In today’s competitive climate, it is not enough to sell the same products as others in the market and hope to beat out the competition with pricing or advertising alone. If you want to be a market leader, you must design products unique to your business. This not only sets your products apart from the generic ones out there, but also increases your chances of drawing in a loyal customer base that will engage with your business and invest in your products. The better you understand your clients and what they’re looking for, as well as what’s already on the market, the easier it will be to design, produce and sell your own distinctive products.
Why should entrepreneurs develop their own products?
Product development is not a new concept. Many people have tried to develop their own products but ran into roadblocks and lacked the confidence to proceed. The main reason companies opt to develop and sell their own products is due to the limitations that come with product trading. There are many variables out of your control.
Here’s what leads entrepreneurs to develop their own products:
- Entrepreneurs are tired of being like others. Anyone can sell a product they didn’t make. What makes them so special?
- Entrepreneurs can gain higher margins by selling their own products. For most offline and online retailers, pricing is a race to the bottom.
- Entrepreneurs are unable to evolve their brands otherwise. Custom products will improve your brand awareness. People would rather have something unique than an existing product that is flooding the market and has many different sellers.
- Commonplace products earn poor customer loyalty. When everyone is selling the same product, customers tend to look only at prices. Customers become much more loyal to companies if they sell a product that fully caters to their needs.
What are the limitations entrepreneurs face when creating their own products?
1. The sky is not the limit.
If you have competition, that means you can only sell a certain number of products. Factories are able to sell the same product to as many customers as they can find. In the eyes of both suppliers and buyers, you’re not a high priority.
2. Non-product manufacturers face low margins.
When anyone can sell the same product you’re selling, the buyers turn your prices into a race to the bottom.
3. Entrepreneurs lack control over the supply chain.
When you don’t own the product you are buying, you have very little control of what can be added to the product. You receive what the supplier has made rather than something tailored to you and your customers.
4. Entrepreneurs’ businesses have almost no brand awareness.
What makes you unique when you’re selling something that anyone else can sell? Your brand will be forgotten if you cannot provide something distinctive. Developing your own product gives you the chance to take those limitations and turn them into huge opportunities.
Everyone knows the headaches and frustrations that come with developing a product. However, if you understand your customers and your competitors, taking the time to develop and launch your own product holds potential.
Bottom Line: To build a brand that stands out and increasingly attracts customers, design products that meet customer needs in a way that the market isn’t currently doing.
What are the opportunities you can take when developing your own products?
1. The sky’s the limit.
When you successfully develop and launch your own product, there is no end in sight. Being the sole manufacturer of that product gives you the flexibility to sell your products to anyone without the threat of a crowded playing field.
2. Entrepreneurs enjoy higher margins.
If you create a product based on feedback from your customers, they will be willing to pay a higher premium, since it matches their specifications. Since no one but you is selling this product, you’ll see higher profit margins.
3. Product manufacturers enjoy more control.
When you have control over your product, you’ll have the flexibility to make any changes needed to improve customer satisfaction.
4. Your brand generates awareness.
Listening to your customers and launching products that are catered to them will create loyal customers. [Read more about how your product packaging can win buyers’ hearts]
How should entrepreneurs start manufacturing their own products?
First, understand that successful product development depends on the fusion of two types of information: the need and the solution.
The need is determined by a company or individual that knows exactly what the market is missing. They might not understand how to develop or build that missing piece, but they know what it is. The best way to gather this information is to engage with your customers and listen to their feedback.
The solution comes from a company or individual that knows how to digest the needed information and bring it to life. These are usually engineers, designers, developers, or a factory that has the capability to understand what the need is and turn it into something physical.
As an entrepreneur, it’s your job to provide a clear description of your vision to the team that can turn it into reality. Remember that they won’t have a perfect understanding of your product, so you be thorough with your description and reasoning.
There is a myth that the development steps are long and demanding and could leave you broke. However, if you follow the correct steps and maintain transparency between the need and solution parties, the process will be smoother. When you get to the solution steps, you might not be the leader, but you should understand the process.
FYI: High-quality products increase your brand’s reliability and your chance of retaining customers.
The development process
Step 1: Product engineering and design
The first step the solution team must carry out is engineering a product as envisioned by the person or people who identified the need for it. This first step provided by the solution information is also the most critical step. If the engineering is done incorrectly, the product will never be functional and will have poor reviews. It’s imperative that the product design, materials and production are high quality.
To eliminate failures, design the most critical part first and test it. Make samples of this part to ensure that the product works as it’s supposed to. If it doesn’t, go back to the drawing board.
Step 2: Prototypes
The purpose of a prototype is to verify that the design works the way it’s intended. A prototype opens up many doors because you can start to market the product, take preorders, seek investment, or start a Kickstarter campaign to raise funds.
Step 3: Tooling
For the purpose of this article, we are assuming that you have built a relationship with your factory that will be building this product. If you’re lucky, your factory can also provide you with the resources to develop this product.
A positive aspect of product trading is that you never need to worry about opening up new tools. However, if you are the sole seller of this product, then opening up a tool is well worth the investment and the short amount of time needed to make the tool.
Remember when negotiating with your supplier that the tool is yours and that the supplier will not be able to use that tool for any other customer.
Tip: Look for what’s missing in the market and what customers need. This will make your products stand out and seem more attractive.
Step 4: Production
This is the moment that you have been waiting for. If you followed the steps above correctly, there will be no major issues. Keep in mind that minor issues can always occur with production, but stay calm and handle them as they come up.
>> Learn More: Do You Need Product Liability Insurance?
If you follow these steps, you’ll see a healthy launch that will lead to a long life for the product.
There is a lot of talk about whether or not to patent your product. If this is your first product you might be overly excited to patent what you’ve made. However, the best way to keep the market share is not by patenting your product – because those are simple to get around – but by consistently developing and launching new products. This is something that your competitors and factories looking to knock off products won’t be able to keep up with because they are still selling products that are in the market already.
Product trading can be a great way to build experience and see whether or not this is a profession that you wish to pursue. However, developing your own product is the only way to get to the top of the line. It’s true that many people have failed to develop products efficiently, but you can learn from their mistakes while going forward.
Additional reporting by Sean Peek.