Roadmap for market testing small product-- online or brick & mortar?

[Jesse D]

Hi Everyone!

I read TMF almost a year ago and it kick started me into developing a small product for a mobile device (i.e. cell phone) stand and cord holder. My design philosophy was simple:

1) Research a similar, high volume selling product online and in box stores (Amazon, Home Depot, Staples)
2) Look deep into all the customer feedback in comments (on Amazon listing)
3) For 3 star, 2 star and 1 star reviews, document all the customer comments to see what the complaints were
4) Identify common trend among customer data of complaints
5) Fix those complaints (problems) with a new product design

I went through about 4 design iterations and I am confident in the design and functionality at this point. It works as intended, serves the needs of the original product, and fixes customers complaints of the original product. I currently have about 50 working prototype units that were manufactured overseas.

I'm now at a decision point to place a larger order for market testing, about 2000-5000 units. Retail price of each unit would be around $2.50 to $3.50 per unit.

It took me long enough, but I discovered the problem of how much items cost the seller on Amazon, Shopify, etc. If I sold at $2.50-3.50 my cost of goods sold would almost be the same, and I would nearly break even (after handling, shipping, selling fees, etc). I thought about selling in packs of 3 or more units, but still the margins are relatively small.

So, I am considering the following options:

1) Sell products at break even online to test the market and see if sales are generated
2) Go hand to hand combat in my local town and areas with mom and pop shops, trying to get them to sell in brick and mortar coffee shops, bodegas, etc (little to no shipping, processing, selling fees)
3) Try to pitch the idea to a big box store (Staples, Target, etc) and license my product (less $ risk on my part), which currently has a pending Design Patent application at the USPTO office
4) Maybe do both (1) and (2)

I could use some advice on my road map from here or any new ideas I may not have thought of! Or if there is another thread related please forward to me!

I am more into the design and development of products (engineer by profession) so bringing something to market and sales is something pretty new to me, but I'm willing to do what it takes and learn!

Thank you so much!
Jesse

 

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[Eskil]

Sounds like you are on the right track to something, but here are some more thoughts to consider:

Why not try it at a slightly higher price than the rest? Since yours is unique (and pending patent), it appears from what you're telling us here that you have a value-add that people would be willing to pay a little bit more for. Why not test it first in the $4.95 - $6.95 range? You can always drop it down a little later if it doesn't seem to sell at that price point. Could this new margin allow you to then do B2B wholesale, etc?

You can increase perceived value too (to further justify a slightly higher price) by nicer packaging, or maybe sourcing an additional cheap item (nickles or pennies type cheap) you could include in with it as a kit.

 

[Jesse D]

Thank you Eskil! These are great ideas to consider and there is valid logic behind both. I'm going to put some more thought into these!

Best,
Jesse

 

[hectormendez]

Have you considered running a crowdfunding campaign to test market demand?

 

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[Jesse D]

Have you considered running a crowdfunding campaign to test market demand?

Haven't been on here in a while, but yes! Been working on Kickstarter content to test the market mind and see where it goes. I'd figure it's a low risk effort on my side and a soft launch. I have prototypes and everything so the development and usability can be showcased. Now I'm just working on how to package it all onto a campaign to best convey the value of the product.

Thanks!

 

[Vadim26]

Step 1: Build a landing page showcasing your product and its benefits, have an email sign-up button, drive traffic, build raport with customers over a weekly email campaign. Once you get a big enough email list, offer to pre-order your product at a slight discount. See what's the conversion ratio.

I would also go as far as adding a second page after someone leaves their email.
Something like: "What's your impression about the product and how can we improve it?" with a text box.

Now, not only you are building an email list, but also getting feedback at the same time.

Step 2: figure out your landed cost shipping from China and multiply it by 3.
Does this price make sense to sell your product at?

I hope that helps.

 

[Jesse D]

Step 1: Build a landing page showcasing your product and its benefits, have an email sign-up button, drive traffic, build raport with customers over a weekly email campaign. Once you get a big enough email list, offer to pre-order your product at a slight discount. See what's the conversion ratio.

