The E-commerce Leader

Michael: [00:00:00] Moving from reselling physical products, whether you’re drop shipping on Shopify or you’re doing retail arm or something like that on Amazon to developing your own products is a very big step. It’s really the key to, to creating a valuable sellable business. And that’s the real prize these days. I know so many business owners personally, who have sold their product based businesses for six or seven figures.
[00:00:51] If you’re going to keep owning your business also, it means it’s defensible and the profits for the product line go on for much longer as well. But it is a big, expensive and complex undertaking compared to simply reselling other people’s products. So today we’re going to go over how to approach this complex process in a structured way to get you the best chance of a profitable product that gives you nice juicy profits for the longterm and makes your business valuable.
[00:01:14] And if you. Sellable. So Jason, you ready to talk about developing your own physical custom products? I
[00:01:21] Jason: [00:01:21] am, man. I love this topic and I gotta be completely candid with you. This has never been one of my strong suits, and I know that you’ve worked with a lot of clients on this , this process. And I’m a learner in this regard.
[00:01:36] My, my background has never been to create physical products. And , so I, here I am to learn and to explore. I do work with some amazing , clients who have done very, very well. With their own products. And of course my business partner for coaching consulting, Kyle has done it himself really, really successfully in several times.
[00:01:56] And so I’m just in awe and would love to hear how this process should work. And maybe who knows. Maybe I’ll finally figure out how to make a physical product that I can sell on Amazon, myself.
[00:02:09] Michael: [00:02:09] That would be a great outcome. I mean, I have to say it’s not a quick and easy process. You’ve got to be serious about it.
[00:02:14] You’ve got to have the money for it. And I’m not really going to talk about money too much today just because not because it isn’t important just to say upfront it’s seriously important to be well-funded. I mean, how much is it? How long is a piece of string question, but you’ve got to run the numbers and if you’re not really good with numbers, get somebody who is because go into this blind and on hope is it’s never a great idea in business, but with this sort of stuff, you could get, you killed financially.
[00:02:37] And so we’re talking. Probably more likely in the tens of thousands of dollars than the thousands, although it doesn’t have to be. So just to give a rough flavor, I’m going to talk any more about finance yet, but, but, but it’s important. That’s all I’m going to say on that front.
[00:02:50] Jason: [00:02:50] Well, I just Marvel at the people who have been able to do this and you, you know, you do hear the stories of people who have done it right.
[00:02:57] And scaled and found their, you know, Customer, you know, product market match and really just hit home runs. And then of course you don’t hear too often about the failures, but let’s walk through your , process and outline here for how do you go about this? So break it down for us. How do you best go about developing a customer?
[00:03:18] Well, I guess
[00:03:19] Michael: [00:03:19] there’s two sides of the same coin, which is the market research side and the product development side. And , I would say two things about that in general, then we’ll break it down to just six easy steps, like all webinars as that’s everyone’s been doing for several years in this space.
[00:03:33] But the first thing is what most people call market research. I call a very superficial idea. I mean, it’s 2021. This idea has been out there for years. It’s not enough to use helium 10 or jungle scout, whatever your app of choice is, if you’re in the Amazon space or if it’s in the Google space, it’s reps or whatever , you know, if you’re doing Shopify and your main traffic was going to be through Google SEO or whatever it is, that is not enough in my opinion.
[00:03:57] Okay. What that means is you understand the keywords as they’re being typed into Google or Amazon by the searches, but you don’t understand the lives. Of the searches and that search intent is always going to be a bit of a guesswork. So you really need to dive deep, I think. And then the flip side of that is by diving deep into your market research, it means you’re creating a product that is much more likely to actually exactly solve a problem for a specific consumer.
[00:04:20] So those are the two sides of the same.
[00:04:23] Jason: [00:04:23] Okay. So break down the steps for us. What’s step one, step two, step three. How do you do this with what’s the. Yeah. So
[00:04:30] Michael: [00:04:30] this is the market research side. The first thing is to start with who you are and what, you know , a lot of people tend to start with keyword research and I’ve, for example, worked with somebody who’s 20 years, a doctor trying to do some random plastic widget.
