will feel are hard to match anywhere else.
Starting off it is important to go into business for the right reasons. If your main motivation is just making a ton of money, then in my opinion, you are off to a bad start. It is hard to have money be your only motivation in the challenging moments you will face. You need to make appropriate service and appropriate quality of goods the foundation of your business. Once you have done this, you are well on your way to building a product based company.
Now I’m not saying making money is bad - quite the opposite in fact – but this won’t happen unless you are organized. If you constantly have ideas “someone” should invent and want to experience true adventure and creativity, there is no better way than building a product based business. In fact, the risk of not doing it is a bigger risk to your soul than the risk of diving in.
Having gotten your product ready, you need to plan how you can get it into homes the length and breadth of the country. Of course you need to have a good product BUT almost more importantly, you MUST be able to sell it. You need to understand what the people want and what you need to do to earn their trust. That is what leads to a purchase.
Your warehouse or production location is going to be important. You need to think about moving the product from your base to the stores. An out of the way warehouse may be cheaper but how much will it cost to transport your goods around?
Creating a team of people working in well together is a critical ingredient for any business. Trying to handle it all would exhaust you. Trust me on this. I tried it. Working well with people you trust is a critical part of your business. Your team’s role will be vital to your success. Employing like minded people may not be the easiest thing to do, but they are out there. Not everyone wants to run their own business. There are people that want to be the right hand man or woman, the person who has some responsibility but not complete control.
Entreprenuer tip: Hire people who LOVE to do the tasks you hate or are bored by. They will be better at it than you. And you must still work to understand the work they are performing for you. And if they can’t, or aren’t willing to, explain it to you in terms you can understand, then move on to someone else.
Now you need to move ahead and think about marketing. With marketing new products there needs to be time allowed to get things right. There are plenty of ways to market your product and with technology today it does not have to be expensive. When you are asking people for feedback about your product it is important they know total honesty is the best way to help you. And if you can leave out that it is your invention / idea, all the better. Some people will lie or be overly positive with their comments because it is uncomfortable for them to hurt your feelings. This is not doing you any favors. In fact, it is dangerous if you believe all the glowing compliments of the people who know you made this thing.
The next major area to look at is your packaging. It will be one of the first things a potential buyer sees. For you the price is going to be important. For the consumer it will be all about appearance. For the retail store buyer it will be all about the dollars per square foot the product produces. Finding a balance between these three sets of needs and product cost is a large accomplishment. We work on this everyday with clients. It is the center of the wheel that can drive your product sales.
Before you decide who to sell your product to, take some time to really think it through. Not every sale is the right sale for your particular stage in your business.
Here are only a few of the considerations for selling to large retail chains:
Profit margin that particular store chain wants to make.
Consumer perception of that chain’s reputation.
Sometimes selling at a low end store first limits the other orders you may get.
Marketing support you are willing to give.
Whether they already sell your category of product.
Before selecting which places you want your product to be sold, go into the stores and look around. You want to see the store layout. Get a feel for where your product should be sold. Design your packaging to fit that space. Look at the shelves they already have and consider your packaging design.Will it fit on their shelf or will it just blend in with a product already available? All of this is called “merchandising.”
In more advanced buyer conversations many points can be covered. You can talk with them about the layout of the store and recommend where your product will sell the best for them. Always look for opportunities to help them run a promotion for your product. Or maybe you can create an in-aisle display to get that prime spot. If they agree, there most likely will be some additional costs. However, the return on investment can be huge.
Pricing has a major impact on your success. Price it too high and you will rule out many customers who cannot afford it. Price it too low and people will doubt its quality. Also, when you are selling to retail stores, there is an art to balancing your wholesale price, distributor price and suggested retail price (MSRP). It can be very helpful to compare your item and price with the competition’s. If your price is substantially different you must give a compelling reason why.
Finally, you must have a steadfast focus on what your business set out to do & be. And you have to blend that with the willingness to be coachable along the way. If, or when, the market changes you must “adapt or die” as the saying goes. Be resourceful. Turning products to profits can be done if you have the right frame of mind, a love of what you do and most importantly, are open to others positively impacting your product business.