So here you are. You have a great business idea, a great idea for a product or service to sell online. How do you transition from a great eCommerce product or business idea in your head to having the physical product in your hand and ready to sell? Let's walk through the process together:
Before you spend a penny on getting a single product samples from a manufacture, ask yourself these questions:
What is the level of competition for my product or service?
Do a quick google search for your product(s). Where can they be bought? How widespread is the availability of your product currently? Are they available at every corner store? Major big box retail stores?
What is average retail price of your products online? What is the highest price you can find? What is the lowest price you can find?
Is there a big price difference in your products, or do most companies sell your products for around the same price? Are there good, better best versions of your products out there? For this question I'd suggest starting a spreadsheet for your research comparing at least 10 different current businesses (if available) and reviewing their price points for a similar or exact product.
What are the shipping costs to get your product to you?
Shipping costs can be broken down into two parts - What is the cost to have your product shipped to you? and... What is the cost to have the product shipped to your customers?
How much will shipping cost me? Is product large? is it heavy? How much (per unit) will it cost to have it shipped to you? What percentage of your cost will be associated with shipping? Where is demographic you will sell your product to and what is the cost to ship your product to your customers?
What is average cost price? Including shipping cost, border and import duties, exchange rates, everything.
What are your customer demographics? Age, marital status, sex, etc.
How wide is your market? Are you targeting only men? Women? Youth? Seniors? Are you targeting only people with a specific life challenge? Status? Political affiliation? Need? Only people who drive? Play Video Games? Use a bicycle? Are hard of hearing? etc. Research your target customer demographics in a reasonable way.
What are 2-3 things YOUR product will have over any competitors products?
What makes you different from the other businesses currently selling your product. What makes your company different? What makes your product different or better?
The obvious answer is price, but there needs to be more that differentiates you from your competition. Longer warranty? Better customers support? Higher quality product? More features? Bigger/smaller? More available accessories? What is it? Write it down and believe in it.
Its possible (and even likely) that when doing the above research your once great product idea is no longer looking as great as you had originally thought. Perhaps there is much more competition then you originally thought after doing your research. Perhaps the shipping costs are too high to get your product to your customers efficiently and still hold a good margin. Perhaps your demographic is too narrow. THIS IS GREAT! You did not waste your time and effort on a product that has major roadblocks to success! Go back and try again!
Rinse and repeat this process until you hare convinced you have a product that is:
Words of Wisdom: The most successful companies are born from someone with a personal passion for their product or service. If the product or service doesn't speak to you, don't even think of getting in business with it. You need to be passionate and excited to get your product or service to your customer!
Once you have satisfied all of these questions, and are happy with the answers, it is now time to dive into the testing of your product. To test your product, you need to connect with 3-5 manufactures of your product.
There are many places online to connect with manufactures, the most popular website for direct manufacturing connection is Alibaba, but you may also consider ChinaBrands, DH Gate, Export Hub, and Made In China - To name a few.
When searching and reviewing potential manufactures for your product, here are some important things to consider:
Words of Wisdom: If a manufacture is not responding to your requests quickly and accurately this is a huge red flag. Even if their products look great and their prices are excellent, if they don't have the time for you, don't have the time for them. Period.
Once you have your 3-5 potential manufactures, it is time to place your first sample orders. Depending on the cost of your products, you will want to receive several samples from each manufacture, and have prepared a handful of your closest friends and family ready to test the product.
Once your sample products have arrived. Take them through the ringer. Review their instruction booklets, packaging, and everything else. Imagine you are a customer with no prior knowledge of your product.
Narrow down your manufactures to your top two, then negotiate.
I always always always negotiate with my manufactures. Here are three negotiating tips:
Once you have negotiated with your top 2 manufactures, pick one and make your first order!
Let’s do an actual simulated product idea from start to finish.
I’ll use Alibaba as a good test site. I’ve been really getting into Pickleball recently, so let’s use pickleball products - specifically selling pickleball paddles and balls as a business idea.
Level of competition. – 2-10
Since pickleball is a sport, and there are many specialty sports stores we are kind of behind the 8 ball when it comes to competition. I easily find pickleball products at general stores such as Walmart, Canadian Tire, Costco, Superstore, Target, and specialty sports stores such as Sport Check, Dicks Sporting goods, and more.
