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EXECUTION New Product in Fitness Niche - Execution

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GravyBoat

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What's up guys and gals,

I decided to create a progress thread for our new product in the fitness niche. It's a physical product with only 2 SKUs to begin with (2 colors same product).

Per the suggestion of @MythOfSisyphus I will detail the entire process here so hopefully others can learn from my mistakes and successes in the process.

So let's rewind to the beginning:

Friend and I were day drinking on one fateful day in early 2019. I'm unsure of the exact date, but we basically came up with this product out the blue.

We were at the gym before, and realized something out of place... I'm not going to go into the product itself for obvious reasons but the way we came up with it was:

We saw a problem that day.

We realized we had seen this problem before.

We realized MANY people had run into this same problem and still do, still are.

We realized no good solutions currently exist.

We realized creating a good solution would not be easy, thus increasing barrier to entry.

My friend whipped up some designs since he does graphic design.

Over the next few days, the idea blossomed, and we decided on a design.

We hit up suppliers on Alibaba and Aliexpress, also some from tactics mentioned in @Walter Hay 's book (THANKS WALTER!)

We got a TERRIBLE response back from Chinese factories. They were unresponsive, unaware, and unwilling to work with us.

I've worked with China several times in the past, and it has always left a bad taste in my mouth for whatever reason. And I didn't just hit up 3 factories, I'm talking at least 40-50 back and forths with factories, suppliers, middle men, whoever. Some were more helpful than others, but the general consensus is that they did NOT want to help us develop our product. They just wanted to keep stamping out AliExpress products that had proven results that people were drop shipping.

So we said f*ck it and went looking for sourcing companies. Our thoughts now were to try to find suppliers in Mexico or South America instead. I have been there countless times, and enjoy the culture and way of doing business MUCH more than China (which I have also been to). That, combined with the vastly shorter shipping times seemed like a wonderful opportunity.

We hit up suppliers on our own there, but it was hard to get ahold of the right people. So we hired sourcing agency #1. They did some work for us, and they ran into the same problems as we did: no one wanted to help us.

We hired sourcing agency #2. Same thing.

By this time, months had gone by, and we were no closer to getting this product to market than before, when we were day drinking on the deck...

(Keep in mind, my friend and I both run 1-3 other businesses and this is NOT our main project by any stretch. So we could have potentially been putting in alot more work than we really were on this. That being said, the ball bouncing between parties was always kept in their court as much as possible, so we were moving pretty quickly all things considered).

We hired sourcing agency #3. They SWORE up and down they could do it, and had connections etc.

This company also had a product development department, which they upsold us to. We worked with a guy who REALLY did not understand our product (he wasn't physically fit, he was kind of a pussy, and we both got negative vibes from him). So we ditched that guy. Thankfully the sourcing agency had poached a guy from Under Armor USA, and he was the PERFECT fit for our product development.

We ended up paying them $3.6k on top of the $2k sourcing agency fees to get the product developed.

The product now looks VERY good. It's top notch. The materials we decided on are high quality.

Our goal with this product is to make it POP on Instagram. So we decided on colorways that would make it stand out.

The sourcing agency is now in discussion with 1 Mexican supplier, and 5 Chinese suppliers for us.

China is apparently on vacay at this moment, so we are waiting to hear back, but we have ordered 3 samples, 1 from 3 different factories, for around $1.5k total (was surprised at this, cheap!)

The mold fees are around $1.5-2k for each factory. Again, not too bad!

The MOQs are around 1000 from each one. Our move is to pay the mold fee, then renegotiate a 500 UNIT MOQ from the factory that has the best sample.

That's where we're at right now. Waiting on samples to arrive.

My buddy is in Aus and I am in California. So we have to have samples shipped to both areas in order to get feedback from both of us.

Some things to note:

I am WELL aware that partnerships in business rarely work out.

This guy has been my long time friend, and also runs his own profitable business offline in AUS. I run 2 profitable businesses in the USA. So this is strictly a side project for both of us.

Neither of us need the money, neither of us are opposed to spending money on this. Both of us are level headed enough and contracts have been signed to where I don't think many issues will occur. We've had open communication and he has seen some of my partnerships go south in the past few years. We are VERY aware of the possibility. But to both of us, it's just a fun side project to work on. Will keep everyone posted on that.

The last time I really worked heavily with China was in 2014/2015/2016 era. I understand the world has changed alot since then, BUT, I was ABSOLUTELY ASTOUNDED by the unwillingness to work with us on developing a new product. Maybe I was just barking up the wrong trees over and over?? But I feel like AliExpress and the drop shipping craze has absolutely changed the game, changed how China thinks and acts. Obviously I'm generalizing but wow man, after months and months of no help, I was jaw dropped.

