This article originally appeared on our Forbes blog
Launching a business with physical products comes with its own set of unique challenges. Here we chat with three product-entrepreneurs who share their most memorable rookie mistakes, along with how they corrected course and consequently, implemented permanent improvements in their businesses. Their anecdotes represent some of the most common missteps made by new makers. After working with designers and inventors for nearly a decade, I can confirm that nearly every newcomer who loses time, money, or momentum has done so because of one of these preventable errors!
Mistake #1: Assuming Everyone Understands What You Want
When Briana Borten was launching her holistic body care line, she, like most people bringing a product to life, was hyper-focused on the details. In her case, packaging was a central focus; she had beautiful labels designed for each product, and tweaked and retweaked the colors and copywriting and layout until they were just perfect. The first production run went off without a hitch, and she was was thrilled with the results.
Product sold quickly, and when it came time to re-up on inventory, she handed off the specs to a production manager who would oversee reordering. This is where the “a-word” reared its ugly head. Borten assumed that because she was providing a finished design to her team as well as her supply partners–one that she had outlined clearly and painstakingly–there would be zero confusion about her expectations for the finished product. She didn’t see the need to establish a system of checks and balances to ensure the specifications were met, because it just seemed obvious that they would be.
Production mistakes happen for a variety of reasons. Changes in personnel, calibration issues with machines, accidentally using the design files. Human error is present, if not prevalent, in manufacturing. All these variables make “assuming” a risky business.
In Borten’s case, her manager failed to request a new set of samples prior to production. Also a victim of assumption, she assumed the supplier would deliver exactly what had been sent on previous orders. She didn’t want to delay delivery by double-checking. As a result, a very large order arrived at her warehouse with incorrect labels.
The experience led Borten to implement systems to preserve quality instead of relying on the judgment of any one individual. She outlined a sampling procedure in writing that required two people to sign off on proofs, as well as a quality check that would catch any incorrect orders on site at their production facility.
Mistake #2: Having Design Tunnel Vision
Ryann Scrafford did what many designers do when searching for manufacturing solutions: she looked for someone who could recreate her baby blanket designs exactly as she envisioned them, with no deviation from her original design. While it sounds logical to look for supply partners who can reproduce or make your product just the way you want it, the search for perfection can be a momentum-killer.
This is mainly because it can be hard to replicate precise specifications from supplier to supplier, particularly when it comes to materials such as fabric. Not only is there natural variation between “the same” material produced by different vendors, but there are also countless types of fabric out there, with varying weights, finishes, printing techniques and so forth. The sheer volume of choices makes searching for an exact match akin to finding the needle in the haystack. This phenomenon is true for many material components.
New design entrepreneurs are better served by looking for the best materials they can find, rather than embarking on an endless search for a perfect match. This is even more true for people producing at small quantities; since they don’t have the budget to customize orders like big brands do, they are limited to “stock options” (materials that are regularly stocked by suppliers). For example, a multinational sportswear brand may produce thousands of yards of custom performance fabric at a time, made exactly to their specifications; however, a small maker looking for this same material will not be able to find it because it’s not something that textile suppliers stock.
In order to speed up the sourcing process, be open to feedback from suppliers about what material option might work best for a design rather than making narrow requests. When Scrafford’s search for a specific fabric stalled out after a year of futile sourcing, she realized she needed to be open to new solutions. The result was a revised product line that was a bit different than her initial offering, but just as high-quality!
Mistake #3: Launching Without A Clear Pricing Strategy
Pricing a product correctly is central to a brand’s viability. Price too low and a venture becomes unable to sustain itself; price too high and customers won’t buy. Both options, sadly, can lead to business failure.
Markisha Velazquez launched a line of children’s hats with the best of intentions. She wanted to give parents stylish headwear options for their kids at an affordable price. She set her initial price point at $20; however, her manufacturing costs were nearly just as high. Without earning a profit, she was left with very little to market the brand, let alone keep the lights on.
She then tried applying a standard retail markup in which the cost of making a good is multiplied by 2.2 to set the wholesale price (the price that stores and other resellers pay), and then multiplied by 2.2 again to set the retail price (the price the end consumer pays). These hikes resulted in a massive slowdown of sales because they didn’t account for the most important aspect of pricing: what the market will bear.
After receiving guidance from a business coach,Velazquez dug deeper into her customers’ buying habits and examined what they were paying for other high-quality children’s accessories. First she identified brands with a similar target customer and “Made in the USA” focus, and tracked their pricing across a variety of channels, including boutiques, pop ups, and ecommerce stores.
Then she signed up for in-person craft markets, which, compared to trade shows and pop ups, provided her with an inexpensive way to get face time with actual customers. This proved to be the best source of intel, as she could see people’s reactions to pricing firsthand, as well as what styles were most likely to bring in traffic. As a bonus, she also received feedback on the fit of the hats, which helped her improve her design.
Armed with this data, she set a market-based price and then resourced the labor and materials required to make the hats to fit within the desired profit margin. Ultimately, she had to find a different fabric vendor and remove some non-essential components like design trims, but the end result was a product line that did not compromise on style or quality.Velazquez’s new pricing strategy now yields enough cash flow to run the business and to invest and grow.