Why Not a Physical Product? — Part 3 of 10

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¬†Welcome Back ūüôā

If you started with Part 1 and Part 2 of this 10 part series then you have a pretty good idea by now of your target market / audience and have a picture in your mind of who that customer is and a decent idea of the type of physical product you want to create. 
 
Now we need to get some samples here or a basic prototype in hand. ¬† If you are designing or creating your own product, you may be able to create your¬†prototype¬†yourself using your garage or a local makerspace or hackerspace. ¬†You may also be able to have a contract manufacturer develop one for you but the cost may be cost restrictive. ¬†If this is the case, time to get some funding through crowd sourcing… I will cover this in later post.¬†
 
However, if your potential product is from a Product Shift, OEM / Private Labeling, Utilization Shift or Product Bundling, then this task is easy. 
 
First you need some general costing. ¬†Explain what you are trying to use their product for as well as any customizations or custom labeling and ask for the FOB (freight on board) pricing based on their MOQ (minimum order quantity), 500, 1000, 5000 and 10,000 units. ¬† This can be a little tricky but we need to do some math now. ¬† Base your calculations on your MOQ price and if your products are coming from China, include an assumption for shipping ($6000 US for a 40 cubic yard container from China to your door). ¬†Also include an import¬†tariff¬†assumption of 10% (this could be lower or higher depending on the products you are importing but don’t worry about that quite yet). ¬†
 
Take the MOQ price * 1.10 (10% for tariff) + $6,000 = COGs (cost of goods)
 
You are shooting for a 4X markup at this point.  Anything less and the product is not worth it. 
 
Take your COGs * 4 and that would be your minimum sell price (MSP). ¬†Markets don’t always work that way…in other words you cannot set your price based on what it cost you to make it. ¬†You need to set your price based on what people will pay…we will cover more later but for now ask yourself if you would pay the minimum sell price for the value your product creates. ¬† If there are similar products on the market that provide similar value, what they selling for on Amazon… is it higher or lower that your MSP? ¬†How do their sales look…you can get a feel for this based on customer comments. ¬†The more comments they have the more sales they have. ¬†Negative comments are a good indicator that their is room for improvement…which you will provide. ¬†
 
Finally,  ask yourself if your target customer would pay the minimum sell price.  If the answer is yes then proceed to the next step.
 
Call the manufacturers and ask for samples.  If it is a Chinese manufacturer, the samples will most likely be free or very low cost but you will have to pay for the shipping which can range between $50 and $300 depending on the size of the product.  If it is a North American Manufacturer, then you will most likely pay for the sample as well as the shipping but the cost may be comparable.  My advise is to pay for the samples via PayPal or other third party payment system and avoid TT (or direct bank account transfers) at this stage.  Also, if is a Chinese manufacturer you found on Alibaba, make sure they are a gold certified and verified vendor.  If you have them initiate the shipping on their end it is usually much less expensive than having them bill it to your UPS account number.  I usually ask them to ship EMS as it will come through the US postage in a few days.  
 
I don’t usually bother with client references at this point as the risk is still relatively low. ¬†I do, however, evaluate their responsiveness, ease of doing business and product quality. ¬†
 
When you get the samples in hand…make sure they fit your purposes. ¬†Pay attention to detail. ¬†If they say the product is a certain size or weight or provides a certain function…is correct, does it work. ¬†Are there any obvious design flaws or safety issue with the product. ¬†Does the product seem well made and is it durable? ¬†
 
Does it meet your country’s regulatory requirements…i.e. UL for electronics, US CPSIA requirements for chemical and safety testing or flammability standards. ¬†If you are going to sell the product in Europe, does it meet REACH or ROHS requirements? Does it have the proper tags or labeling? ¬†¬†I know this is starting to sound complicated, but it really is not and please don’t let this scare you.¬†¬†It only will take you about an hour of¬†Google¬†research to see what standards apply to your product category in the initial country you would like to sell your product. ¬†I HIGHLY recommend you sell only in your home country…at least initially.¬†
 
This is a good place to wrap it up for this post.  There is a lot to digest here.  
 
Action Step of the Day: ¬†Contact your potential suppliers and get some initial pricing. ¬†Do the math and see if the minimum sell price is feasible. ¬†IF it is, get some samples on order. ¬†Don’t wait, do it today. ¬†You will need the samples for the next steps.¬†
 
Please share with your friends and come back for Part 4 this 10 part series.  
 
Other post you may like:

Why Not a Physical Product? — Part 2 of 10

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Part 2 of 10
Now we can begin to develop a product for that target market. Sometimes at this point you have an idea of a physical product but more often than not, you may have identified a problem in your market that needs a solution or you see existing products but know there has to be a better way to solve that problem.