Shipping Costs - 6-10
Shipping costs for pickleball raquets and accessories would be middle of the road. They are not as small or light as some other product ideas, and packaging would need to be reasonably sized- about a foot by 8 inches by 3-4 inches, but they are not too heavy a product.
Demographic and market reach 9-10
Who am I targeting to buy my pickleball products? Well – this is a big pro as pickleball is a sport that is popular for all ages. It is easy to learn and offers great cardiovascular exercise. It can be played by 2 to 4 people, and people can buy and set up their own pickle ball courts just about anywhere.
Since the initial cost to get into pickle ball is low, your target demographic can be a huge percentage of the population. From children to seniors, all have the ability to learn and play pickle ball. I would argue that pickle ball is the fastest growing sport among people 65+.
What does your company offer better than your competition? What is your competitive advantage?
This is a difficult question answer without really diving into the competitors products and price points. Before answering this question I would need to do a lot of research both on the competition, whether selling, the prices are, with the features of the racquets and balls are, etc. I would also need to research the price points and information about the manufactures.
I would suggest targeting three competitive advantages.
The first and most common competitive advantage for a new company is price point. Because I’ll be working individually with very little overhead I should be able to create a higher quality product at a lower price than any of my competition.
The second competitive advantage would be artistic creativity. I imagine a pic of all paddles similarly to skateboard in that the uniqueness of it holds great value with the potential customer base. Having fun, bright, and unique rackets will give me a competitive advantage over the majority of generic boring pickle ball rackets currently available. Perhaps customization of pickleball rackets (put your face on your racket) is an option later down the road?
The third competitive advantage could be the more information provided to the potential customers through social media and our website. In my research I did not see many competitors offering instructions or much in the way of information about pickle ball. This could be a competitive advantage as providing free information all about pickleball on our website and social media and laser focusing just on pickle ball should help cement this new company as a pic of all professional business. Perhaps long-term we could look at bringing a local pickle ball professional into the mix and offer free or discounted products in exchange for using his or her face name and information.
Well we can certainly go much deeper into the research portion of this new hypothetical pickle ball business, to avoid making this post 100 pages long, let’s end the research portion here. That being said, if this were an actual business idea, the research portion would be 100 pages long filled with detailed reviews of all competition in the prices, services, available options, return policies, shipping costs, and more.
Once your own research is complete you should have an idea as to the challenges of starting your business, these challenges could be high level of competition, low margins, manufacturing difficulties, etc. Assuming that after the research you have enough positives and feel good about your business idea, now we can move on to the testing process.
As I see it there are two ways to start a pickleball business. The first would be to be a distributor of currently available pickle ball products. The second option is to be a manufacturer where you would create your own custom pickle ball products and sell them with your logos design and branding. For the purposes of this example I will assume that we are going to be creating our own custom line of pickleball paddles and accessories.
If you’re not already done so I would recommend viewing our blogs on creating a business name and creating a logo as these will be an integral process in the design of your business.
After just a few minutes on Ali Baba I was able to find three pickle ball racket manufactures.
Here is a synopsis of these manufacturers
The good:
The bad:
The good:
The bad:
The good:
The bad:
Now that we have three potential manufacturers for our pickleball paddle business, the fun will begin. I would reach out to all three of these companies and discuss their pickle ball paddles in great detail. I’d inquire about their lead-time, price point, printing process, warranty, construction material, and once I was satisfied with their answers and request a sample order of any products I was considering selling.
I would also be in contact with several pickle ball players so that once the samples came in I could ask them to give the paddles try and give me their feedback. With each manufacture I would recommend to get in three products for comparison. This way you can see if there’s any differences between the products and look for high quality in the manufacturing process. Having a consistent product with consistent manufacturing is important and if you receive only one sample there’s no way to determine this. It will also help with the testing process having several test products to test simultaneously.
Furthermore, receiving sample products will allow you to evaluate the manufactures shipping practices, the quality of the packing materials they use when shipping in the samples, the lead-times for receiving the samples, and their overall cost of shipping.
