If you have been in the product business for more than a year, you’ve likely discovered that very few products invented by entrepreneurs are profitable. TV shows like Shark Tank and authors promoting “get-rich-on-your-idea” books make it sound glamorous and easy; but, taking a product to market is a long, uphill battle that most people aren’t prepared to fight. After carefully monitoring over 200 products invented by moms the past four years, I’ve seen only a few turn real profits. Sometimes it is the product itself that makes it a winner, but there are other factors that can increase the odds of success.
But, you don’t have to invent the next As-Seen-on-TV hit to build a profitable company. You do have to understand the challenges in the market and know how to overcome each one.
Let’s face reality. Even if you followed all the recommendations of the business coaches and experts, and avoided making any costly mistakes in manufacturing, packaging, or marketing, the odds are that you’ll still be trying to recoup your investment in two to five years. It’s just a matter of odds. Most products fail. Shark Tank Investor Barbara Corcoran recently told Sean Hannity (interview starts at around 17:00) that only five of the 28 businesses she has invested in “are really capable of pulling it off”. And, those are ones that received investment, exposure and quality mentoring.
I’ve spoken to dozens of *serious* mom inventors, ones who had great ideas, educated themselves, and stuck with it. They’ve shared their back stories with me –- not just how they came up with the invention, but what their finances have been like over the years. Although businesses can look “successful” on the outside, the struggles for profitability run deep. But, there are some products that are doing better than others. Some even lead to the sale of the company, licensing deals, or steady revenue that provides ongoing salary to the inventor.
There is a simple and obvious recipe for building a profitable business:
- Have a great idea
- Get the money to produce it
- Manufacture inexpensively with good margins
- Market it flawlessly
- Sell lots of it with top margins
There are also a lot of pitfalls. The goal is to make money, not lose money (watch for my post on common ways entrepreneurs lose money). But, how much money?
One inventor may be happy with a couple hundred dollars a week in extra income, another may want to build the next holiday must-have. Regardless of your personal goals, there are some characteristics of successful products that may not be instantly obvious. No single one is a sure factor of success, but a combination of the right ones can increase the odds of long-term profitability. Whether you already have a product on the market or are considering manufacturing one, test your concept against the following attributes that often lead to success:
1. No Explanation Required
If you see a product and immediately think, “wow, I should have thought of that” without anyone saying a word, no explanation is required for it. It sells itself. A sauce pan lid with a built-in strainer, or a neck pillow combined with a sweatshirt hoodie are great examples of no explanation required. The customer sees it and gets it. This isn’t something you generally think about when inventing a product, but it becomes a top priority when you build your marketing plans.
If a demonstration is required or if it is introduced to the market as “like something, only better because of _____”, there’s a huge disadvantage for selling online or on the shelf. One of my favorite mom-invented products is the Baby Dipper Bowl by Barbara Schantz. It’s a uniquely triangular-shaped bowl with a no-slip base. The graduated internal surface of the bowl draws food down to one corner allowing children to scoop more easily and moms to feed with just one had. Brilliant. But, the usefulness needs to be demonstrated to be truly appreciated. When a product is in a package on the shelf, there is no one available to show how special a product is. This is a common problem for inventions because the nature of inventions is to improve something that already exists. Improving on what exists often means higher prices or the need for explanation. Do customers know what your product is and does right when they see it?
2. Wearable or Used in Public
What’s better than free word-of-mouth marketing? If someone is wearing or using your products and another potential customer sees it, that’s free marketing. Small businesses can’t afford large-scale marketing campaigns, but can benefit from marketing the same way bigger companies do. These highly visible products are also ones that can benefit from celebrity sightings. A couple mom invented products that are well-deserving of this kind of public display marketing include Sticky Bellies Milestone Stickers and SwimZip, fashionable UV swimwear with zippers. The best thing about wearable products is the pervasiveness of cell phones and social media: Having your product photographed and shared between friends is some of the best kind of marketing – and it is free! Do your potential customers see your existing customers using your product?
3. Not Easily Copied or Replaced
Do I need to buy that from you? Or, could I buy something similar from someone else that does almost the same thing? Can I make it myself easily? Sometimes inventors love their products too much to see when it fails this test. Yes, your $10 specialty thing may be perfect for what it does, but if a customer can buy something almost as good at the dollar store, will she really pay that extra $9 for slightly better? Probably not. These products appear all the time. Sometimes, they even do well for a little while. But, if they aren’t followed up with lots of positive reviews and word-of-mouth marketing, they fade fast. I recently bought a “fruit cutting kit” my daughter wanted for making melon into hearts and stars (and making a huge mess). I paid around $12 for the “kit” and found it was less effective than simple metal cookie cutters I already had. I’m sure I’ll see those kits in a dollar store soon along, right next to the As Seen on TV “Eggies” for making hard-boiled eggs. You may be able to fool a few people into paying for a perceived better product, but you need to look at your product from an objective opinion. If customers think they can replace it with something cheaper, they will. How easy would it be to replace your product with something almost as good?