[00:04:43] He knew nothing about. And I just said to him, Could it be that we need to tap into your expertise in some areas? One , one example of extreme example of somebody I interviewed recently, Jason Francios , based down in Florida, actually formed a business for athletes and hit one of his business partners has it is a doctor of physical medicine.
[00:04:59] So as far as I know in the British context means a physiotherapist. So really genuinely expert, very, very expert in, yeah. Serving CrossFit athletes. So straightaway, they have a competitive advantage built in based on who’s on the team, which is something to really think about how you can get an, a competitive advantage built in because you have disadvantages already because you don’t know what you’re doing.
[00:05:20] And necessarily if you’re first time out with a physical product, or even if you go into new market and you’ve been selling on Amazon for 10 years or whatever, Shopify, it may even a new market. You have a built in disadvantage to try and build one in. So I think that’s really important thing to be.
[00:05:34] Jason: [00:05:34] So brainstorming what you really know, it’s such a common story. You just expressed and I’ve, I’ve had these experiences as well, where, you know, you talk to people and they have 10, 20, 30 years of experience in a certain industry or vocation. And when it comes to them building an online business, they go in just some completely random differs.
[00:05:52] Yeah, like, you know, dream direction. And I, I, I, I just wonder why, why does that occur? There’s a reasons, you know, you get bored of stuff and maybe, you know, the pitfalls in your own industry and you want to avoid them all and therefore avoid the whole industry. I don’t know, but it seems very , calm. For people to make that first error.
[00:06:10] And it really is a huge mistake because as we all know, once we’re in an industry for a while, there’s huge nuance, there’s huge, you know , insider insights and perspective information that. Need to know, to operate successfully in a niche. And so, yeah, I think this is a huge one. Brainstorming what you really know about and what do you really care about?
[00:06:30] Who do you know in a target industry or market I think is, is critical as a first step. Yeah.
[00:06:34] Michael: [00:06:34] Yeah. There’s a very big what orientation online somehow. It’s like, what keywords should I be targeting? What products should I be selling? But it’s the who question that really matters because the people that pay you.
[00:06:43] In fact, the only people in the entire business model that gives you money is the consumer. There’s lots of other, who’s like your suppliers, they’ll take your money and there’s Amazon, they’ll take your money or it’s Google and they’ll take your money. So really obsessing about who more than, than what, in a way.
[00:06:58] I mean, if, even if you don’t have a particular problem to solve, but you know, a very particular type of person go talk to them, which is really one of the things I’ll talk about in a second, but talking to people is, is very out of fashion and it’s extremely important. So that’s the first thing really brainstorming thinking about who, you know, what are you really.
[00:07:15] What are you really know about? Because if you don’t , there’s nothing wrong with reselling somebody’s product. If you don’t really passionate about developing their product, because that is based on the numbers, but if you’re going to have to go out and as, as they say, get hit, basically , for several months of, of , back and forth and some financial risk and some sleepless nights, you have to care about it enough to actually see it through.
[00:07:34] So if you don’t. I wouldn’t even bother entering the game. You know, as, as Seth Godin says, the smart time to decide to quit is before you used to start. So I think it’s really important. And for many people, they come to the conclusion. Well, I don’t really have anything special to offer in any area, in which case I think that’s fine.
[00:07:48] Sell other people’s products who do, I mean, that’s perfectly valid conclusion, but assuming that you, you caught some kind of starting point, obviously your ideas are not enough to know whether there’s a market. So then you to marry that. The what I call that pic product or their creation. They need to borrow that with the product or their elimination.
[00:08:04] So you go through a bunch of ideas, which you turned into keywords and then run it through the usual keyword results.
[00:08:10] Jason: [00:08:10] This is your second
[00:08:11] Michael: [00:08:11] step. This is step two. Exactly right? Yes. The steps is to assess the market demand, supply and demand based on keywords. So Google or Amazon are probably going to be your main platforms.
