I Failed at Importing Even Though It Makes $100k/mo

[hughjasle]

I have been realizing something lately. I failed.

I decided to try my hand at creating my own product and importing it.

It has done well, but my purpose in doing all this was to create a one day sellable asset.

AND that is where I failed.

I can now relate to all those pitches on Shark Tank where you see the pitchers that come into the tank where the investors always say "you are a product not a business" and the deal walks away without any sharks.

I believe that is me now.

SO - for me and all those of us who are new to creating products and 'brands' how do we make the next step from product to business?

Is it as simple as just bringing on new products and thus expanding our line?

Does it matter HOW we are selling our products - all my sales come via FB ads, my brand really means nothing to the people buying...

Do the subsequent products have to go along with the initial product, or can it be in a completely unrelated category?

Would LOVE to salvage this and make it what it was meant to be in the first place.

 

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[jon.a]

All of the usual players that come to my mind are also in the process.

 

[jon.a]

All of the usual players that come to my mind are also in the process.

@Likwid24 might have some insight if Lori has gotten that far in discussions with them. Although, the lesson would most certainly have to be in the inside.

 

[BrandonWise]

IMHO I think today the cornerstone of creating a brand is using social media influencers instead of ads, the reach is deep and high quality, like @benhebert did with Tim Ferriss and Dave Asprey on www.naturalstacks.com

Also having actively social media channels in which you can gather round your customers andget feedback from them you could learn more about their needs and what do they think of your product, to see how you can improve.

I'm also looking forward to creating my own diet supplement product(s) and importing/exporting them, I have a couple of ideas lingering but in the way of execution im very far, still have a lot of processes to learn

 

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[hughjasle]

Also having actively social media channels in which you can gather round your customers andget feedback from them you could learn more about their needs and what do they think of your product, to see how you can improve

I mean, I have this. FB ads are connected to FB page where the people can easily reach me, not to mention the site where they buy from and all the emails they get from me regarding shipping etc.

I do get feedback via those channels and know how I can improve the product already, but it's still just a product. Maybe it's just the way I'm viewing and treating it. I could very well be holding it back, not sure.

 

[theag]

Very interesting topic. I'm in the same situation and feel the same way.

I basically created a nice lifestyle business for myself from which at this point I could pay myself a salary of 5-10x the average in my area for max 2-3 hours of work per week and live a pretty comfortable life, if I chose so (I don't because I want to reinvest the profits in a new venture), but not a real asset.

I'm not complaining, as this is certainly not a bad situation. But I'm definitely curious as to what some of the really successful people here think differentiates a business like this from a "really" sellable business.

I think that my business does not have enough substance and intrinsic value. Instead I just became very good at marketing my particular range of products and automating the processes around it.

A major part is also my reliance on paid traffic. Once I stop my campaigns, my revenue drops 70-80%. Fortunately I already have a good amount of branded traffic, but in my case there is a ceiling because there is no organic search traffic for generic terms of my product. I think I would feel different about the situation if that was the case.

After all, I think one of my "mistakes" is fulfilling a "want" instead of a "need", by selling a cool new kind of product that nobody knew existed, a lot of people really like, but nobody really needs, with good marketing.

I think this is a flaw in many of the business models that are started by people here. Great potential for semi-passive moderate to high cashflow, but in a lot of cases missing the most important piece to become a real fastlane business: the ability so sell it for multi-millions.

 

[hughjasle]

I think that my business does not have enough substance and intrinsic value. Instead I just became very good at marketing my particular range of products and automating the processes around it.

A major part is also my reliance on paid traffic. Once I stop my campaigns, my revenue drops 70-80%

^^THIS^^

That's me 100%, except when I stop my ads, my revenue drops like 90%.

I think one of my "mistakes" is fulfilling a "want" instead of a "need", by selling a cool new kind of product that nobody knew existed, a lot of people really like, but nobody really needs, with good marketing.

You may be onto something here. But at the same time, there are definitely lots of sellable brands built on 'wants'.