I would also go as far as adding a second page after someone leaves their email.
Something like: "What's your impression about the product and how can we improve it?" with a text box.

Now, not only you are building an email list, but also getting feedback at the same time.

Step 2: figure out your landed cost shipping from China and multiply it by 3.
Does this price make sense to sell your product at?

I hope that helps.

Thanks Vadim-- Very good idea here. I was just working on a website layout last night-- I'll have to integrate some of the ideas you mentioned in your Step 1.

I have been working the product awareness effort since we hit 2020 through social channels while also building up a Kickstarter page. My intent has been to launch a KS campaign to let the "Market Mind" validate or invalidate the product. But maybe I can pursue both avenues, a Kickstarter and a Pre-Order launch page?? I will have to think that one through. Any opinions on your end?

I'm going through a big learning curve on doing marketing/advertising on my own. Most my background is technical (engineering). Creating visual content (pics/videos) and trying to quickly communicate the product value through media is what I've been working on lately. Overall, the content is definitely improving and I am getting small doses of better feedback.

Regarding your Step 2-- doing some quick Math, the calculation you mention is on the mark for the Kickstarter fund target I have estimated. Good rule of thumb there.

Thanks for the help!
Jesse

 

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[Jesse D]

Step 1: Build a landing page showcasing your product and its benefits, have an email sign-up button, drive traffic, build raport with customers over a weekly email campaign. Once you get a big enough email list, offer to pre-order your product at a slight discount. See what's the conversion ratio.

I would also go as far as adding a second page after someone leaves their email.
Something like: "What's your impression about the product and how can we improve it?" with a text box.

Now, not only you are building an email list, but also getting feedback at the same time.

Step 2: figure out your landed cost shipping from China and multiply it by 3.
Does this price make sense to sell your product at?

I hope that helps.

Hey Vadim!

Took some of your advice and got my page up:

www.plugpuck.com

I've introduced the product to my personal networks and have received support and feedback beyond what I had anticipated. It has drawn attention from people in my social groups to help with marketing and promoting the product. I'm meeting with someone tomorrow who has been in this space for 10+ years to get his input on marketing strategy. As of now, my plan is to launch a KickStarter campaign in a few weeks, build momentum up until and through the campaign duration.

Wondering if you have any ideas on how I may be able to offer pre-orders through my landing page and also on Kickstarter? Or maybe just forego the Kickstarter and attempt to draw enough pre-orders to cover most of production costs through website, FB and Instagram?

Any input is greatly appreciated! Thank you!
-Jesse

 

[Chibbs]

Hey Vadim!

Took some of your advice and got my page up:

www.plugpuck.com

I've introduced the product to my personal networks and have received support and feedback beyond what I had anticipated. It has drawn attention from people in my social groups to help with marketing and promoting the product. I'm meeting with someone tomorrow who has been in this space for 10+ years to get his input on marketing strategy. As of now, my plan is to launch a KickStarter campaign in a few weeks, build momentum up until and through the campaign duration.

Wondering if you have any ideas on how I may be able to offer pre-orders through my landing page and also on Kickstarter? Or maybe just forego the Kickstarter and attempt to draw enough pre-orders to cover most of production costs through website, FB and Instagram?

Any input is greatly appreciated! Thank you!
-Jesse

Product looks great and solves an obvious need (of mine). Good luck with the product!

Any updates for us?

 

[sparechange]

Try out some custom shapes, saw some cool looking chargers where its a shark biting the phone to charge it (stuff like that looks cool)

Could be a product extension in the future. Goodluck!

 

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[Jesse D]

Product looks great and solves an obvious need (of mine). Good luck with the product!

Any updates for us?

Still chipping away! Got the first production order in and I'm building up the online store. On June 1st I hired a freelancer for marketing which is turning into a good number of leads (email signups) for our online store launch early next month. It's building momentum and we're identifying people who have a good reaction to the product. It is a broad audience so we're working on methods to identify the people the product best fits.