[00:08:21] Jason: [00:08:21] I love that. So it’s , partly elimination. Talk more about that. How does that second step work?
[00:08:26] Michael: [00:08:26] Yeah, well, you’d need to build up a ton of ideas because you’ll come up with a lot of ideas, be very excited and then you’ll find that most of them have been done already. Or at least to a degree where you can’t compete.
[00:08:36] So really you’ve got to look at supply and demand. How strong is the demand, and that can be shown up in keyword research, a particular on Google or on Amazon, the queue, the search volumes. Those can be seasoned on in trends. So Google trends is your friend. If you, if you are on Google , on Amazon, you can see seasonal trends these days through tools like helium 10, and then also the supply.
[00:08:56] Know how good is that? The answer to the implied question from. The markets now that brings us really to what are, what are keywords for anyway. And I guess what you’ve got to understand, even if you don’t bother doing any further research is what’s the search intent. If I put a word in like, you know, plastic widgets, maybe I want the plastic widget, but that implies a problem that I’m trying to solve.
[00:09:19] So we have to kind of at least reverse engineer to what’s the problem that we’re trying to solve. And I think that’s really what defines a market more than keywords.
[00:09:28] Jason: [00:09:28] I love this. And it just occurs to me that if you’re dialed in on step one, what you really know about step two feels comfortable to you.
[00:09:38] You know, it, you almost in your gut know the answers to these questions or just they’re at the top of your. Tip of your tongue, you know, the answers to question to step two, if your work operating in an area that you have true mastery in. And, but what are the tools that you might use? I personally, like Uber suggest a ton in terms of seeing what key phrases are out there, the volumes , difficulty in terms of ranking for them, other tools that you recommend to people as they’re assessing them.
[00:10:06] Michael: [00:10:06] If you look at Google tools says a nice word. There’s a, there’s a couple that , I probably would have to look up and put it in the show notes, but I think there’s a key word, a tracker tool that is like a super primitive version of all the other tools. H refs is at the opposite, extreme a H R E. S for sugar is kind of the industry standard.
[00:10:26] That’s like about 99 bucks a month or something. It’s not that outrageous. So that’s really good. I’ve used things every everywhere in between for Google research. A lot of them are just a bit overwhelming, but on the other hand, you’re going to have to make your friends with them because that’s going to be something you can have to, you know, keep an eye on.
[00:10:41] Yeah. For the rest of your business career, I guess if you’re selling online. So those, those are some I use. I know Ubersuggest, you’ve suggested in the past as well. It’s pretty simpler to just helium 10 or jungle scout. They’re probably the go-to tool sets
[00:10:54] Jason: [00:10:54] really got it. Okay. So step one, brainstorm areas you’d really know about step two is assess the market.
[00:11:00] What step three.
[00:11:01] Michael: [00:11:01] Before we move on for step two, I would just say. Don’t get obsessed with the idea of a size of a market. It doesn’t matter if somebody’s making a million dollars a year, a month, sorry of sales. If of some iPhone cover or something, what matters is what percent of the market you can gain and can you make a profit?
[00:11:19] So if it’s a huge. The only way you can even make a dent is by having horribly low prices, which means zero profit or more realistically, you’re giving money away in order what I have the privilege of selling on Amazon, particularly, but that could be true in any platform. So there’s the main thing I would say.
[00:11:33] Don’t be over optimistic about that. It’s it’s more about how much of a winnable market can you find not how big the
[00:11:39] Jason: [00:11:39] market is? Well, that actually just opens Pandora’s box in a different topic. Doesn’t it? Which is sorry to go meta on you, but. You’re really asking the question behind the question, which is what are you trying to accomplish?
[00:11:51] And it’s not just create a product. It’s create a defensible long-term position in a market with a product that you cannot easily be , you know, just knocked off. By co and competitors with, and that’s a, that’s a harder thing to look at. So when you’re assessing your market and completely agree, you’re not looking at velocity , bestseller ranks and just units moved.