Once the testing is complete you should have one or two standout manufactures. If not, go back to the drawing board as there are dozens of potential manufacturers that you could work with. Do not underestimate the importance of finding the best manufacturer for your products. This process needs to be done diligently and with great care as it is one of the most important decisions you will make in your business. If your business is successful you could be working with this manufacture for many years to come so it is important to work out the kinks and understand their business practice early in the process.
Once you down to just a couple of manufacture options it is time to put on your negotiation hat. You want to sell yourself and your business idea to the salesperson into the company. The more the manufacture believes you’re in it for the long term and will likely have a successful relationship with them the more flexibility they may have on the price points and minimum order quantities.
Remember that the majority of manufactures on Ali Baba have salespeople that are commission based so they are motivated by long-term commitments from you. They are always negotiable and there is a great deal of competition in most areas so take that to your advantage.
And that’s really all there is to it. I hope you found this article useful! If you have any questions feel free to reach out to us.
]]>Entrepreneurs are are usually very good on the creative side of a business They are great at thinking outside of the box in the creation of their products or service. They have wonderful ideas on color schemes, create marketing plans, website creation, and many other important factors of creating a small business. Where many fall short is having a realistic and accurate objective financial plan and origination of their business.
There are 3 very important questions you need to answer before spending a single penny on a small business idea:
This question is most often under-represented by the entrepreneur, as most people just look at the product costs themselves, and compare it to the potential sales price. To be in the know, you need to break down all costs associated with the startup of the business. Moving from a ‘good idea’ to a ‘viable company’ is a big step, and knowing the up front cost of your business is the most important question you need to answer before moving forward with any business.
TIP: Heavy or bulky and inexpensive products are some of the most difficult to sell for a big profit.
Once you have added all of these individual costs – you will have complted the first part of your finance plan – initial costs to start your business. This is the first thing to consider with your new business finances... but wait, there is more!
The monthly operational costs are going to be smaller then your initial startup costs, but are still very important to understand. You don’t want to start your business with a 0 bank account, so it is important to consider how much it will cost jsut to maintain your business
TIP: Over 90% of customers return an item within the first 30 days of ordering, so increasing your return policy to 60 days or 90 days will have a great improvement to reduce customer worry, while only slightly increasing your costs.
It is absolutely crucial that you create a ‘siphon’ system for all of your first sales to go directly to supporting the business growth. This includes new inventory, expanding inventory, supporting advertising growth, and eventually your salary and salary for new employees.
Here is an example of a sales siphon system at work:
1.25:1 product return - ($25 * 1.25) $31.25 – For every product you sell – you will purchase 1.25 new products. This will help to grow your inventory.
Average discount (10%) + average defect rate/return (5%) - $10 + $5 = -$15 Customers will be more likely to make a purchase with a discount code or coupon. This needs to be reflected in your net margin.
Cost of product, shipping costs, envelopes, tape, etc. -$4
Average Cost of shipping (if free shipping is offered ) -$10 If you offer customers free shipping, this cost will be paid with the gross profits of your product sale.
Advertising cost per transaction – -$10 Facebook ads, Google Ad words, etc. This is the cost on average of how many dollars are spent per new sale. It can range in price
Costs of promotional items -$2 – This could include business cards, leaflets, pamphlets, etc.
As you can see, after all siphon systems are applied – in order to grow your product inventory by 25% per order, you will be left with a final net profit of just $2.75 per $100 order. This is perfectly OK at first, as your goal when starting your business is inventory growth and increasing promotions.
It is also important to understand that you may not take a salary or any personal income for a long time when starting a business. In the early months and even years of a business, the majority of all profits for the business need to be re applied to the business to grow inventory, product lines, increase promotions, etc.
I hope this gave you a little taste of the financial thoughts you need to be having before you step your toe into a small business idea. So often I see people say things like “oh I can get this for $20 online and sell it for $200 – what a no brainer” -
For YoniFlex, we went through this entire financial process. If you are intersetd in reviewing our spreadsheet that we broke down some of these costs you can click here.
I want to leave you with is this - The first stages of starting a business are challenging, and having a solid financial understanding is crucial to your success. As your business grows, so does profitability, as you are able to order larger volumes of products at reduced costs (and reduced shipping costs), larger orders of packing tape, boxes, business cards, and promotional materisl You will also be able to optimize your advertising budgets to be more cost effective. The first 6-12 months of a small business are the most crucial to be very accurate with your financial numbers. Stay the course and keep track of all costs. With this info you should be alto to avoid unexpected expenses or 'money pit' businesses.