Point of caution…Many people do a¬†Google¬†search for a solution to the problem they identified and find one. ¬†They think the problem is solved and their ideas are now worthless. ¬†Don’t do this.
In fact, if someone is selling to your target Niche then it is validation that you are onto something. ¬†If you have done your market homework…then you will know if the market is big enough to support your potential products. Also, your solution may be better or less expensive or premium. ¬†This is where you can¬†differentiate¬†and hit that home run. If you cannot find a solution to the problem you identified in your target market then you are golden…the slate is wide open.
What if I didn’t find a problem to be solved in the target market? ¬†Good question, you need to identify how else you can create value for your customers. ¬†TRY the cool factor or play on an emotion (fear, sex, love). ¬† No one needs a pillow stuffer, but my kid wants one¬†every time¬†he see the commercial. ¬†Basically it is pillow with the face of an animal that your kid can use to store his crap…pointless but it plays on the cool factor for kids. ¬†This is not marketed to me but directly to him.
This brings up a good point, keep in mind that ideal customer you identified in part 1 and think about how you will reach them. ¬† Are you going to be selling retail, direct to consumer, wholesale, through a unique distribution channel? ¬†You don’t necessarily need to answer this question just yet, but keep it in the forefront of you mind along with the picture of your ideal customer.
Now find a product — don’t buy or develop anything just yet. ¬†We will want to do some market testing before we spend too much money developing a product. ¬† Your goal here is to start to find some potential products that create value for your customers or solve the problems you identified. ¬†We will cover some of these options in later post, but for now here is a brief outline of options.
  • Product Shift — So if the product already exists either in another country or culture and you can bring it here as is, then great. There are all kinds of products that have been brought to markets in other countries that eventually find there way into new markets. ¬†You can be the person who does this in your country. ¬†Search¬†Alibaba¬†for¬†some great opportunities in this arena.
  • OEM and Private Labeling — Find a manufacturer that does what you need and is willing to put your logo on the product or produce a product to your specs. ¬†Again,¬†Alibaba¬†is one of the best place to find these¬†opportunities. ¬†You can also check¬†Thomasnet¬†and search for just about any manufacturer in existence.
  • Design and create your own prototype of something that solves the problem or creates value. ¬†Bootstrap this option and if you have a local¬†Makerspace¬†or Hacker Space, then start there. ¬† Spend less than a few hundred dollars on this step. ¬†The¬†prototypes¬†don’t need to be final versions or even pretty. ¬†They just need to be good enough to see if the solution / product will work. ¬†Only after you determine market interest, will you need to create engineering drawings and additional samples. ¬†If the¬†pro-typing¬†is too expensive, skip this step and start a crowd-source funding campaign to raise the money to develop the product.
  • Utilization shift — find a product that is used for one market Niche that could also be used for your niche. ¬†Think a organic kids play mat that would make an awesome large breed dog pet bed. ¬†I will add a case study later relating¬†to one of my business and that is exactly what I did.
  • Product Add-on — What can you do to make an existing product better. Think of all the cases that come out for IPADs.¬† Think DIY — can you provide a service on a product designed for the DIY market that makes it easier for the DIY customer. ¬†It would have to be something that eliminates a customer pain but it can be done.
  • Product Bundling — This is what the whole gift basket community is based off of. ¬†Takes several¬†related¬†product that serve your Niche well and bundle them as one product. ¬†It is really useful, if these are hard to find items. ¬† You put them in a package bundle with an appropriate discount and add your branding. ¬†Your value is less cost than buying individual as well ease of finding those related products.
Ok, this post is getting too long so time to end it.
Action Step of the Day: ¬†Go to¬†Alibaba¬†and search for some products for one of the options listed above. ¬†Get a feel for what is there and note the minimum order¬†quantities. ¬†Also go to¬†¬†Thomasnet¬†and search for a potential manufacturer of your potential product. ¬†Remember don’t buy or create any products just yet…that is later.
 
Please share with your friends and come back for Parts 3 – 10 of this 10 part series.
Other post you may like:

Why Not a Physical Product? — Part 1 of 10

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Whether you call it life style design (think Tim Ferris) or becoming an¬†Internet¬†entrepreneur or simply a business owner, the goal is the same create real value and sell it. ¬†If you are pursuing your passions and as many successful entrepreneur have said, the key is really the value part…the money will follow. ¬†That being said, most of the business or entrepreneur advice is about building an¬†Internet¬†community and audience, giving away awesome free content and then monetizing that site and creating passive income.

