GUEST POST BY CAROLYN KEATHING
Running a product based business is both exciting and overwhelming. I will be the first one to tell you, this path isn’t for everyone. Launching a product based business requires a new level of commitment. Whether you plan to sell directly to customer or wholesale you’re going to need to spend more time designing, connecting with customers, and shipping products. That’s on top of all the back end stuff like implementing new systems. I think it is so important to understand the big picture before jumping in head first.
Let's pull back the curtain and sharing a behind the scenes look at some of what you can expect when you run a product based business.
Success probably won’t happen overnight
Contrary to what social media may lead you to believe, running a product based business isn’t going to get you rich quickly. We’ve all seen those businesses that seem to skyrocket overnight. While every once and awhile yes, a small business catches their big break early on the more typical story is that they have spent years growing their business and made some costly mistakes along the way. Developing your product based business is one of the hardest things you will ever do, but so worth it when you know something you’ve created put a smile on someone’s face and those 5-star reviews start rolling in.
You will spend a lot of time number crunching
There are a lot of things you can just wing in life but your pricing should not be one of them. The strategy you implement for products sold directly to the consumer is going to look very different from the strategy you would use if you were to offer your products wholesale. It’s not fun or sexy but spending time on your numbers, especially in the beginning, will save you so many headaches as your business grows. As tempting as it is focused on creating new and amazing products as a business owner you need to get down and dirty with your numbers. Your pricing strategy will also help to set some parameters as you add new designs to your assortment. While you may be tempted to add additional bells and whistles those added costs may not make sense with your strategy. By looking at how some of these add-ons impact your pricing BEFORE you start designing you can save yourself a lot of time and money.
At some point you will probably come across a similar product or two and asked yourself, “how the heck is their retail so low?!” and “how am I supposed to compete with that price?!” Your initial reaction may be a bit of panic followed by a reduction of your own prices. Before taking such a big step and lowering your prices out of fear look back to your numbers for validation. When you’ve done your research and know your numbers are in line with your strategy you can be super confident that your pricing is on point. There’s also a very strong possibility that your competition didn't run the numbers as they should have and they are actually losing money!
You never really know what is going on behind the scenes of another business.
Selling Cycles Vary
There’s nothing more frustrating than getting your product line to a place where you can start selling to customers or retail stores and then not getting any bites. Next thing you know, the self-doubt starts to creep in and you begin questioning everything you’ve been working hard to develop. You’re going to have days where getting an order feels like the easiest thing you’ve ever done and others where everyone seems to be saying no. When this happens, you may start asking around to see how other people running product based businesses are doing. Answers will vary but the ones that will sting the most are those who say their business is awesome while you are struggling to make a sale. It’s really hard to not take those no’s personally when you’ve poured your heart and soul into your designs + creations. Purchasing and sales cycles can widely vary between industry, region + product so when you do encounter a slump use it as an opportunity to reflect and re-evaluate. While these slumps are discouraging and frustrating, it’s normal. Even the most successful brands have products in their assortments that aren’t as popular as others and go through periods where sales are slow.
Keep creating an amazing customer experience and continue to put yourself out there and the sales will come!
This isn’t a set it and forget it business
There are no guarantees when it comes to your product based biz. You have to constantly hustle to grow your customer base, get repeat business from existing clients, develop new designs to keep your line feeling fresh and deal with behind the scenes challenges. You are continually pushing to maintain the relationships you have while working to add new ones to your list. If you want a business that is smooth sailing, generates easy sales and essentially runs itself on autopilot a product based business is probably not going to be the best fit for you.
Copycats are a real problem
As a creative, your brain is constantly swirling with new ideas. You try so hard to differentiate your business from all the other and to create something unique. Suddenly you start seeing a product that is almost identical in style popping up in your feeds. What’s up with that?!
Unfortunately, there’s a very good chance someone will copy your design or idea. This is an industry that sadly, is full of copycats and imposters. Someone sees your idea and knocks it off. It happens ALL THE TIME. Fortunately, there are some options when it comes to protecting you and your products. Your best bet is to connect with an attorney who specializes in working with creative businesses to learn about the best options to protect you and your business.
Carolyn Keating is the owner of Wholesale for Creatives, a resource for product based businesses looking to grow. Prior to launching her business, Carolyn spent a decade in sales with an NYC-based women's accessories company where she developed and sold products to retail chains throughout the country. Her mission is to educate small businesses about the industry’s best practices so they can successfully compete in the marketplace and avoid making costly mistakes.
www.wholesale4creatives.com / Instagram @wholesale4creatives