Small Biz Start - Marketing, Profit Build, Brand Build...
I started a small side business a few years back in another market (bicycle products). Background: I made and sold bicycle chain lubrication products. Here are a few things that I learned:
1) Protect your product - Either with a Patent or Trademark. These are relatively inexpensive compared to what they offer.
2) You say that you are going to hire/use a contract manufacturing source to make your products. That is fine, but make sure you have a clause that spells out what happens if they or you don't fulfill the contract. For example if you decide to terminate business with them and go with a different vendor, they can come back after you for payment because of tooling or personnel that they may have acquired to make your product. Similar scenario for you if they breach their part of the contract.
3) How are you going to handle distribution? Are you going to hire a ship/package and distribution firm, like UPS, that will warehouse your product and when orders come in, package and ship it, or are you going to do that capacity. Again, you need a agreement with them in case something happens, such as a fire that burns down their warehouse, missed shipments, etc. If you are going to do it, some communities limit to what you can do as far as business from your house. You need to check this out.
4) There is a saying about advertising: Most of it is ineffective, but you typically don't know what you do is effective. Word-of-mouth is the least costly and best advertisement money can buy.
As far as advertising, attending Boat Shows on the surface seems like a good idea, and it is, but they are costly to do by yourself and typically aren't very effective in selling. You do need to go to them, but if you do, attend only the bigger ones, say Annapolis, Newport, or NYC, etc on the East Coast and one on the West Coast. If you do go, see if you can share a booth with another attendee to help with costs. Pick someone that has a complimentary product to yours, like cushions, or other helm component. That way your not taking their sales and together may bring each other added business.
As far as a website:
- Websites are nice, but you need to drive traffic to them and keep them there. Most people won't spend more than a few seconds at a site if they can't find what they are looking for easily.
- High ranking websites are best. You need to have your website come up in the first 10 listed websites when the search is done by the perspective consumer. You can do this with keywords and website name.
- If the website is complicated to navigate or slow to load, customers will go elsewhere
- A simple shopping cart is best
- If you are going to allow Credit Cards, you need a CC account or you can use a service that will process the CC for you for a small fee, usually 5 to 15% of purchase price. Most people won't buy something on-line unless they can use a CC.
- If you do accept CC, you need a secure site or at least the shopping cart pages secure.
As far as getting FREE advertising, there are several ways to do this:
Contact some of the sail/boating magazines and see what their policy is for testing and doing a review on new products. Some with do a small blurb for free, or for a very small fee, in their New Products section. You can even write the marketing blurb, so you control the content. While others may not do it for free, you need to give them the product, they may do an actual test review. Most of the time, they are mostly positive, but may have some negative comments.
Another idea, once you start generating sales, follow-up with your customers to get their input on your product. Address there concerns if you can. You then could offer to have them do your marketing for you by telling them if they get X number of people to buy your product, you'll kick back X % or X dollars to them.
Do you have local chandeliers that you could sell your wares through? If so, you could make them a deal that you have them sell the product at no cost to them. What I mean about this is that you drop off several pieces for free, they only get paid if they sell something. Only pay them a small profit, since they are not taking any risk, maybe 20% of the selling price. This method is a double edge sword: They have no risk and not really incentified to move the product as they did not buy it, but you also did not have to make a hard sell to them and are getting exposure for free. If they see that the items are starting to move without them doing much, they may want to start buying from you at this point you have to give them more of the profit, but now have guaranteed sales.
DrB