This is only one of hundreds of way to create a business but since their are so many pod-casts, blogs and business books on doing just that, it gets most of the attention.  Have you noticed that much of the advice / coaching is pretty much a unique spin on the same advice?

Sometime you need to take the road less traveled (thank you Robert Frost) and go with one of those other ways of creating a business…so why not try a¬†physical product. ¬†Not every one can be a business coach and not everything you try will work.

What does it take to create a physical product?  Again it is all about value, fulfilling a real need of your customers or solving a problem or simply making their life easier (save their time, reduce cost, protect their loved ones, etc.).

You need to start with your target customer…remember you cannot afford to market to everyone so make it narrow and deep. ¬† ¬†So in this exercise, picture the person that is your ideal customer, maybe they are like you or someone you know. ¬†Name that person if you like and ask yourself if they would want to buy that product you end up creating? ¬†If the answer is yes, then you are on the correct path. ¬†For every business decision you make, ask yourself if it will create your target customer or directly benefit your bottom line. ¬†If the answer no, then don’t do it or change what you are about to do.

Don’t create any products until you define your Niche.

So why start with your audience in mind? ¬†If you don’t your product will be hard to sell. ¬†It is much easier to develop a product for an existing market then it is to develop a new market. ¬†It doesn’t mean the latter is not possible…it is just easier. ¬†It also help if you understand the target market, so start your search with your own Interests, hobbies, passions, needs, wants, etc. ¬† What makes you happy (activities…think actions)? ¬†What pisses you off the most or is simply annoying? ¬† What books or magazines do you currently or historically subscribed to?

Brain vomit everything you can think of on a piece of paper and don’t worry about how insane something may sound.

Everything you write down is a potential niche market.  

You can use the free trial of Mind Meister to group your potential Niche Markets and create relationships that will help you narrow them down.  This is mind mapping and brainstorming software that I live by.

Do you want to see how big or profitable these markets are? That is easy, the Market Samurai tool is what I use to laser target high traffic, high profit, low competition markets with devastating accuracy.  YES IT WORKS and it comes with a awesome free trial.

Action Step of the Day:  Use the free trial of Market Samurai to narrow down your potential market Niche to your top three.   

Please share with your friends and come back for the Part 2 – 10 of this 10 part series.

Other post you may like:

Wealth and Income Building…¬†

Happyness…

Health…

Affiliate notice: I am an affiliate for both Mind Meister and Market Samurai but I would recommend both even if I wasn’t.¬†They have literally saved my sanity and turned complex tasks into simple tasks.

Dude Save Me!

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I am writing this blog post for you, dude.  When I say dude, I mean this in a non-gender specific way. 

Who are you…well in my mind you are like me you have taken the red pill and realized you were in the matrix but you have not quite figured out how to get out of this virtual world. ¬†Maybe you caught a business podcast or read one of the hundred books on entrepreneur based businesses or maybe you got there on your own….it doesn’t matter…somehow you know.
You no longer just dread driving to work on Mondays but every day. ¬†You mash some keys on a keyboard but feel like the meaning of the job, even if not boring, had died years ago. ¬†You could change jobs but it probably wont fix the problem…why because you are one of the living dead….going through the proverbial motions because you have to…right. ¬†Family obligations, kids, that is what you are suppose to do…it is safe. ¬†Sure you may work on a project once in a while that is exciting or taps into your passions but it is not enough, in fact it just makes it worse as you then use this to ¬†justify what you are doing or working for. ¬†It is not that bad right? You don’t have bullets whizzing by your head do you? ¬†At least your not stuck in a factory being paid shit doing the same¬†repetitive¬†task over and over and over again…I would almost¬†prefer¬†this…at least the day would go by faster.
In the mean time your life is ticking away, 20’s, 30’s 40’s 50’s…dude what are doing? Humans and¬†you¬†in particular where not meant to sit on your ass all day mashing keys. ¬†How many pounds have you gained since you started your work career…be honest? ¬†How many precious hours of your life have you wasted doing¬†menial¬†crap for a company who really doesn’t give a shit about you? ¬†How many hours or days away from your kids have you sacrificed?
You don’t have to do what you are currently doing, there is a better way…you can unshackle your life.
That is what this blog is about…It is my attempt to escape the matrix and dude, I want to take you along on the journey.
“When you change the way you look at things, the things you look at change” — Wayne Dyer.¬†
Think about this for a second or two.
Ok, time to look at things differently.
Take one action step each day…today’s action step. Download¬†Evernote,¬†(It is free)¬†install it on your computer and create a notebook call “Idea Journal”. ¬†Whenever you get an idea…jot it down.
Evernote tip: You can capture your screen or a part of your screen by pressing the window key and print screen. ¬†Want to become an Evernote master…try Evernote¬†Essentials, it will amaze you and will truly make your life easier. It comes with a 100% no questions asked 30 day¬†guarantee…not happy, no problem!