[00:12:15] You’re looking for customers who are underserved with products that are not sufficient for their needs. Yeah. That’s what you’re looking for. A hole in the market.
[00:12:26] Michael: [00:12:26] A hundred percent. And on that point, then that’s a movie on step three, which is the piece that most people miss out, which is talking to humans, forget about the tools.
[00:12:34] Forget about brainstorming between you and your coach. Go and talk to some people in the target market. And a lot of people are very resistant about this and I get it. But if you’re resistant to talking to humans, but you’re willing to spend on a 10, $15,000 and give it to some guy in China you’ve never met, then there’s something out of whack in your psychology.
[00:12:51] I would suggest because you’re trying to avoid the pain of understanding the people who are going to be giving you the money. That’s not why it’s. And I’ve had a real variety of responses from clients over the last while I’ve really been consistently kind of insisting on this for the last few sort of rounds of product development with clients.
[00:13:08] And it really does make a difference. And one of my clients is in the sort of outdoor dining space and he’s got , a bunch of people who are into the same thing. It’s not his job, not even slightly , but. His friends happened to be into this thing. And he’s got a little survey together and he’s got a set of people.
[00:13:22] He can bounce ideas off, and he’s now going to sell to people that he can show physical products. Now he’s got his prototypes made. So I really think it makes the difference. And this is what most people can’t be bothered to do. So it’s, it’s a low tech, super low tech, massive competitive advantage. So really it’s a no brainer.
[00:13:38] You just need to get over the hump and be willing to go talk to some friends and, and get used to the idea of interviewing people and actually go through a process called , the problem interview from Ash Maurya’s book, running lean. It’s mostly a little bit of an overcomplicated for me. We’re developing a product which comes from what is that?
[00:13:54] Okay. So basically you just go through and ask them a little bit to define demographics, who is the personal day. You’ll normally know that going, going in, in advance and then really talk to them about giving them example of the kind of problem you’ve got. So he’s an example of a photo sharing service that he created and when they became parents , they found that all the Google drive was hard to use an email wouldn’t manage to transfer it photos.
[00:14:17] So here’s examples from his product dev days with them. I suppose the software as a service, but the same idea. So give people a bit of a context and give an example of, of your own or maybe a client’s or a would be client and then ask some questions like, you know, what sort of problems do you have in this area and what are the things that annoy you the most?
[00:14:36] And then another part of it as well is going to be , Compete with what, you know, what existing products you use, what things did they do well, where are the gaps? What are the things that really annoy you about those? What things do you really need done? And this is kind of the killer question, but are there other things don’t do well out there?
[00:14:50] So those kinds of questions to really deep dive into the things that keyword research has hinted at, and maybe you’ve even looked at the negative reviews on Amazon. And so you should, but this is a much altogether deeper connection with the market. And I think this is the secret source that isn’t very secret, but most people don’t do it.
[00:15:06] Yeah.
[00:15:08] Jason: [00:15:08] And, you know, doing this , at scale, there are different tools you can use. Of course, if you want to do it, not one-on-one, but one of the mini , but nonetheless, both of those wonderful. Conversations. And then one to many , tools would be wise, you know, survey monkey or other tools, polls, that kind of thing.
[00:15:23] Yeah. And it’s what I would say.
[00:15:24] Michael: [00:15:24] I mean, I wouldn’t say that that survey monkey or all polls are a bad thing, but yeah, but everyone’s a bit obsessed with the scaling piece on and I should, the first thing to do is to start with things that don’t scale. And then the ultimate test is whether people will pay you money anyway, and that’s the way you get the best scaling test vehicle is.
[00:15:42] This is an actually , and if your product sucks, then I guess you’re going to know, and you can kill it off and go to the next one. But yeah, I think , the scale piece is, is definitely not invalid, but I would force if you can have 5, 10, 15 conversations with one-to-one first, I truly believe you’re going to get more of the flavor of what’s that then just doing surveys or they just stop you doing both.