4. A Clever, Memorable Brand
Also known as being “viral”, being a brand that is talked about is another form of free marketing. Something fun or witty about your product or brand makes people remember and desire it. One of my favorite examples is Poo-Pourri, a line of bathroom sprays. It’s funny, clever, and can be taken seriously as a product or it can be gifted as a joke. Another similar play on body humor is Boogie Wipes, saline wipes for noses. I remember buying a pack as a joke before I knew the founders of the company. The brand is obvious and says what it is – the shock value makes it memorable. Will people remember the name of your product or brand easily?
5. Emotional Appeal
Does your product trigger emotion through a customer’s fear, nostalgia, or other emotion? Does it make them feel safer, more beautiful, accepted by others, or some other human need? When marketing to moms, consider maternal instinct. Moms want the best for their kids. Buzzy, a personal pain relief product used during injections definitely appeals to a mom’s desire to protect her child from pain.
Organic and “green” brands also appeal to moms who want the best for their families and the environment. Consumers want to support businesses that share the same values. When people see your product, which emotions or values are stirred?
This one is tricky, but such a huge advantage if you have it. Two mom-invented products I have seen do exceptionally well by being searchable are Easy Lunchboxes, clever bento-style reusable lunch boxes and SmartSeat dining chair covers. Neither of these products attempt to battle the brick and mortar retail space. Instead, their products are sold completely online. And, the sell well. SmartSeat solves a problem that customers seek a solution to – protecting chairs from stains. So, when a consumer searches “chair cover”, they find SmartSeat and the fabulous reviews. Similarly, Easy Lunchboxes are a top seller on Amazon.com. Customers naturally search for the term “lunch box”. When they do so on Amazon.com, the first listing they find is Easy Lunchboxes. Again, positive reviews are also important, but the point is that the products are discovered through search. These are direct searches – the product name or description is part of the key word search. If you’ve created a totally new product that doesn’t have search terms, you have a challenge ahead of you. You may need to work with a specialist on finding the right search terms and optimizing your site and product listings. For example, another favorite product of mine is The Quick Split. It’s a food cutting device that’s perfect for travel and carrying in a purse or diaper bag. But, not many moms will search for a “diaper bag knife” or “portable food cutter”. But, they may search for “diaper bag essentials” or “food for toddlers”. What words would a potential customer need to search in order to find your product? Is it a common search?
7. Portable, Easy to Ship
The cost of mailing a package continues to rise. Whether you ship direct to customers or to a retailer, you need to be sensitive to shipping costs. The size and weight of a product can quickly affect the cost of goods, margins, and price of a product. You don’t always have a choice on this one. If that’s the case, be sure to factor transportation from factories and to retailers in your cost of goods. It’s a cost that is passed on to the customer which may result in your product being high priced — especially if you are a small company that does not benefit from volume shipping rates.
Some things can’t be made small. But, you can consider packaging as well. The trend is for less packaging, especially for items sold online through sites like Amazon. Le Bibble, an adorable dribble catcher for baby bottles, made a switch from a cute bottle package (which was fun but did not demonstrate the product well), to a flat package that is not only easier to ship, but also more useful in showing how the product works.
When I started was building an ecommerce site, some of my consultants told me about a great product they thought we should sell – the Little Looster, a large, U-shaped stepping stool for potty training. It’s a brilliant invention by a friend of mine. Since we both had small companies and low volume, shipping the product would have cost us as much as the product itself. It wasn’t worth including in our product line. Likewise, retailers were hesitant because of the large amount of shelf space required.
On the other hand, flat, easy-to-mail, and easy-to-display items are desirable by retailers with limited space and tight margins. Is the size of your product going to create additional challenges for you? or, will it be an advantage?
Consumable does not mean your product has to be edible. It means it has a deadline for replacement. If a customer uses up or consumes your product, she needs to come back for another one. That equals more sales. Selling to an existing customer is much cheaper than acquiring a new customer. Consumables are often higher-volume items which also provide more room for different marketing strategies like sampling, introductory prices, and coupons. These products can be anything from personal care products like Lovey’s to items that wear out need replacement like clothing and hair accessories.