Flip Your Way to Freedom

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If you have not read my first few post, please do so as these are important. I wrote this book as a easy way for you to remove the fear of money while you pursuing your passions by creating a real cash business. Through flipping products or services (No Houses, No Bull, No Gimmicks….this is a real business).

This book is a no BS guide to flipping your way to financial freedom. No house flipping, No Wholesaling, No drop shipping. This is a REAL business.

From cars to generators this book tells you how to create a cash business that will generate between $2000 and $5,000 a week part time. It covers where to find items to flip as well as where to sell those items and how to maximize profits for the least amount of Work!

Topics include: What to flip including stuff you can get for absolutely no cost. There is large section just on cars with a car buying checklist that is worth more than the price of the book. It covers all other potential items you can flip including where to find them, how to evaluate them and how to choose good items for flipping. Each section includes tips and pitfalls from the author’s years of experience buying and flipping big ticket items. There is a detailed section on developing your own flipping strategy that fits your goals and experience and each section includes real world examples. The final section is all about safety and security.

Flip Your Way to Freedom

Wealth and income building, the third leg of the freedom essentials stool.

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In the previous post we covered health and happiness…now it is time to cover wealth. ¬†You would not be surprised to learn there are lots of ways to make money on the internet and most sound like scams or gimmick and many people want your money to tell you how to do it. ¬†There are also a lot of legitimate internet based business that truly add value and make the internet a better place to live. ¬†¬†

Oh, by the way…we are going to give you all that we know…absolutely fee….no cost…no gimmicks…no Ads…no bullshit. ¬†Finally, to developed a¬†legitimate¬†internet business you need to create value that someone wants to pay for and it will take time and LOTS OF HARD WORK. ¬†You will not get rich overnight and did I mention it will be LOTS OF HARD WORK.

Here we go..option 1 Follow your passion the¬†Gary Vanyerchuk way. http://garyvaynerchuk.com/¬†¬† Please go get a copy of his book called “Crush It” for much more details on this option.

Rule number one: Create a blog on a topic that you are passionate about and start writing great content. ¬†Buy the domain name for your unique value¬†proposition¬†..this could be yourname.com and if it is take try yournameHQ.com or something to represent your niche..like BBQjoeHQ.tv (the fat man’s guide to backyard pork). ¬† You can hedge your future monetizing potential by going to google trends http://www.google.com/trends/¬†¬†and google key word tool http://adwords.google.com¬†¬†and exploring the interest on your niche topic. ¬† Once you figure out where your passion is start writing your great content and then¬†don’t¬†spend a lot of time looking at¬†analytic…just keep creating great content, every week, week after week.¬† IF you cannot make a list of 52 potential blog post (one per week) starting out then you probably wont have the passion to maintain your blog. ¬†Stale blogs lose followers and die out.¬†Your blog could be written, video or an audio podcast…that is up to you. ¬† ¬†There are many tools to help with this…an easy one to start with is wordpress.com

Rule number two: Give it away for free..all of it.

Rule number three: Tell everyone about your great content. Great content is useless if no one knows about it or can find it. Go to twitter, facebook, YouTube etc. all the social media outlets and post a link back. ¬† Also search these social media outlets for content related to your niche and post comments there as well as respond to comments that other have posted. ¬†You will eventually be known to your community and your followers will come. ¬†This is where the hard work comes in…every day you must do this and if your passionate enough about your topic then it wont seem like work. ¬†This must be done until you get enough followers…failure to do this will result in poor readership and poor future monetizing potential later on.

Rule Four: ¬†Keep it real and authentic..don’t try to be something you are not. ¬†People smell bullshit and if they can’t trust you they won’t consume your content.

Rule Five: Respond to your audience and see where they lead you. 

Rule Six: Rinse and repeat over and over again.  In other words, you are building community by being involved in the community and adding value to that community.  

Rule Seven: ¬†Monetize your blog. ¬†There are lots of ways to do this but¬†don’t¬†sell out. ¬†This is the long game. ¬† Build your community and be recognized as a thought leader in your community and the opportunities will present themselves. ¬†These¬†opportunities¬†could be advertising…so with the BBQJoeHQ.tv example above, which by the way, at the time of this post, was still available, you could advertise your¬†favorite¬†BBQ sauces or grilling equipment. ¬†There are also¬†opportunities¬†for affiliate deals or for your own unique product.. like your own BBQ sauces. ¬†Once you are known in your niche there maybe individual one on one consulting opportunities or book deals or speaking engagements. ¬†The key is building the community and getting recognized as a thought leader. ¬†

No more rules..get out there and get to work.  