[00:16:04] Jason: [00:16:04] Of course, both. And. Maybe. Yeah. But certainly shouldn’t skip the in person conversations.
[00:16:10] Michael: [00:16:10] Yeah. And I guess the reason I’m so very quick, you’re getting in there with ice. Cause a lot of people want to skip that alternate thing because it can be a bit awkward to, to ask, you know, Sydney for a lot of time and you know, it is.
[00:16:21] And I just think , it’s quite a lot of hard work to set up and it’s worth it. That’s what I mean.
[00:16:26] Jason: [00:16:26] Well, it also exposes your idea to somebody whose opinion. And that’s always a frightening thing. And especially if they’re not entrepreneurial in nature and they only see, you know, kind of the negative components of it, you can really put yourself in a funk after talking to people about a dream,
[00:16:45] Michael: [00:16:45] but I’d rather have a fund now than a funk where I’ve also spent $20,000.
[00:16:50] In 12 months time. I see that a lot. I mean, if you’re not willing to engage with your target market, now they’re going to engage with you and it’s called a negative product review. Right. You know, they’re going to engage anyway. I I’d rather be proactive about that.
[00:17:03] Jason: [00:17:03] Okay. So in your process, after you’ve done the , the research components, then it actually comes down to starting to , work through the product development process.
[00:17:12] So step four in your process.
[00:17:15] Michael: [00:17:15] Step four suppliers in samples. So really finding suitable suppliers often they’re going to be abroad, but, but I’ve got a couple of major hints. First of all, forget about Alibaba. Everyone else has been using it for a long time. You’re inviting the competition there. You’ll also have very little idea whether they’re good, bad, or terrible, and, and China is.
[00:17:33] Either good or bad is there’s a range of might my trusty iPhone and my Mac made in China all the way by Foxconn, probably all the way down to the most awful stuff. So it’s very random, very variable. So my second hint is using an expert, find somebody who specializes in sourcing in your target country and preferably in the, of.
[00:17:51] Production style. So if you want a traditional factory style, you’re probably going to be looking in China. In which case my friend, Ash Monga runs an agency out there he’s been out there about nine years. Now is Indian originally then studied in the UK out in China’s has got real perspective, internationally.
[00:18:07] Another friend of mine, a few sourcing in India for handmade products, which is quite different kind of process and different, different things to look out for as my friend Conarc Aughra, who’s based in London, but he’s originally from India. He’s also worked in America. So the very international, so somebody along those lines.
[00:18:21] You could be those guys. If you want to check out the show notes, I can put links, but somebody who really, really gets , supplier due diligence, quality control, and, and is very structured about it because otherwise you’re just, it’s a kind of, you know, very random thing. You’ve got very detailed ideas of what your clients want, and then you’re going out and asking the world if they can help that, that doesn’t match to me.
[00:18:43] And if you’re going to try and precise, fine tune the solution to the problem. You need to have some crop control of the quality of what’s going on. So that’s my advice. Get an expert to help you with
[00:18:52] Jason: [00:18:52] that. Well, you’re hooking our listeners up with personal contact, so that’s super awesome. Now, are these just some dudes in their apartment and London, or are these like, are these real big company guy?
[00:19:04] Companies are
[00:19:06] Michael: [00:19:06] a little bit, yeah. Ashley’s company is , I think the last time I spoke to him was a while ago. So early 20, 20, I think we’ll have grown since then, but he’d done. He’s got about 25 million. Dollars a year in revenue. This company and Conarc is got an office in London and he sort of coordinates many, many people in the world who are rural handmade producers, mostly in the Indian sub-continent partly, it’s just a numbers game.
