When selling products online many people start with branded products made by other companies. Whether you buy them at TJ Maxx and sell on Amazon or wholesale them. This is a terrific way to start and grow a steady revenue stream. At a certain point many sellers want to dive into launching their own products. Some people even start with this.
The biggest caution to keep in mind is that just like with any other sourcing method, every product is not likely to be a hit. So instead of one big product launch, plan to launch five to ten products with the hope that 1 to 2 of them will be a home run. The most profitable companies in the world do not have a 100% success rate so it’s unlikely that you will.
1. Start Small. Small means both physically small to save on shipping and small cost so that there is room for product diversification. Smaller products can be bundled in a variety of ways to test success. Order 10 small products rather than 1 large one to start with.
This leads to tip #2.
2. Bundles. Learn how to bundle. By bundling your own products either with each other or with wholesaled items, you can turn 1 SKU into many. Also consider selling your own product in varying quantities or multipacks. We have a BUNDLE CLASS for this!
# 3 is to plan long term. Be ready for a long lead time until products are selling. Manufacturing usually takes at least 3 months and can be as much as a year between the initial planning phase and when product is for sale. Even with domestic manufacturing. Budget for this both with money and time. If you want to import a product to sell for Q4, the latest you can order it is May of that year.
#4 is to start with a simple version of the product. It’s tempting to dive right into branding, customization and unique packaging. While these are all important components to develop over time, they can add a lot of time and expense at the beginning for a product which you’re not even sure you can sell. If you test 10 products that are relatively standard – limit customization to something simple like size or what it’s bundled with, then of those 10, if 2 sell well, you will know which ones to develop further.
#5. Is Research. There are a many ways to research potential products. Arbitrage can be a terrific teacher of what is popular. Simply looking items up on Amazon, to see what similar products are selling, at what price point and how good the listings are can also be a great indicator of success. Social media is another good tool and finally software. Double check each type of research. So for example, if you think something is a good bet based on arbitrage, double check it with data. If data points to a great idea, check for competition on Amazon.
#6 Avoid Risk. The closer a product comes to someone’s mouth or skin, the more risky it is. Products for kids under 3 and supplements are probably the riskiest. If you want to try those, budget lab testing, and good insurance into your business plan.
#7 Scalability. Make sure each product can be scaled if it’s successful even if you start small. Can you brand it, put licensed brands on it, create color and size variations or sell it on different marketplaces? Having a plan to scale, will give you a path to follow for each product that succeeds.
#8 Launch on a Budget. Plan to spend no more than 70% of the retail price on cost of goods, fees, marketing, and ppc combined. That leaves at least 30% to become profitable. If launch success requires lots of additional dollars beyond COGS, there is much greater risk with each product.
#9 Buddy Up. Being part of small group or even just having one buddy who you can strategize with is golden. They can help with ideas, accountability and creativity. Make sure it’s someone who will tell you the truth. A larger community of sellers, such as Scanner Society, that is filled with people with different levels of experience is also great. Even one answer to a targeted question about sourcing, shipping or design can save thousands of dollars and hours later.
There are so many ways to create private label products from importing by travel or online, to 3D printing, to promotional product companies, to domestic manufacture it is both empowering and overwhelming. Dive in, with room to learn and go for it!
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This a production of Scanner Society, the Chamber of E-Commerce.
We sit down with the experts in the industry
Rob from Payoneer is going to show us how to save money on your international shipments.
We sit down with the experts in the industry