Do it now.

Happiness, the second leg of the Freedom Essentials Stool

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Have you ever driven around on your way to work or while doing errands and taken the time to look at people’s faces when they driving? ¬†Pay attention to the lone drivers caught up in traffic during your morning commute or look at the expressions of most people on the bus or subway. ¬†This is a good time to do it as they are caught up in their own bubbles and are usually distracted by driving, or their phones or papers. ¬†A vast majority of those people do not look happy. ¬† Some may indeed be happy but there is a very good chance that their facial expression accurately represent how those people are feeling at that point in time.

So why are there so many unhappy people going to work or running errands? ¬†Could it be because most people work to support themselves or their families and have most likely have lost the connection to the passion that caused them to go into that line of work. Or could they dread going to an un-fulfilling job….are they stuck in cubicle hell?

In the first post in the this three part series we covered health and without health you will not be happy. So in this blog post, we are going to cover happiness.

Without happiness you will never enjoy wealth. If you have any doubts in this statement just ask the lotto winners who end up even more miserable than before they won the money. Money can’t buy happiness, even though it can buy you items to make you happy and give you the freedom to enjoy doing interesting things that can make you happy. If you won the lottery, there are things you can do to make sure you don’t end up miserable, unhappy, stressed out and overwhelmed….we can can help with that but that is probably a subject most people will never have to worry about.

The secret to being happy is to do things to make you happy but the trick is you have to be honest with yourself. Yes, this can mean buying some items to make you happy …please be honest about this as well. If you want a BMW and you have the means to acquire it (legally) then go for it. However, for the most part the happiness we are talking about here is more than gratification.

We are talking about fulfillment, passion, balance and purposefulness. This is true if you are 18 or 65, if you have a family or if you are an orphan. Most people want to feel like they are contributing something to the world and not just floating down the river, passively watching the trees go by. Many people do this and don’t even realize they are doing it because they busy themselves with meaningless unimportant minutia.

There is a cure to this and you can do it now by following these steps:

1. If you were given $1,000,000 dollars what would you do with it? After you pay your bills or buy those thing that you think will make you happy….what would you do day to day? Most people can’t answer this simple question and if you can answer the question without pause, then you are probably doing something in your life that makes you happy. Find something that makes you feel good, enthusiastic or passionate and pursue those activities. If you are stuck in cubicle hell or unemployed and that is the major source of unhappiness then make sure you read the next post in this 3 part series…it will help.

2. Surround yourself with positive influences (people, family members, co-workers, neighbors, volunteer groups, etc.). You are the average of those you spend time with. If you spend time with negative, soul sucking people then they will bring you down…so stop hanging out with that one friend who is a basket case until they can get their lives back together. Help out where you can, but don’t get sucked down the rabbit hole. This doesn’t make you a bad person…it makes you a smart person.

3. Another secret to being happy is to be happy with what you have without being envious of what others have. In other words, don’t worry about what other are buying or where they are traveling to or what they do for a living…focus on yourself and your family and be grateful for what you do have. This is true even if you don’t have much. If you have your health but you don’t have to stick to rub together…you are still better off than the multi-millionaire that suffers from chronic pain. If you are a multi-millionaire that suffers from chronic pain, then at least you have the money to get medical care…etc.

4. You can make yourself happy by helping others. Altruistic concern for a cause that drives volunteer activities is a good place to start. It doesn’t matter which cause you chose…just do something to make the world a better place as often as you can. This alone will improve your happiness by 10 fold. If you combine this volunteerism with a passion mentioned above then there is a synergistic affect.

5. There is a technique that can help get you our of a slump and it involves your own mind. Say the following out loud, starting at a low volume and progressively getting louder until you almost start to yell: “I will not let XXXX bother me today”…..”I will not let XXXX bother me today”…..”I will not let XXXX bother me today”. Where the XXXX is one of your sources of unhappiness. Keep repeating until you believe it.

6. If you are feeling down for no apparent good reason, you may have low vitamin D levels and you may need to get them checked…see the health post. Taking Omega 3’s (flax derived) and vitamin D can help with mood. Also, Saffron is a good herb to help with enhancing moods.

Finally, if you are depressed or unhappy for no apparent reason and it has lasted for more than a week and none of the suggestion here have worked…then please go get some help from a medical provider. There is no shame in seeking counselling.