[00:19:30] There are 1.3 billion of them, but also in places like Bangladesh, Indonesia, et cetera, some parts
[00:19:35] Jason: [00:19:35] of Africa, so great leads for our listeners. So that’s really great. So the contact info , websites or whatever, it’ll be in the show notes for this. Okay. Ash monk, Mongo,
[00:19:47] Michael: [00:19:47] Mongo, that’s it? Yeah. Yeah. Okay. I happened to both be Indian, which is by complete coincidence, so, yeah.
[00:19:52] Great. Yeah. So start with that. Also be talk to your friends who are serious sellers, and you’ve done this process before and talk to them as well, or, you know, whatever it is, some personal contacts and some expertise is good. Now
[00:20:05] Jason: [00:20:05] use this step is suppliers and samples so that those guys can help us find suppliers.
[00:20:10] Talk to us more about the samples. What are you, what are you looking for there? How do you do that step? Why is it important? All that kind of thing.
[00:20:18] Michael: [00:20:18] So, first of all, I would want samples for two reasons. First of all, for product development. I want to start with an existing product and modify rather than start from scratch in a lot of the time it’s particularly, it’s going to be manufactured products.
[00:20:31]If you start from scratch, it tends to be more expensive. But what you’ll end up doing also is reinventing the wheel. So if you start from scratch and you go to a Chinese factory and you say, I’m going to make this thing up, Silicon mold, then maybe they’ve got to create three or four new molds for you at the cost of a few thousand bucks, six, or maybe less than that.
[00:20:47] Silicon mobile. Couple of thousand, but it’s going to vary a lot. But the point is if they already have products that are modular, they’re put together from different bits, which is normally how things are constructed in China. As I understand, then , it doesn’t really make sense to reinvent the wheel. If you can create something that’s unique and defensible and yours, you don’t have to be completely unique in everything.
[00:21:06] As I understand it. And probably, you know, we’ll get a patent lawyer involved if you really need to be serious. But you know, the simple version, not being a manufacturer lawyer myself, is that you should start off with something that, you know, they can make and then tweak it such that they can still make it relatively easily.
[00:21:22] If you start from scratch, then you’re going to have to start the process of manufacturing and scratch. And you’re more likely to get errors is more like to be expensive. And I’m not a manufacturing engineer, but this is my sort of pragmatic experience of it.
[00:21:33] Jason: [00:21:33] And so. That sample you’re getting is just sort of the best of what’s out there that you think could be improved upon.
[00:21:39] Michael: [00:21:39] I think so. I mean, it depends whether you’re talking about manufacturing, which case, what I said holds more true, or whether you’re going for handmade stuff. In which case you might come up with something from scratch, with a CAD design or something like that. And it could be aided design because they’re physically easier to make.
[00:21:54] And the scaling piece is less of an issue. If you come up with a uniquely shaped wooden product, for example, like a client of mine has recently. That’s less of an issue to get made , than if you’re getting a manufactured product. I would be more inclined to start with an existing product. So these are simplifications and it will depend on your situation, but yeah, broadly speaking, starting from something existing and then improving, it is most likely to be the simple path.
[00:22:16] Ready. How
[00:22:17] Jason: [00:22:17] long do you think that that process would usually take.
[00:22:20] Michael: [00:22:20] This is a long time consuming process, frankly. I mean, if you’re going to talk to , people that takes time to set up and go through, and in an ideal world, you could get that done in 2, 3, 4 weeks in the real world where people are working around existing day jobs.
[00:22:32] And if you’re talking about startup, I mean, if you’ve got somebody who’s got an existing business, Doing wholesaling, who’s wholesale sourcing, reselling other people’s products. Who’s developing their own product lines. I’ve got two or three clients I’ve worked with like that recently. Then they’ve also got existing products too, to run.
[00:22:47] So the reality is this is normally a six to nine month process. Okay. And you just got to make your peace with that, or I’ve just, don’t do it in the first place now. And that’s one of the reasons why I want to get that out there. Like not being negative, but I think it’s a very positive thing to go. This is not for me.