Later,
Dave
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Note: If you don't yet have a business name for your company, please read our blog post on how to create a business name for your company.
Once you have decided on a business name for your company, the next important step is to decide on a logo. A logo is a physical representation of your company, and is very important to have the 'feel' of your business. If you look at your logo you should be able to get a feel for what your company is about, who is its target market, and a few adjectives to describe the business, even without reading the words.
Before going into our decisions on how we made our logo, I'd like to review a few large businesses and discuss their logos.
The subway logo incorporates a number of positive feelings. First, the choices of yellow and green are both 'fresh' colours, green being vegetables and fresh produce, and yellow being sunshine The big bold letters are curved smoothly, and the arrows on the S and the Y give direction - as 'the way' to get a fresh sub. I really like this design - its smart, fresh, and conveys the service and products that Subway is famous for.
The logo for Dove is pure, soft, and delicate. The words are italicized to not be straight up and down but leaned to the right a little. There is a smooth half circle curve on the D and the overall curves on all the letters is soft and smooth and gentle. This goes along with their overall 'the home of beauty' tagline - promoting women's natural beauty and 'perfect imperfections' so to speak. The contrast color of the golden dove is a great companion to the blue lettering. It indicates a freedom of flying and again is very smooth and soft and curved (similar to a woman's body).
Logo Example #3: Apple
The apple logo is one of the most iconic logos anywhere in the world. Apple has got to the place that only a handful of businesses are capable of. Without using words, their brand is distinguishable with just a simple image. This simple apple with a single bite out of it and a leaf on the top signals quality and innovation. Seeing the apple logo on any product immediately makes you understand that the product will be easy to use and build very well. The logo itself is simple, smooth and consistent. No flashy colours, no bold text, just a single image representing their brand.
The YoniFlex Logo:
The YoniFlex Logo is both a sign of strength and a sign of femininity. The Font we chose is a strong and bold font, with more straight lines and strength points. However, in contrast, the purple 'flower' in the center is meant to identify the femininity and sensitivity of our product. We really like the gradient purple of our flower, and the opening of the pedals.
Now that we have discussed several popular logos and designs, let's dive into what we did to create our YoniFlex logo.
Step 1: Review color pallets
Generally speaking, you want to have 2 or 3 colors in your business that you use for most of your imaging. We used the website Paletton.com, which is a great free tool to find colors that compliment each other. If you choose a bold red, for example, it will provide you with a dozen or so complimentary colors that work well with your primary color.
We also used a google chrome extension called Eye dropper, which allows you to click on any image, logo, or background within google chrome, and they will give you the color of this image. This way you can bring this color to your designer (or use it yourself) if you see the perfect color out there on the internet.
Step 2: Contact a design person.
While both Tricia and myself have some technical and creative skills using programs like Paint shop pro and photo editing apps, for this project we decided to bring in a 3rd party designer.
For budget conscious small businesses we can strongly recommend the website Fiverr.com. Fiverr is kind of like the social media of independent contractors. It allows people from all walks of life around the world to offer services such as logo design at very affordable pricing.
I would recommend that you hire 3-4 different designers on fiverr, and provide for them your desired colors, as well as some 'feelings' about your business. Strong, masculine, or soft and subtle, for example. The basic service price for most jobs is just $5, but many will offer additional logos and faster speed for more money. We found this not to be necessary, and got designs from 3 different people on Fiverr. Our total cost for all fiverr services was just $38.88.
In the end we went with Astonishlogo's design, after some back and forth with him, we settled on our logo. There were actually a great number of awesome logos created, and it was a difficult decision for us to choose this one.
Another slightly more expensive option is a company called 99designs. They are a huge conglomerate of 3rd party designers. When you signup with them, you will get a lot of choices in designs. If you have a reasonable budget the 99 designs team can get you going for about $400.
Regardless of whom you choose, make sure you have your designer create your logo in many different formats, sizes, and background colors. You want to make sure you have your logo with:
And that is all there is to it! You can get yourself a professional high quality logo and business image for a very good price!