My goal here is to get massive orders from China and have a Mexico factory that can pump out quick orders for us as well, thus minimizing risk and maximizing control having 2 factories able to pump out product.

Future:

Product 1 is killing it, we make accessories/upsells/downsells. Product 2 is born, then product 3 etc, a brand is built, ... Profit???

Stay tuned for new developments in this thread.

David
 

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GravyBoat

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What's the marketing game plan for this? Straight to consumer or go to gyms?

Both

We planned on launching on AMZ before Q4 this year, but that's not gonna happen obviously. So I'm expecting by Q2 2021 AMZ Launch, with FB ads, giveaways, etc, possibly hire a company to do the launch as I've never done one before and want to make sure it's done right.

We will also launch on our own ecom store, driving traffic from IG influencers, and FB, word of mouth etc.

We will also go straight to gyms once we have product in hand, and try to strike deals. I have a long list of gyms within 3 hour drive of me (thousands) so that should keep me busy for a while.

Also will be striking Influencer deals (have a list of targets already) on IG, Tik Tok etc.

Any suggestions for us?
 

GeoffP

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I can't really speak to how to market this (but if you need someone to tell you whether your costs are whack, I'm your guy!) but I strongly recommend you have your IP (patents) in order if this product qualifies for a patent.
 

Sebastya

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Nice bro. You've been hustling consistently so I know you'll figure it out.

Did you look at any US suppliers from ThomasNet? I remember last I checked they have a quoting system where factories will put bids in if they are confident they can make the product for you.
 

GravyBoat

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Did you look at any US suppliers from ThomasNet? I remember last I checked they have a quoting system where factories will put bids in if they are confident they can make the product for you.

We tried this as well as MFG.com, we got lots of responses but turns out all the US factories were actually Chinese factories, then the same issues occurred when they went to deal with their Chinese cohorts.

We have a 3D model of the product as well as exact dimensions and materials, I'm floored to see how it would be this difficult to understand and get quotes on...

The product is 2 pieces of the same material and 1 piece of a separate material, all commonly found materials...

At any rate we should have 3 samples by the end of October. Fingers crossed that they are up to quality.
 

Walter Hay

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I think this great thread is where I should chime in about product sourcing.

Yes, Chinese businesses have become less inclined to work with customers wanting to develop a new product. There are still some that do, but mostly they are interested in stealing the idea.

In a case such as this one, my first recommendation would have been to go to ThomasNet, but here is now a caveat on that recommendation - There are many non US companies listed now, and also a quite a few that at first appear to be manufacturers but they are in fact importers. It is not as bad as MFG.com.

It is a pity that such a longstanding US sourcing platform has changed direction so much, but it is still very worthwhile using, provided you do your due diligence just as if you were dealing with China.

Sometimes dealing with Chinese suppliers requires thinking outside the box. Such was the case that I describe here:
Essentials and other hints for successful sourcing
One company in China clearly had the ability to produce what my Fastlane client needed, but they were afraid of breaching government regulations and declined to handle what was going to be ongoing big orders.

It took a lot of perseverance, but I presented them with a way around those regulations and presto! They agreed to make the product, and the way I had set it up made it impossible for them to copy the idea.

Walter
 
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GravyBoat

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They agreed to make the product, and the way I had set it up made it impossible for them to copy the idea.

This has been our main hangup with paying a Chinese company for a mold.

We pay them, they make the product. Great. We sell a bunch of them, now what?

What incentive do they have NOT to sell our mold to every factory down the street, now that they know the product is a "winner" and is doing volume?? How can this be prevented?

Unfortunately I don't think we're allowed to go there in person right now (which would mitigate the issue I'm assuming).

Thoughts?
 

GravyBoat

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I can't really speak to how to market this (but if you need someone to tell you whether your costs are whack, I'm your guy!) but I strongly recommend you have your IP (patents) in order if this product qualifies for a patent.

I had my friends dad who is a patent lawyer file for a provisional already... does that do anything?

I'm mainly worried about the MFGs selling our schematics and molds once the product is proven to sell (in a year or so). How do I do due diligence to prevent this?

Obviously building a "brand" is a way, being first to market etc but from a legal stand point is there anything I can and should do?
 

Walter Hay

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If you are paying to have a mold made, there is one way to make sure it is only used to produce your product.

Have it made with your URL as an integral part of the mold, preferably with your brand name included. Let them know that you will be paying for an inspection service to examine the mold and make sure your brand/URL are not there as an insert.