[00:23:02] I’m going to do this instead. So it does take a long time because even finding a good supply can take a bit of a while, depending on what you want. And there’s a bit of a chicken and egg cause before you know what you want, you can’t find the perfect supplier. So sometimes you’ve got to start off with an existing product and send it to somebody like Ash and say, right, I want to supply.
[00:23:20] You can make stuff like this. What do you
[00:23:21] Jason: [00:23:21] recommend? So. That’s interesting. Okay. Sure. Yeah. Okay. So let’s say you got the supplier, you’ve got the samples. What’s the next step in the
[00:23:27] Michael: [00:23:27] process? Step in the process. Again, this is the bit, rather than the pure private label play. You’re going to customize it. So basically based on your interviews, I think you probably need to come up with the first prototype yourself.
[00:23:38] So customize either you go straight to your prototype and you don’t bother with any existing product. Particularly with Royal handmade, that’s less of an issue. Or you start with an existing product and you can literally just rip bits off existing products and tape them together with gaffer, you know, with , you know, what do you call that strong tech masking tape or whatever that duct tape, that’s the strong stuff.
[00:23:57] Again, not masking tape, stick it in a different bag and send it off to a factory in China and say, make like this. Cause they’re very, very good at that. So you really, truly do that. Yep. It’s it’s primitive and it’s not necessarily recommended, but it can as a first prototype, you could do worse, but at this way, if you’re going to keep things going, because what’s going to happen is you get that back and you look at it and think, well, that’s pretty rubbish, but you can then at some point, either the first or second prototype, you can take it to your people that you’ve collected so carefully and interviewed and go back to them and say, This is one of the solutions we’re thinking of to solve your problem, give it to them to use.
[00:24:30] I mean, for example, I’ve got a client who’s, he’s also in the outdoor sort of dining space. Who’s literally just had a product made it actually wasn’t in China. It was in the UK, which is also possible in the U S as well. And he’s given it to his sister to go and try out and see if she can destroy it basically.
[00:24:46] So, you know, giving, giving people products to try out, even to the point of destruction is a really important part of the process. Because if you don’t do that, now you put it out to Amazon times, a thousand units haven’t spent 20,000 or whatever it is 10,000, 5,000 at the least. And they’re going to give you the feedback, but it’s called a negative review.
[00:25:02] So it’s much better to do it at a tiny scale. It takes longer and it’s frustrating. But those are the choices. You either get to do it at scale and risk, you know, losing your money and getting horrible reviews publicly, or you get to do it under your control. So I would advise the
[00:25:17] Jason: [00:25:17] latter. I think it’s important for us to spend a couple minutes talking about the nature of customization, because if you really think about what’s happened prior to your work in a market space, the person who’s made the best product out.
[00:25:30] Right. It was probably more familiar with all of these issues than you ever will be, or unless, you know, you are really into it and you can catch up with them in terms of their technical competency. There are probably reasons why they didn’t do what you’re doing. So let’s talk through that. So it could be, for example, in some space that there’s just , a cheap version.
[00:25:54] And the expensive version the prior , manufacturer decided not to pursue, you know, it’s just like, it’s too costly to do it the way you think customers will want it, or the way customers have expressed that they want it. And someone made cost trade-offs to make a cheap version. And so. Making an expensive version is a risk because you’d have to go upscale in terms of your price points.
[00:26:17] You’d have to say this is a premium version and there’s a reason it’s twice as much or whatever in terms of cost, but it’s what customer said they wanted in terms of functionality or whatever does that. And, and I think that’s one track. The other track that can commonly occur is there’s not a specific use case for certain niche audience, where a lot of times products are used by people for various reasons.
[00:26:42] And there’s sort of a core user community. And then there’s a sort of like the second or third , user community. That’s a smaller user community in a different context and really breaking those apart and saying, okay, this product that everyone’s using is really only for people who, I don’t know, I’m just making this up.
[00:26:58] Only use a desktop computer, but as it happens, many people have on a tablet now iPad or, you know, whatever. And so we need to make a version for them specifically. So it’s a niche down , and there are many, many such customization angles that I think are important to think through. You have to make hard choices that the other manufacturers have already been involved with and thought through and said, no, that’s not a good idea.