First goal is to test the market and get reactions/reviews, make adjustments as needed. Next would be to gain traction on Amazon. Longer term goal would be to go wholesale and sell into bigger box stores (i.e. Target, Staples, etc)

I take this process one step at a time though. I only focus on what I need to do next. This is the only way I make it manageable for me. Along the way I'm practicing Fastlane principles in an environment that I mostly control. I have done nearly 100% of everything myself - product design, patent application, prototyping, working with manufacturers, photo/video content + editing, social media, website building, etc. I am learning a ton on my own in this process, which I hope to use as a template to utilize with other ideas/work in the future.

Are you pursuing anything in new products or business? Will keep this thread posted as I move forward.

Best,
Jesse

 

[Chibbs]

I saw where you posted in another thread about using chinese manufacturers to produce prototype. Would you mind explaining that process of finding the manufacturer and how you address the IP?

As for me, I'm a mechanical engineer by training and have experience as a product manager for a small medical device company. I have been exploring some product concepts but haven't come up with anything where there is demand (yet). I've been exploring google keywords for validating the products and the three concepts I've come up with were getting 1-10 searches per month, so shifting my focus now and looking for new inspiration.

Anyway, I think the product you have come up with looks great and would love to follow along as you progress!

 

[Jesse D]

I saw where you posted in another thread about using chinese manufacturers to produce prototype. Would you mind explaining that process of finding the manufacturer and how you address the IP?

As for me, I'm a mechanical engineer by training and have experience as a product manager for a small medical device company. I have been exploring some product concepts but haven't come up with anything where there is demand (yet). I've been exploring google keywords for validating the products and the three concepts I've come up with were getting 1-10 searches per month, so shifting my focus now and looking for new inspiration.

Anyway, I think the product you have come up with looks great and would love to follow along as you progress!

I scouted Alibaba for manufacturers. I had a hard time finding one for my product because it has some complex geometries and requirements that a lot of manufacturers couldn't meet. But I ended up finding one that was confident they could produce it, and they did.

As far as IP, in all my paper work and contractual items I had the manufacturer sign and agree to protective language I wrote in to reserve all my rights. I also have my product patented.

For your case, it's good you have a Mech Eng. background. I don't believe you need a brand new idea or solution to enter a market. For physical products see what's high volume on Amazon and other channels. This validates that there is an existing market and demand for a product.

Something I also have learned, and cliche as it is-- you don't have to reinvent the wheel. If you have read Unscripted , refer to the "Value Skewing" Table somewhere in the 2nd half of book. There's so many ways you can differentiate yourself amongst competitors outside of the product & design itself. You can take a existing, validated product (something that is selling), fix one common customer complaint about it, make it as your own, market / advertise / brand to new audiences, etc. and have something totally on your own.

Hope this helps! Will try to keep this thread updated as I go. My online store is launching Next week!

 

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[Chibbs]

Thanks for all the great insights. Looking forward to checking out your online store. I'm honestly surprised this thread hasn't had more traction. Really looking forward to following along and I will start my own thread when the time is right.

By the way, what CAD software did you use for your design abd to share with the company in china? I'm familiar with Solidworks but don't think it would be smart to buy a license as they are pretty expensive. I've used google sketchup as well, which is decent but not great.

 

[Jesse D]

Thanks for all the great insights. Looking forward to checking out your online store. I'm honestly surprised this thread hasn't had more traction. Really looking forward to following along and I will start my own thread when the time is right.

By the way, what CAD software did you use for your design abd to share with the company in china? I'm familiar with Solidworks but don't think it would be smart to buy a license as they are pretty expensive. I've used google sketchup as well, which is decent but not great.

appreciate your feedback! I’m happy to offer what I’m learning and hope it helps!

I had the same problem with choosing a CAD program. I have Solidworks and ProE experience but didn’t want to cough up $ for a license. So I found FreeCAD - an open source modeling program ran on Python. It’s pretty tremendous as a free app. Works for Mac and PC. There’s a learning curve but one you get the hang of it you can do a lot.

Nearly every supplier requested .stp or .step files, which can be easily exported from FreeCAD and most other CAD programs.

Cheers!