But my product is definitely a want. However, I do wonder if some of my buyers consider it a "need" as it can save them time, hassle, etc. The same way shampoo+conditioner in one bottle saves time and hassle for some LOL.

 

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[Andy Black]

Hi @hughjasle @theag

Very interesting discussion.

Just wondering... how much natural repeat business and referrals (word-of-mouth) do you get?

 

[theag]

Just wondering... how much natural repeat business and referrals (word-of-mouth) do you get?

Approx 20-30% of my revenue is referrals (roughly my brand traffic), which is good.

But I dont have much repeat business, because I just sell this one range of products which isn't consumable. Thats definitely another problem. I'm adding more products soon, which will increase my profits, but I'm not sure if it will solve the "problem" we are discussing here.

 

[hughjasle]

Just wondering... how much natural repeat business and referrals (word-of-mouth) do you get?

I can't really gage the word of mouth traffic. I do know that I had a very high amount of shares on my ads compared to other ads. I can get the exact number/ratio, but don't think it'll do us any good. Also 28% of my traffic came direct (not from clicking my ads). Which to me just means they typed in the stupid URL from the ad instead of clicking, but could be friends referring friends.

As for repeat buyers, I haven't noticed any coming back to buy more. It's not something you need more of unless you are buying for a friend/relative/zombie apocalypse storage bunker.

 

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[Holeshot]

...As for repeat buyers, I haven't noticed any coming back to buy more. It's not something you need more of unless you are buying for a friend/relative/zombie apocalypse storage bunker.

Could you add related and/or complementary products to your line that have limited shelf life or are simply more likely to be consumed? Picking up on your zombie apocalypse storage bunker example-- water, food, and medicine come to mind. Perhaps that approach would allow you to grow the scope of your brand.

 

[Andy Black]

I know I'm teaching both you guys to suck eggs, and you're both doing better than me anyway, but I can't help thinking of a previous client I had.

They're a letting agent in Dublin.

When I initially dealt with them a few years ago, they had maybe 30 properties on their books.

The paid search campaign generated a few new clients each month. They didn't think it was much to write home about.

When I met them a few months ago they still complained that their paid search campaigns were too expensive. (Sigh...)

Except, because many of the clients they acquire each month stay with them for years, they now have 150+ properties on their books.

So their business slowly snowballs bigger and bigger every year, just off a small monthly AdWords spend. They could of course grow more aggressively if they put more effort into their client acquisition, but I'm sure they now have a saleable business.

Not sure how that helps you...

 

[JDawg]

Really great post! As a e-commerce business owner in the early stages, I too have this big-time goal. I am surrounded by entrepreneurs who have been successful, but haven't necessarily taken their business to the "next level". I am confident that my business model will become successful, but I'm unsure how to take it to that "next level".

So I am interested to hear how each you who are on the bubble of turning a successful product(s) into a salable business try to take it to that "next level".

 

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[hughjasle]

I know I'm teaching both you guys to suck eggs

Ha - I still look to you as my go to guy whenever adwords anything comes up. That and the few times I spoke with you on skype prove that you are just a legit dude. I'll always value what you say.

So their business slowly snowballs bigger and bigger every year

But this is kinda where I question things. I have already aggressively expanded (and continue to do so), but I'm not sure that just being able to profit a whole bunch really turns me into a sellable business. I guess that's what Im trying to find out.

Is it really just hitting a certain number, or is it how long I have been able to sustain such numbers or growth (like in your letting company example)? I'm thinking the latter.

Could you add related and/or complementary products to your line

Yes I can and have plans to do so (products already selected) - as well as products completely unrelated (maybe under a different brand?).

Hopefully if I can always keep something coming out in the product like and continue to sell each product (till it just doesn't sell anymore) and over x amount of time with consistent sales/growth, I can have a sellable asset.

