There are so many people who believe that owning a product is like possessing a pot of gold. Which couldn't be the farthest thing from the truth. It is like saying all you have to do is buy a couple hundred bux in window cleaning equipment and you instantly have a thriving business. There is just as much effort, possibly even more in generating a product development and sales business.
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Over the years I have been in association with some people that have done very well with product development and sales. And have learned a great deal. The first thing of course is creating a product. You should never build a product first and then look for a market. Rather look at your market and ask what does it want;...badly. Than develop that product. It will have to be competitive with other products that are similar. Or it will have to be in its own category to catch a higher price. You will want to develop chemical products so they will last at least six months on the shelf. Chemical products are difficult too because of the expense of the ingredients. Almost always you will have to buy at the very least 55 gallon drums of your liquids and an entire pallet of boxes of dry ingredients. If there are ingredients that only make up 2 percent and you have to buy at least one drum you will have to sit on it for a long time. This is part of the structure already established in the chemical industry. And they will not budge. They just don't care. Because it is all about profits. These companys are required to buy entire truckloads of 55 gallon drums at a time. So they don't want to drain single drums into five gallon or one gallon containers. Further it you do find a way to buy a fifty pound box of powder or a five gallon pail of a liquid ingredient, you could easily end up paying five times the price per pound or per ounce. Which would dramatically disrupt your pricing structure if you were attempting to compete with a similar existing product. This is even true when building tools such as water fed poles or squeegees. If you are outsourcing the manufacturing process you will need to seriously consider that expense. Which is the reason why people move to China. It isn't even a question. It is necessary to be competitive. The materials are less expensive and so is the labor.
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You must consider what the sum of all your expenses are to build your product. Whether it is a new type of squeegee or a new window cleaning soap. Everything must be figured in. Even the label that goes on the bottles. Or the cardboard that holds the squeegee. Then you will need to multiply that cost by 4.5 to 6 to get the end retail price. If you intend to sell enough, and not have to deal with sending them out yourself, you will need a distribution network. At least one good distributor. Lets say you have a product that will retail for a dollar. You will then have to sell it to the distributor for fifty cents. So if it cost you twenty cents to produce you will be making about 30 cents per unit. Less what it cost to ship to your distributor of course. Which is the reason why manufacturers like five hundred dollar orders. It minimizes the cost of shipping per unit item and increases the profit margin.
There are many expenses which you would not think of at first. Including business insurance. It is called product liability. And is based on how much product is sold during the year. When you are first starting out you must guess how much this will be. You will not want to pay too much so will have to get insurance for as little as possible. The best way to get the best deal is shop around. Or ask someone you know that is in a similar business.
Following this model is not a bad idea. In fact it is a very smart thing to do. Learning from other peoples mistakes. Take for example the work that distributors do. You might think all they do is buy a product then turn around and sell it for twice the price. What do they actually do? Well one time I tried to sell products direct to the end consumer. You would not believe the problems you will have with USPS, UPS, Fed X, and every one else. Packages show up ripped into, empty, or not at all. The expense of shipping especially internationally can be totally prohibitive! The cost is so great that no one would pay it. Distributors have to deal with all of this every day. It becomes a business of solving shipping problems. Along with many other problems that you just cannot imagine. Believe me distributors earn their money. I would NOT want their job. So the model says use distributors. They are your best friends.
I am looking to do things different. Although I am not looking to develop products in the conventional way. I am rather looking for products or ingredients that have already been developed. Then develop different tests to locate the most effective for specific problems. This technology and these tests I am going to show on my YouTube Channel. Then if someone would like to try out any of these products or ingredients themselves I will supply them at a small fee. All of my seminars/webinars/interviews will be posted on the Glass Smart YouTube Channel. Here I can post very short one to five minute videos. These will be much easier to produce instead of webinars that would be around 45 minutes. Seminars too would require a lot of travel and would be very limiting. But the YouTube Videos will go around the planet. There will be no limit to what I can accomplish with the computer. Also I can locate special ingredients and powders that can be purchased in much smaller quantities at prices equal to or less than commercial products. There are literally well over a hundred different products right now that I would like to bring out. But if I had to do it the conventional way it would take forever. This will be like a virtual flood.
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Think of this for just a moment. Why do you get excited over a new product? Simply because you are looking for it to help you to do the job in less time or at a lower cost. It might even make it possible for you to offer a service that someone else cannot. Because they just don't have the tools. Either way the end result will be greater profits. This is what I am proposing to do here. Are you interested in following me down? If so then subscribe to this blog, and subscribe to the new YouTube Channel.
Written by Henry Grover Jr.
henrygroverjr@gmail.com
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