When I speak to those of you who are looking at creating a physical product, how much money do I need (and where do I get it) is a common question. It’s also (understandably) a big concern.
While I can’t give you an exact figure, as there are so many variables, I can tell you what costs to expect and how to find them out, so you don’t end up with any nasty surprises…
I’m actually going to cover this in two parts (over two weeks), as this is such a big topic. I also think there’s another side to this, which is ‘will anyone buy it and what will they pay?’
Before you think “how’s that relevant?” and close this browser window down, please hear me out.
My reasoning here, is that it’s a bit less scary spending that initial money if you know you’ve got a product that will sell well and make a good profit. If you have no idea, then it’s a huge gamble. So, before we go about finding out what it’ll cost, I want to talk about the first step I think you should go through…
Validating your product idea
Before spending any money, I would suggest doing some validation to see whether your product has the potential to make a profit. It doesn’t matter how much (or little) it costs to create your product if you’ll never see a penny of it again. Having an idea of whether it’s something people will buy, and how much they’ll pay, can help you feel more confident about investing the money in the first place.
Remember, I’ve been there! I vividly remember how scary it all is – especially the part where you put down money. To this day, I still get a little anxious every time I pay the deposit, or balance, for a new order.
I also wish, knowing what I know now, that I hadn’t been so secretive about what I was doing and that I’d asked for more input earlier on, so I felt a bit more confident.
I was so scared that someone else would take my idea and run with it (another fear I hear often!) and again, knowing what I know now, I’m not sure why. So few people will actually go through with this. I can’t stress that enough!
Let’s get started with the validation.
My number one solution to finding out if someone will buy your idea, is to find your ideal customer and ask them!
So who’s your ideal customer?
We might need to take a step back here. Unless you know who your customer is (i.e. who your product is for / who will be buying it) you won’t know who to ask.
For example, if you’re creating a product for new Mums, your Grandad won’t necessarily be the best person to give you feedback…
Who’s it for (and who will buy it)?
There are actually two separate things you need to think about. Who’s the product for and who’ll be buying it?
Using my products as an example, they’re for babies and toddlers – however, the people likely to be buying them are new parents and people buying gifts for new parents. (Based on my research, these are usually also parents and grandparents.)
Remember, the person who’ll use your product and the person buying it might be different – and it’s worth thinking of both. However the person spending the money is ultimately your customer!
Thinking this all through gives you a huge advantage.
Building up a picture of both your end user and your customer, and finding out what’s important to them, helps you to develop both your product and your marketing.
When it comes to products, people are buying a benefit or a solution.
What do I mean by this?Here are some examples, using my own recent Amazon purchase history as an example (not all items pictured!):
- I brought these swimming goggles, as my son’s outgrown his (and the reviews say they don’t leak).
- I brought this patterned yarn, as I’m crocheting a scarf and don’t want to work out the pattern myself.
- I brought these friendship bracelets and playdoh, as I needed birthday presents for parties at the weekend.
- I brought this eyemask, as my husband needs complete darkness to sleep well (or he’s grumpy!), plus it’s silk so doesn’t leave marks on his face.
- I brought this eye cream to get rid of my dark circles.
You get the idea!
You need to be thinking about the following question:
What problem does my product solve / how does it make my customer’s life better?
I’ll give an example using my own products.
My 100% bamboo muslin swaddle blankets are HUGE. They can be used for so many things, making them a must-have. Rather than having to buy a breastfeeding cover, and a changing mat cover, and a blanket, you can use this one product for everything. Plus, there are four of them, so you can always be using one, have one in your bag, one in the wash, etc.
My bamboo hooded towels are also HUGE. This solves the problem of buying towels for a newborn that only last 6-8 weeks. The hood keeps your baby’s head warm and bamboo is soft and extremely absorbent – just what your baby needs after getting out of a warm bath.
Hopefully this gives you an idea! If you can’t describe your product in a way that clearly demonstrates the benefits you might need to give it some more thought.
Of course, it’s ok not to know too – as when you start speaking to your potential customers about your idea, you can ask them some questions to help determine what’s important to them.
Ok, so now I know who my product is for, and perhaps why they should buy it, where do I find them?
Well, chances are, if you’re creating a product to meet a specific need, you already know some of your potential customers already.
And if your product isn’t meeting a need – i.e. you’ve just had an idea you like the sound of, you might need to rethink it or at least think it through in more detail and think about the questions you can ask your customers to help you work it out.
Now you know who your customers are, the next step is to run your idea by them and get some feedback and input.
There are a few ways you can do this, depending on the stage you’re at.
If you can get infront of your customers, either in person or virtually, (for example, in a Facebook group) tell them about your idea and ask for their input. Ask questions like:
- Have you ever brought an X before?
If not, why not?
- If yes, what did you like about it?
- How do you feel it could be improved?
- What did you pay for it? Was it worth that?
These are just examples. Please do add in your own.
You might want to ask questions like:
- If you were buying an X what features would you be looking for?
- If you were looking to buy a Y what’s the most important thing to you?
You get the idea!
Show prototypes / samples
If you have a prototype or sample you can share, then do! Ask similar questions to the ones above, only using your product as an example. i.e.
- What do you like about this?
- How do you think it can be improved?
- What would you pay for it?
A note on price
It’s worth mentioning here that ‘what would you pay for it’ is a really useful question. I recommend working out your selling price before you find out what it will cost to produce it. That way, you can make an unbiased decision – rather than setting the price to cover the costs – which could prove to be a costly mistake if you price yourself too high.
Other ways to get input
If you’re not quite ready to get in front of people, or you’re struggling to find them, more passive ways of getting some validation for your idea include:
- Looking up reviews for products similar to yours and seeing what people say about them
- Looking in forums – i.e. looking on Mumsnet for posts around which muslins to buy
- Looking at sites such as Amazon to see how well products are selling. (For more on exactly how to do this, download my free guide.)
Pre-sales – fund your production costs!
The ultimate goal here would be to get some pre-orders and make some money before you’ve even created anything!
Just to stress, only actually take money if you know you will actually have something to sell OR you’re prepared to pay back every penny you take.
But, if you’re feeling confident, why not try to pre-sell your product?
You could offer a great discount to anyone who buys before a set date (an earlybird deal, if you like).
There’s no better way to find out if someone will genuinely buy something, than asking them to put their hands in their pockets and hand over some cash!
Feeling more confident?
OK so now you have an idea of who your customer is, how your product will help or benefit them, what’s important to them, plus what you can potentially charge.
You’ve taken a huge step and hopefully feel much more confident about spending the money on producing your product (once we find out how much that is).
Make sure you check out next week’s post for exactly what costs you need to consider and how to calculate them.
In the meantime, for even more FREE ways to validate your product idea, download my freebie here.
Next week, we’ll go into detail around working out the exact costs involved in creating your product.
Are you interested in my course, launching in Spring 2018? It’ll take you through every aspect of creating and launching your product, step-by-step. Sign-up here to be among the first to be notified once it’s ready.