 

[luniac]

This is a very interesting topic indeed.
I think the brand should transcend the products and become part of the peoples conscious.
In my case i make smartphone games as part of my brand "Its All Good Games"
I want people to associate the brand with 100% free no microtransaction gaming.

"product, not a business" seems tricky to me.
Is coca cola a business, not a product? I guess it's part of the culture now, so the brand successfully transcended their product and are now tradition.

Just my 2 cents, im no expert. Would love to know the right answer lol

 

[Rawr]

Just thinking out loud here, but isn't the difference between the two - market share?

 

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[hughjasle]

isn't the difference between the two - market share?

Interesting thought. I'm trying to come up with examples to support or disprove this.

One thing that comes to mind is that stupid Ped Egg product. I don't remember exact numbers but that dumb thing has sold something like 45m units. The actual brand Ped Egg, is owned by a DM company (TeleBrands) that has tons and tons of products under it's belt that they mainly sell via TV infomercials, but also sell via almost every channel they can.

I'm not sure they can actually sell that business despite being around for years and having massive sales and having the vast marketshare in the calloused foot space. HOWEVER - can the parent company be sold that has lots of little products like that in different categories and are mostly unrelated one to another?

 

[hughjasle]

After thinking about this all day with the help of all the posters here, I'm beginning to think the following:

Your 'business' becomes sellable when it has foreseeable future profits/value via a proven repeatable system.

Meaning, so long as your profits/value can be continued/grown or by someone else using what you set in place, then it CAN be sellable.

maybe... I'm gonna stop thinking about this for a while and go back to work lol.

 

[Jake]

After thinking about this all day with the help of all the posters here, I'm beginning to think the following:

Your 'business' becomes sellable when it has foreseeable future profits/value via a proven repeatable system.

Meaning, so long as your profits/value can be continued/grown or by someone else using what you set in place, then it CAN be sellable.

maybe... I'm gonna stop thinking about this for a while and go back to work lol.

There's a book called "Built to sell" I haven't read it but it may be worthwhile for you to look into it.

I'd say the difference between a sellable asset and a product that an individual can use to make money boils down to it's foundation. You can use MJ's CENTS framework or the guiding principles of the story I read to my daughter last night - The Three Little Pigs.

Don't be lazy - build your house with a solid foundation and out of bricks. Straw and sticks may provide shelter but it won't last long enough to sell and competition may come in and knock you over.

 

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[BrandonWise]

I think what drives asset value in a business is the customer base.
If you have a big list of people that spend well,you get to know who they are and what they are about, know what their customer lifetime value and acquisition cost etc. Use customer service, feedback and social networks in order to establish a close relationship with them so that they tell you want they need/want.

 

[Bouncing Soul]

After thinking about this all day with the help of all the posters here, I'm beginning to think the following:

Your 'business' becomes sellable when it has foreseeable future profits/value via a proven repeatable system.

Meaning, so long as your profits/value can be continued/grown or by someone else using what you set in place, then it CAN be sellable.

maybe... I'm gonna stop thinking about this for a while and go back to work lol.

Right, exactly so. You can get a better multiple if someone else could bolt it on to their business and grow even more than either business separately could. Who could buy your business and do that?

What a "problem"!

 

[tycoon7]

Wait, big problem right now is "product, not business"
But you already have entry product that leaded you to your customer base/list.
And they have other related needs and already trust you.

So add another and another product/service to increase customer lifetime values.

As far as I see the problem is that it's one time purchase roduct - let say teether, but that brings you to moms who also need diapers, strollers, etc.

I've saw lots of businesses start with one product and expand in selling everything else for that list so to speak.

So you are doing great and that's exactly what many successful companies went through - just keep moving!

 

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[luniac]

If its a product based business then as a potential buyer id be interested in how known the business is which would translate to smoother new product launches that require less marketing effort for visibility.

 

[Phones]

Same situation.