If you want to show off your logo design ideas, or have any questions, just shoot a message at the bottom of this page!
Take care,
Dave
]]>Choosing a business name is one of the most integral pieces of the puzzle in the early stages of starting your own business. For the next many years, you will be using your business name on websites, letter head, in emails, and saying your business name hundreds if not thousands of times.
Our business YoniFlex.com is focused primarily on the support of the pelvic floor muscles. Over time as you age (and as women have children) these muscles can weaken leasing to a host of challenges later in life, including incontinence, pelvic pain, sexual intimacy issues, and bladder weakness. We wanted a business name that encapsulated our support of people dealing with these challenges.
When we fist started out the challenge of finding our business name Yoni Flex, we did a lot of research. The first piece of the puzzle is to review keywords and descriptions surrounding your product or service. In our business, here were some of the keywords surrounding our products and overall business:
A good first step is to use a synonym website such as Thesauris.com and take some of your product or service keywords and run them through the thesaurus to find all the other possible name variations.
For an example, if you are selling used cars online, you could use thesaurus and come up with:
The thesaurus is a bit of a rabbit hole, and you can continue to click from word to word to really dig deep into related words associated with your product. For example. If you search "online" one of the synonyms is "connected" - then you can click "connected' and find the word "united" and "associated" - then you can click on "united" and find the word "undivided" - often times these associative names will help you find a creative way to describe your business and company and through that discover your business name.
Once you created an exhaustive list of descriptions for your product or service, you can now start the process finding a domain name and gmail address.
For us, using a .com domain name is the most powerful part of designing a business name. If you create a business name before checking to see if the name is available in .com, you might be stuck with using an alternate extension for your name (such as .net or .biz) which, in my opinion does not have the power or clout of a .com name.
When thinking of a domain name for your business, here are a few things I would suggest you keep in mind:
For YoniFlex, we first found the word "Yoni" - which is a sanskrit word defined as "the female genitalia, regarded as s divine symbol of pleasure and matrix of generation and the visible form of Sakti" This word Yoni symbolizes power and strength, and we really connected with this word.
After we found the word Yoni, it was a matter of finding an available domain name that worked with the word Yoni. We wanted to come up with an additional word that worked with teh word Yoni to further expand on our business.
We had a list of about 50 different business name ideas, and to come up with these names, we used both thesaurus as well as Word Finder, which will show words with different letter numbers. We wanted a second word that was short and concise and direct.
Before we settled on "flex" - here were a handful of close seconds:
As you can see, once we found our base word "yoni" we were able to really dive into the secondary words and discover all sorts of good business names. We went from having very few business name ideas to having too many good business name ideas.
We used the website Instant Domain Search, which allows you to search for domain names in real time to find out if they are available.
So the setup was something like this - Both Tricia and myself sitting down in front of our computers and going through word finder 3 and 4 letter words. When something jumped out at us - like "Yoni Peace" - I would check on instant domain search to see if it was available. If it was, I would write it down in a google doc. Once we had a full page of potential business names that all had available .com domain names, it was time to whittle it down.
Our final list for business name ideas ended up being:
YoniMoon.com - We liked this name as both Tricia and myself have always been connected to the moon and the nighttime. Also the word moon is calming - both Yoni and Moon are 4 letters each which adds symmetry to the name.
YoniFree.com - We really liked this name, and it was a very close second to YoniFlex. We liked the positive vibe of the word free, and 'freedom' is an often used name with all female related products and services.
KegelFitness.com - This was another strong contender, as it really described our product lineup (pelvic floor strenghteners) and the word fitness is a strong and powerful name. Ultimately it was just a little bit too long of a business name.
And a funny one we considered:
IDontPee.com - This was a bit of a tongue and cheek domain as incontinence (the inability to hold your pee) is a big reason people would consider using our product. We ended up thinking this was a bit too unprofessional, but it did make it near the top of our list.
We ended up with YoniFlex.com as the final business name because:
I hope this has given you some incite into both how we chose our business name, as well as tips and advice for how you can choose yours. I would suggest that you take your time and really think it over. Your business name is going to be a big part of your life, and just picking one quickly is a mistake.
Best of luck in your business adventures! If you have any questions please reach out to us, or add a comment to this post.
Peace and Love,
Dave
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