What should you do when you get a great idea for a product? Research, Research, Research…..and here’s why…
1. You don’t know if your Idea is Unique.
When you come up with an idea for a new product or invention, you are doing one of two things – you are solving a problem or a need that has never been solved before, or you are solving a problem in a better way, and it’s entirely possible that someone has already come up with a solution that is the same or similar to yours.
Before you go ahead with your invention and spend your valuable time and cash on your project, it’s essential to research whether your idea already exists.
Lori Greiner, Shark Tank panelist and entrepreneur says;
“If there’s one mistake I see entrepreneurs make over and over again, it’s to believe so strongly in their invention that they never bother to make sure it’s as unique as they think it is”
This doesn’t mean just checking the market place to see what’s already on the shelves, it also means researching what has already been patented, or is patent pending”
2. You don’t know what competition you have
If you believe that you are improving on a product that already exists, then it’s a good idea to check out the competition.
What kind of market share does it have? What does it cost? Where is it sold? What makes your idea better than the one that already exists? And will the market care?
One of our close friends invented a saddle rack. It folded down into a convenient carry case, it was sturdy and high quality. The rack retailed at $99, and at that price, our friend made a reasonable profit. However, sales were low.
If our friend had researched the competition, he would have discovered that a saddle rack already existed and was being sold for $39.99, less than his unit cost of production.
The competing saddle rack was a much lower quality product, and didn’t come with a handy carry case….but the market didn’t care! The lower quality saddle rack “solved” the problem at a cost they were willing to pay!”
Just because your product is more efficient, better quality or comes with more accessories, your target market may not give a hoot, if they already have a product that sufficiently meets their needs.
3. You don’t know if you have a market
And if you do, you don’t know anything about them.
Firstly, you have to know if you have a market for your idea, and this is tied closely to #2; finding out about your competition.
If you do have a market for your product, find out as much as possible about them! Are they male or female or both? Young or old? What are their shopping habits? Are they on social media?
All this information should help you with your design and prototyping, your marketing, your packaging and where and how you ultimately sell your product.
4. You don’t know if there are barriers to entering the marketplace.
By this, I mean certain rules or regulations. For example, does your product have to be certified or inspected before it is sold? Are there safety standards that have to be adhered to? Does your product have to be manufactured in a certain way?
These barriers will dictate how you produce and sell your product. Which leads us to….
5. You don’t know how you will manufacture your product.
Will you manufacture your product at home? Will you need specific equipment? Do you have the correct municipal zoning to carry out production?
If you are going to contract out your production, you will need to research your options. Choose your manufacturer carefully – what are their lead times? What is their quality like?
And most importantly……
6. You don’t know how much it will cost
You have to fall in love with your numbers. Research how much it will cost – get quotes from manufacturers if you are contracting out your production, or get quotes from suppliers if you are building your products at home.
Remember there will also be costs for prototyping, Research and Development, setting up your company, marketing, packaging, as well as expenses such as shipping, travel and utilities.
You must identify how much it will cost to produce one unit of you product, because at this point……
7. You don’t know how much you will sell it for.
You have to make a profit. Or why are you doing this?
How much you sell your product for is dependent ONLY on what people are willing to pay for it. They don’t care how much it cost you to build. So you must know your market, know your industry, and know how much your market will be willing to pay.
Sometimes you can price your product too low.
We did that with our Ace Line Hauler, a piece of equipment designed to haul prawn traps onto a fishing boat. It was marketed to the Sports fishing industry, initially for $599 per unit.
Sales were slow, until we realised that the market perceived the low price point to mean that the product was low quality.
We raised the price to $899, and they flew off the shelves.
8. You don’t know how the big players operate
Finding out about the Big Players in your industry will help you make the best strategic business decisions.
A local producer of gourmet pet food was trying to sell her product in the big box stores. Every time she stocked the stores, Purina, one of the largest manufacturer and distributor of pet food would undercut her on price. Or they would have “Two for one” offers.
Eventually, our local producer pulled her product from these stores, and sold exclusively online or at private boutique “doggy spas”.
Her sales improved, and Purina was not able to compete.
9. You don’t know how (or where) you will sell your product.
Researching the Big Players will help with that decision. Will you sell direct to the end consumer – requiring your own retail outlet, or e-commerce site, or will you distribute to retailers?
If you go via the retailer route, you will need to research the best retailer to approach, their criteria (Costco for example has strict guidelines for their vendors), and be prepared to pitch your product.
You will of course be selling at a wholesale price – the retailer has to make some money too, and you may not have much control over your marketing or packaging, or the retail price.
If you decide to sell direct to the consumer, then you are wholly responsible for your marketing. Selling online may be an attractive option, as there is very little overhead, but the online world is very crowded, and it may take a while before your sales get traction.
Finally…….
10. You don’t know if your idea is sustainable.
If the end game is to have a profitable and sustainable business, then your product must be able to stand the test of time.
Will there still be demand for your product after one year? Five years?
Are there other ways you can sell your product? Or can you make other versions – different sizes, different colours, or different functionality?
How long can your business last, and will you be able to make a healthy living?
It’s impossible to forecast the future, to know what external forces may impact your product or your fledgling business, but the time taken to conduct research at this stage, will save you time and money.
Happy Inventing,
Bob & Jackie.