What should improve the situation:
- Build similar/better products to expand product line (and this also improves Customer LTV), if possible, some kind of Recurring monthly service to go with it. Recurring revenue is worth times and times regular revenue.
- Build a strong social media strategy, daily posts, instagram, facebook, snapchat, bloggers, influencers
- Build multiple paid traffic sources, not just FB. And build/improve you second purchase rate and referal marketing.
- Keep increasing revenues and profit


I'm working on the 1st, I suck at the 2nd and will probably hire someone to do it, It may take me a long time on the 3rd, and the 4th will come with the rest.

 

[hughjasle]

IDK guys -

Seems like a lot of the ideas here are more to on how to expand sales / grow.

ie: Lots of comments on building out a social plan/strategy.

While I agree that this is good for pretty much any business; I don't feel like this is necessary to building a product business into an asset.

However if your business is dependent on this as a stream of getting customers (if you are in the info niche or something like that), then yea its necessary.

But there are plenty of extremely sellable businesses out there that haven't built out their new age SEO (social).



Back to my main point - since so many seem to give tips/ideas how to grow, maybe the answer to all this is based on that: to make a product into a business you must is to expand into more products ?

 

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[Cembo]

That's what I read some time ago:

"Features perform an action. Products, normally a package of features, solve a problem. Businesses, potentially a package of products, provide recurring value to users."

 

[zargor]

I think one product can be a business in different guises.

It really depends on whether any potential PURCHASER thinks the product can be scale-able.
- Is there a demand for my product (whether it is a want or a need)?
- What's the life-span for this product?
- Am I buying someone else's problem?

For example, I might be interested in a one-product business because it's a basic necessity that all people need, the margins are adequate and it's self-funding if it's an existing business.

I might by the business for 3 times EBITDA.

Once I own the business, I might consider scaling it in a number of ways:

- Add a complementary product and sell that together with the existing product;
- Look to market the existing product in different locations;
- Add a service and sell that with the product;

Depending on the product/service, after a few years of hard marketing, I might then be able to sell the business for 4 times EBITDA (or whatever multiple may be applicable).

If you have only one product/service but it is constantly solving a problem and people are paying you in recognition of the value you are providing, sounds like a business to me.

I think one of the best types of businesses out there is the run that is profitable, but poorly-managed.

 

[MTF]

I don't fully understand what you mean by "my purpose in doing all this was to create a one day sellable asset."

What specifically do you mean by "sellable"? I'm confused because then you write that your brand means nothing to the people buying. IMO the fact what your brand means doesn't affect the sellability of the business at all as long as it generates regular profits.

I'm an author. My business is me. While I can sell the rights to my books, the new owner can't keep writing new books as me because the business equals me and nobody can replace me. That's an unsellable business.

In your case, such a situation doesn't exist. You can sell your business and the new owner can continue to grow it.

Businesses like yours are regularly sold on EmpireFlippers.com for 20x multiple. In other words, your business is most likely already sellable for $2mm. Unless you mean sellable as in bought by a large corporation, you can sell such a business without any problems.

 

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[iAmTrade]

"Features perform an action. Products, normally a package of features, solve a problem. Businesses, potentially a package of products, provide recurring value to users."

This is what I hear for this thread- and for many others here on the FLF...

They are in eccommerce- and are "selling products."

Want to know what I see as a successful eccomerce business? NOT CALLING IT AN ECCOMERCE BUSINESS.

You have a medium to sales- your site. Ok, cool, anyone can put that together. You have a way to get traffic, paid or social media...sounds good.

BUT- the issue, the product in most cases is NOT consumable, as mentioned already.

@hughjasle and @everyone else...

Think of this for a moment-

Apple... What does it sell? Computers and phones. They have 2 products (3 if you include ipads whatever, who cares).

Want to know why Apple is the "best" (if you believe they are?)

1. Recognition. What is your business, your brand, your site known for? You won't trust anyone to post the website link here. That is fine. Perhaps trust me to PM me. Or don't. But I'm certain I can present to you a few angles you haven't thought about yet.