You probably won't need to pay the $200 to $300 to actually have the inspection done, but telling them you will be doing it will stop them from using that little trick. If an insert is used they can knock it out and replace it with an insert with your competitor's name, and switch it back again for your next order.

In effect that would mean you are paying for your competitor's die.

Walter
 
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Rabbeen

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Both

We planned on launching on AMZ before Q4 this year, but that's not gonna happen obviously. So I'm expecting by Q2 2021 AMZ Launch, with FB ads, giveaways, etc, possibly hire a company to do the launch as I've never done one before and want to make sure it's done right.

We will also launch on our own ecom store, driving traffic from IG influencers, and FB, word of mouth etc.

We will also go straight to gyms once we have product in hand, and try to strike deals. I have a long list of gyms within 3 hour drive of me (thousands) so that should keep me busy for a while.

Also will be striking Influencer deals (have a list of targets already) on IG, Tik Tok etc.

Any suggestions for us?

Amazing bro!

Regarding IG, Tik Tok and your list of targets I have a small suggestion... Gymshark is a brand that has become huge mainly in Europe, especially the past two years. Right now they are valued over US$1 billion. I don't know how big it is right now in the U.S. as I'm based in The Netherlands. However, their success was build on the community they build on IG and influencers. I'd suggest trying to get a few of those along, your brand name and product will spread fast amongst the fitness niche..

I'm looking forward to the product you have developed.

Ruben
 

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Kid

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We pay them, they make the product. Great. We sell a bunch of them, now what?

What incentive do they have NOT to sell our mold to every factory down the street, now that they know the product is a "winner" and is doing volume?? How can this be prevented?

@Walter Hay wrote good tactic,

If product is successful there's little you can do to not get knocked off.

The strategy that can mitigate it a bit is have a brand and not a product.
So if people think "New Gym Item" they think "GravyBoat's TM"
 

GravyBoat

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@Walter Hay Thank you VERY much for that advice.

Is it difficult/expensive to have them re do the mold AFTER the initial product run?

Is there a time frame where the factory will deem the product "successful" if we re order "too quickly" ?

In other words, if we sell the innitial production run quickly, can we do your trick at that point, or is it already too late?

Is it already too late RIGHT NOW that they have our schematics?

Is having the logo / brand name in the mold enough, or would you make sure the website URL is there? I ask this because we have a hyphonated url right now with a - in the middle... not ideal but the non hyphenated URL is like 5k. I'll gladly buy it once I prove it's worth my money but not right now in a testing phase.

Our plan now is to recieve samples, if they are good, get the logo / brand imprinted in the actual mold (no insert), then crank a production run. Thoughts?
 
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iizu

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@Walter Hay Thank you VERY much for that advice.

Is it difficult/expensive to have them re do the mold AFTER the initial product run?

It it is a mold for injection molded plastic part, then you could have them machine it in the mold. The text will be elevated from rest of the part.

If it's a tool & die for metal part, then it can cost you a bit more, because you possibly need to have both of them done (tool & die). It might be impossible to make since they would need to line up perfectly.

I think they are going to make you pay large in any case, but if you can actually have them insert your text directly into the mold(like Walter said), it's probably worth it.

Edit: Also, molds don't last forever, so you need to make another set anyways at some point.
 

Walter Hay

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@Walter Hay Thank you VERY much for that advice.

Is it difficult/expensive to have them re do the mold AFTER the initial product run?

Is there a time frame where the factory will deem the product "successful" if we re order "too quickly" ?

In other words, if we sell the innitial production run quickly, can we do your trick at that point, or is it already too late?

Is it already too late RIGHT NOW that they have our schematics?

Is having the logo / brand name in the mold enough, or would you make sure the website URL is there? I ask this because we have a hyphonated url right now with a - in the middle... not ideal but the non hyphenated URL is like 5k. I'll gladly buy it once I prove it's worth my money but not right now in a testing phase.

Our plan now is to recieve samples, if they are good, get the logo / brand imprinted in the actual mold (no insert), then crank a production run. Thoughts?
Yes remaking the mold after it has gone into production will cost more than having it done when the mold is first being made, but it can be done. I don't think it is too late if you are concerned about competition.

To secure the die for your own use that cost is worth considering, but you would still need to tell them you will have an inspection service examine it. You should consider actually paying an inspection service to do the inspection in case the supplier calls your bluff and uses an insert.

The URL alone is sufficient to identify the product as yours and serves as a way to advertise if you are selling on Amazon.

There are ways to add integrate brand name and/or URL after you receive the goods. That helps advertising but is obviously not going to stop your supplier using your mold to supply your competitors.

Walter
 

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