How Great Products
Create Great Profits!

If you make a better mousetrap, the world will not necessarily beat a path to your door. There are a lot of great products that never made a profit because the people who might have wanted to buy them never heard about them. If you do a great job of marketing a product that serves a need, and you've got a reasonable profit margin, you'll be successful.

Your product is just one part of the "marketing mix" which helps determine whether customers will buy it. Promotion is how you tell your targeted customers what the product is and how it can benefit them. The channels of distribution are the ways in which the product gets to the customer. The final part of the marketing mix, price, has to be high enough to make a profit or you will not have a successful business.

Innovators, the first people who will buy your products, will pay a higher price to have the first product to the market (other customers, later on in the product cycle, will refuse to pay a higher price). If you set too high a price you risk having competitors decide to enter the market with another product. Ideally, as you make more of your products, you'll find ways to improve the product and reduce the costs. This will lead to a declining price for your product at every stage until it reaches maturity. One of your goals is to stay ahead of your competitors so that you always know how to make your product a bit better and a bit more inexpensive than your competitors.

The next step in your plan to make profits is packaging your product. It is important to have the product be attractively displayed in its package and to have the package tell the story, particularly if your product is for the consumer market. Think of it as using the package as a salesperson. It's got to be able to tell the user what the product is, how it can be used, and why the product is a better choice for him or her to make. Give your product a good name, one that's easy to remember. A great name will help you build brand recognition so that your buyers will be able to ask for your product rather than "something that does..." You may want to find a co-packer that will package the product for you. They'll have the machinery and the know-how to make your product look professional.

You've got to think about how the product is going to look and where it's going to be displayed. It may be worthwhile to create displays that attract attention and tell the story for you. Go into a store that sells products like yours and check out the competition. What catches your eye? Why did it catch your eye? What can you do to get that kind of attention for your product? There are firms that specialize in creating displays and it's certainly worth checking with them.

Your packaging is part of your promotion. Promotion is what you normally think of when you're setting your marketing budget. Advertising, public relations, salespeople, sales training, samples, sales materials, contests, sweepstakes, shelving fees and cooperative advertising are all areas that help you communicate with your customers. It's how you educate customers about the value of your product and how you get them to try it.

How the product gets from you to the final user is distribution. There are many different channels of distribution and you need to become familiar with what's done in your industry. Are there wholesalers who handle most of the products? You'll need to find out everything you can about how products are sold in your industry and find a person you can work with inside the wholesaler's organization. Or, you may need to find a manufacturer's representative who already knows the wholesale customers in his or her territory to sell your products into their accounts. Manufacturers representatives can be costly but they can also get your product into business relationships that they've spent a long time developing and nurturing. Remember to listen to what they have to say--they can provide you with valuable information about what their customers want and they already know what the standard for business is in the industry that they serve.

Shipping is important, too. The other businesses you work with to distribute your product can make or break you. You will need to rely on fulfillment companies, shipping and delivery services and your resellers. They've got to be as good at their job as you are at yours. You want them to operate in virtual partnership with your company and you need them to handle your customers as well as you could yourself.

How can you tell if they're going to be good? Word of mouth is a great way to find good fulfillment services. There are companies that maintain a stock of your product, then ship as ordered to your customers. Ask other businesses in your area which ones they use and whether the service has been good. Review your personal experiences with shippers and look at the total package that they offer. Whether you've got a container load of product to ship at a time or small packages, your product will be out of your hands while it's en-route to wholesalers, middlemen and reseller (or, if you're selling directly, while it's traveling from your basement workshop to the final user). You also need to plan for handling returns whether there's a defect in the product or if stock is returned. Plan for this and be able to recover some or all of the costs involved by having a way to sell closeouts.

Good luck in making your great idea into a business and income that you enjoy. We would love to hear from you about your experiences, so please let us know what's happening in your business! If you're willing to share your successes and setbacks with the Small Business Bytes community, we can all learn from your experience.

Tip: You may want to check out www.iship.com which lets you compare rates from major shippers, including UPS, FedEx, Airborne Express and the U.S. Postal service. You enter the customer's ZIP Code and see a table with prices, delivery times and options like next day air for the carriers. If you choose UPS, you and your customer can track the shipping status of the package through the iShip site. It'll make you look like a big business to your customers.

-Cynthia Nemeth-Johannes

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