2. What are you? Quality, or Quantity? Do you want to offer quality products or do you want to offer a million products like WallMart and not be known for anything other than cheap? ...Apple, is/was one of the top companies existent. They have 3 product types.

They stuck to electronics- and they stuck to doing what was in their best interest- expanding their market base for such products only. They didn't delve into other products when they found they made 50k in their first few months- they stuck the heck through it all BECAUSE- they believed, they can always- and continually offer value.

What is a business, that is "sellable" as you put it? One that can offer value.

I only mentioned 2 things here, recognition- brand image. And Quality or Quantity.

I don't understand why someone doesn't choose a product they can add a lot of value to, if they actually spent a few hours a week thinking of just how to do that- and doing it.

In my opinion, (and I don't understand why it was a headphone case that was linked to a number of times)...but what value can you add to headphone cases? Here's a quick idea- take the case- make it bullet proof, and run over it with a car- if it still keeps its form you just found yourself a product- I have no doubt will make you a few million dollars the first few months if you can think of the use I just found for a mere headphone case, and the countless agencies who can use it- that is no longer a headphone case.

That there is pure ingenuity.

Yes you can sell a product- a bunch of different headphone cases- different colors- different feel/sizes/look to it all. Maybe you become know as reliable for delivering on time etc. And you can make money.

But you make 100k a month? If its true, dam, nice work. I'm serious. Great work....

BUT- and I know you're 100k a month is not enough, as I would deem it just the start of freedom...you want a few hundred million a year, don't you?

How? As MJ said- either scale drastically- or offer something worth more.

I would personally want to sell 3-4 products- and always improve it- and be known for my product's xyz...as opposed to a million different things an be known as a wallmart or bestbuy...Wallmart is closing 160 of their stores...Bestbuy- I have never been there- once. No one is talking about it. Apple?... a company with 3 products make more money than those companies!? How can this be?!

Simple math.
1 product + value added = gold.

Coming up with how to add value is the easier part of- actually adding such value.

Hence...

3-4 products by apple + A LOT OF PEOPLE COMING UP WITH VALUE AND MAKING IT HAPPEN = GOLD. NOT gold but GOLD.

Understand?


----
Before people go ahead and choose another product- how about choose something where you can see unlimited ways to add value to your product. If you can see countless ways to add value to your product- then I know for a fact you have yourself a company that be at that stage- a few hundred million a year. If its really good, and you really make things happen- you have yourself a billion dollar product.

My definition of a successful company is- a few hundred million a year. Where I can take 50 Million and put it into my pocket. That is if I'm ambitious. But I'm happy with 1 million a month too. Perhaps more reasonable for some people here if they did 10x more than what they did now @hughjasle

Hughjasle, you can make it happen. Just a new product- with countless ways to add value = the product that will be your home run to the freedom and recognition you've longed and waited for.

Edit: Unlimited ways to add value = 12 things minimum that you can think of, during 7 days of brainstorming. Where each thing you think of- can be added, and will increase the price of your product by lets say 50% (if they increase the value of the product by more than this amount- did you strike oil?..just a figure I chose for now, I'm certain there's a real number somewhere when I was reading a while back but can't think of it, and how to get it again).

So with 12 things adding value = 600% increased in value...

You took your 30$ headphone case and made it into a $ 180.00 product people want to buy.


(Now I'm just playing with numbers and will stop- but you get the point).

 

[IGP]

@hughjasle & @theag - I want to know why YOU think it's not a sellable asset? Have you asked the market? ie. Talked to a business broker?

If you have something that is making money and good systems and processes in place that is certainly worth money to someone.

In fact, a lot of people prefer paid advertising, because you really aren't at the mercy of another entity. Your only "concern" is competition coming in and raising your bid prices.

If you are selling your own product, you are partially insulated from this already.

The people coming on Shark Tank that "have a product, but no business" are people that haven't figured out how to sell it yet. You both have.

Reach out to a broker and see what they say, I think you will be surprised.

Personally, I think you are both being too hard on yourself.