One of the biggest mistakes that inventors of non-consumables make is marketing their products as if they were consumable. For example, if you sell a baby sling or make a specialty item like bridal shoes, you must be careful to not drastically drop prices to acquire a customer. Once the customer buys a non-consumable, they do not need to return to you unless you have a different product to sell them. Consider this before participating in flash sales, deal sites or publicity that requires a lot of free products. Are your customers going to come to you once or will they be back? How much does it cost for you to acquire a customer?
9. Related to a Cause or Community
Smaller markets are actually easier to sell to than mass markets. Competition is generally less and the communities can be identified and reached directly. The cloth diaper market is one such community. There’s no point in selling cloth diapers to a mass market that has traditionally relied on disposables. But, introducing a new cloth diaper or related product to the cloth-diaper community does make sense. The inventor of Spray Pal was able to leverage community marketing to make her product successful. Spray Pal is used for cleaning cloth diapers. When developing a marketing plan, it was obvious that placing an ad in a national baby magazine wouldn’t make sense, but creating strategic partnerships and cross-promotions with cloth diaper companies is perfectly targeted marketing for an item used by parents who buy cloth diapers.
Similar marketing success based on causes or communities include products designed for children with special needs, medical devices, and even products marketed to military families. Are your customers part of the mass market, or part of a community? Do they have a common cause?
You can sell a cheaply made product once to a customer. On the other hand, quality creates loyalty. Let’s consider quality in clothing. In general, sewn products have poor margins, especially sewn products made in the USA. They are expensive to manufacture. As a result, some companies choose to go overseas, then cut corners on quality and produce for the masses. There is room in the market for lower quality products because consumers often seek out low prices. But, some consumers only want high quality. Rock-a-Thigh has shown us how a commitment to quality is a good business strategy. Unlike cheap knock-offs, Rock-a-Thighs are known for quality and being made in the USA. That quality creates repeat customers and referrals, which results in increased sales. Quality pairs well with Consumable. If your customer has a good experience with your product the first time, they will come back when they need a replacement. Are you offering high quality? Can you make the margins you need while maintaining your level of quality?
11. Low Manufacturing Cost
Again, this isn’t something you can always control. But, definitely think about it before embarking on your manufacturing journey. Some products can be manufactured in small quantities, some can’t. Plastic, metal and other parts that require molds or machining generally require a large MOQ (minimum order quantity). This means you will be investing a lot of your cash upfront for inventory. Sometimes that’s okay, but when you do not have a lot of funding, this can be a struggle. If your cash is tied up in inventory, you may not be able to invest in marketing and retail channel development.
High-volume products also have an advantage: as you grow, so do your margins. A company with funding for large-volume manufacturing has the potential for much faster growth.
The “safe” way to develop a product is to start small. Make a few, sell them, make more, sell them, make even more, etc. Sites like Etsy, Ebay and Amazon provide paths for this kind of low-scale manufacturing and selling. Unlike retail chains that may need inventory for thousands of stores, you can start as small as you need to, based on your budget. This strategy can lead to some of the best businesses. Sales of The Wrap by Solly Baby started through an etsy store. Now, they are available in upscale boutiques across the country and featured in a variety of pregnancy and style magazines. Have you created a budget to see how much you can invest in manufacturing and marketing? Are you prepared to have tens of thousands of units stored while you work on marketing and sales? or, is there a way to start small, prove the market and grow organically?
The market always has room for necessities, but people enjoy buying something that gives them a sense of joy. With women controlling over 80% of consumer spending, consider what women like to buy.
Having a product that is not only needed, but also fun, can lead to fast sales. For example, many of the products in the “baby” market are given as gifts to new moms. While a diaper wipe warmer or baby swing may be practical, friends and family enjoy giving gifts that that are cute, expressive or fun. Mustache pacifiers, onesies with funny quotes, or these lollipop teething rings are perfect examples.
Novelty items typically sell at higher prices than their practical counterparts. We buy them as gifts
or impulse buys. One of the best selling items for Mother’s Day and Christmas this Mom’s Sippy Cup. A regular sippy cup would be more affordable, but, that’s not really the point, right?
There are ways to make a practical product more fun. Offer fashionable colors, unique packaging, or clever marketing. Think about other items it could pair with yours to make it fun. For example, the Joe Jacket insulating beverage sleeve comes in a variety of different trendy patterns and pairs perfectly with a Starbucks gift card. Promoted for mom’s who love coffee or teachers who deserve a break, the fun factor helps make the sale. How fun is your product? Are there ways you can make it more interesting, fun, or enjoyable to buy? to give as a gift?
If you have all twelve of these attributes covered, will you have the perfect, most-profitable product? Perhaps! If you do, let me know. I’d love to be a reseller! But, even if you only have a couple, remember to focus on those attributes and use them to your greatest advantage.