I want to bust the myth right now that buying stock for your physical product business doesn’t mean you have a brand. What it usually means is you have a room/garage/rental space full of stock that is causing you sleepless nights.
The buzz of launching your own brand can often put you on the path of sourcing and purchasing stock without proving theirs a demand.
I want to share with you the 6 simple yet effective steps you need to take before you go anywhere near your bank card or marketing launches!
Setting up a business can be a risky game, there are industry statistics that claim up to 25% of start up businesses fail in the first 3 years. What is even more alarming is the enterprise centre claims 80% are within the Retail Industry.
Just take a look at this info graphic.
From my own experience setting up a retail brand can be costly. Cash flow is required to bring in new product lines, scale best sellers whilst dealing with supplier payment terms, staffing and overheads.
Why make it more difficult for yourself by investing in stock because you think it’s a fabulous idea. (Yes that happens!)
Here are the 6 Steps that will save you time as well as money. Building foundations in your business that bring longevity will help ease the challenges that will need facing throughout your entrepreneurial journey.
Step 1 Clarity
Why do you want to develop a brand? Is it purely for financial gain? Have you spotted a gap in the market? Gaining clarity on your vision will help you stay motivated.
Step 2 Product Research
Is your amazing idea really amazing? Asking your nanna or best friend isn’t enough to qualify that there is a demand for your product. Research using online methods as well as off line. Have you visited retail brands that are likely to stock or range similar products. Speak to the staff ask them if it’s a good seller or why they don’t stock what you have in mind. They work with their customers every day why not get their experienced opinion.
Now this alone would not be a solid approach to selecting a product but combine that with your down research gives you a rounded view.
Ask yourself how can you improve the product you are offering vs the market place?
Can you offer a bigger pack size or a wider choice of dress sizes
Are you able to improve the performance of a product?
If you’ve spotted a gap in the market why hasn’t anyone else?
Creating pinterest boards or physical boards with images of parts of products that would work when put together with your idea. (Product developing in its simplest form)
Step 3 Who Is your Ideal Customer?
This step needs you to get focused on your ideal customer. It’s where it can all go wrong.
So whilst age profiling can be an outdated way of identifying your ideal customer what is important is clarity on who he/she/they are.
Just because you have an amazing idea for a Toy brand does not mean mums are your target market. Creating a shaving balm doesn’t mean ‘men are your target market.
This may sound obvious but the ‘who is your ideal customer’ question stumps so many entrepreneurs.
Let’s break it down because it’s vital to get a grip on this because without it there is a huge possibility you will struggle to market your product and an even bigger possibility you will waste money on said marketing.
Let’s take the Toy brand. We can assume mums are going to make up a good proportion of your ideal customer however there are so many factors to consider. What type of Toys are they? Are they plastic? That rules out women who are eco friendly. Are they for toddlers? That rules out mums to teenagers only.
You see it’s the detail of your customer that brings clarity. How many mums do you know? If I lined up my mum friends right now we would all fit into different niches.
The career mum who doesn’t have the time
The mum who home schools who is interested in Toys that fit with the lessons she’s teaching
The mum who childminds who has a constant stream of children in her home who needs hard wearing toys
The Mum who is passionate about the environment and avoids plastic at all costs
Do you see how Mum’s aren’t your target market it’s the lower level values that they have that is going to bring you connection.
Step 4 Reaching out
Now you have clarity on your customer it’s important to connect the dots.
Do they want, need, love the products you have researched. Quite often lack of sales comes from the customer not aligning with the product you’re offering or vice versa!
At this stage it’s important to reach out to the ideal customer you have identified to ask them. The key to credible information lies in the questions you ask. Do you like xyz tells you nothing, 9 times out of 10 they’ll say yes they like it.
Asking them to purchase it for £x is a different story. Be strategic with your questions. You want to know what makes them purchase your type of product. Understanding what brands they buy from, helps you decide if you’re positioning your brand in the right market place.
It’s important to look at the size of the market too. Niching down can be highly effective but be aware of the size of market you have to play with as it could impact your big future goals. Equally entering a market niche that is saturated means you have to have a product that stands out.
Step 5 Putting it all together
By this stage you are starting to form your brand and product range. It’s important you listen to the research you have invested time in gathering. It’s vital you listen to your ideal customer too. I’m sure I’m not the only one who has watched The Apprentice where tasks are lost because they haven’t listened to what is right in front of them!
Having said all of that there is a place for your own gut and intuition, we often hold the answers when we allow ourselves to be intuitively guided.
Take the time to re visit your competitors so you know exactly who your ideal customer is, where your brand will be positioned as well as the product range. Start to look at the pricing structure you would operate within.
Bench marking your competition is a buying task that is performed regularly to ensure pricing is aligned and the quality of the product is always one step ahead of the competition.
Step 6 Sourcing
Decide on your sourcing model. Are you going to test the market using wholesalers? The downside is it’s not your own brand, the upside is its minimal investment whilst you test for demand with your ideal customers.
Private label/white label is a popular way to launch beauty cosmetics and skincare brands as well as candle brands. Your branding from a production run that feeds multiple other brands. The customer would never know it’s from the same batch of production whilst you brand and price to suit your brand positioning.
Developing a unique product takes time and patience. It’s important to protect your work with trademarks and/or patents before sharing your genius designs even with factories. This is the most costly way to bring a product to market however it can also be hugely rewarding on many levels.
Working through these steps will save you time and money. It will mean you will have a plan in place to take your brand to the next level by bringing it to life.
Good luck, I’m looking forward to seeing your product in the retail space.
Business Mentor, Consultant & founder of The Product Members Hub.
Love the Planner in the image above? Check it out here The Lifestyle Planner 2019