[00:27:27] And that contrarian. Yeah is really the risk of it. All. It
[00:27:32] Michael: [00:27:32] is. It’s not easy stuff. I mean, I I’m, I was about to say nobody promised it would be easy. I mean, that’s not true. Many people would promise it would be easy. And I, again, talking to some of those guys as potential clients and I I’m the reality check guy sometimes, which is not fun, but it is hard.
[00:27:45] I mean, what I would say is this, that there’s a, a very good , Part of the star principle by Richard Koch, which is one of my favorite books, such great business strategy book. I mean, the guy’s made himself very rich by following it as well. But one of the things he says is I’m looking for profitable variation when it comes to product design, which is to say a lot of things.
[00:28:05] You can do some product to make it better. We’ll make it more expensive. It will make it, you know, more complex as well. And we’ll like to break and a lots of downsides. So if you can simplify something, but in a way that still retains the function that the clients or the, you know, the customer really cares about that is the gold.
[00:28:22] And that often takes a lot of digging round to figure out what you want to get rid of. Actually rather than what you add. I mean, Bruce Lee said something like that and he said, the ultimate end cultivation is reduction or something. And there are a lot of modern design principles into work on that. I mean, I’ve always got my favorite example to hand, which is my trusty iPhone stand, which is just very minimal.
[00:28:40] Okay. It’s not very defensible, which is the downside is simple. That’s what patents are for though. Isn’t it? Because when you simplify things down, then everyone else does want to copy it. And that’s when you need to have that. Illegal defensive strategy. And I’m not going to get into that because it gets too broad.
[00:28:54] But part of your product development strategy probably does need to be a legal defense strategy because it is easy to copy once somebody’s gone through the hard work of figuring out what to leave out, what to leave in. So you know that it is quite an involved business in the end. It’s, it’s hard to simplify it down, but I don’t think you necessarily need to leech reach for the lies right at the start.
[00:29:14] If you’re on a limited budget, I mean, they’re certainly not before you’ve actually got it into the market in a mass scale.
[00:29:19] Jason: [00:29:19] Yeah. There’s of course a great list that I was just looking to see if I can pull up, but I can’t, but it’s Paul Hopkins list from growing a business where he talks about ways to ways to improve products and he has a whole breakdown of ideas, make it faster, make it stronger, make it lighter, make it, you know, there’s many, many such customization ideas.
[00:29:37]So anyway, all that to say, I think this is a huge step and this is really where you will either make magic happen for customers or you’ll make a false. Where you bring something to the market and people are not so much, didn’t really get it right. But yeah.
[00:29:52] Michael: [00:29:52] Yeah, exactly. But the thing I’m trying to do with the way we work is to, to get that done quickly and privately rather than it scale.
[00:29:59] So that at least if you have 10 people who really love your products, you might find a hundred. And if you can find a hundred and that’s literally, yeah. What I would suggest is after you’ve got it to the point of mass customization , I would S I would try and get the smallest run you can get and get it out there and small scale, test it and iterate.
[00:30:16] I mean, really the secret to all this stuff. I was speaking to Jason Francios and I was saying, how come you’ve done so incredible. Weightlifting belts. So many other people have done it. Well, number one, let us not forget really important. He had a genuine, medically qualified expert on the team. Now that’s hard to beat not everyone’s going to have that, but if you have 20 years experience and then industry or one of your contacts, stars, or even somebody you employ to do your product development, there’s nothing wrong with that.
[00:30:42] That gives you that edge. But the other thing you said is that we just keep innovating. Whenever we go back to the factory, we’ve take the feedback from the customers and they are super plugged into the customers. They literally go to conferences with them where their products are on stages. It’s crazy, but you know, however you do that to iterate each time and just tweak and tweak.
[00:31:01]That’s also part of the key. So the product development doesn’t happen and then stop it. It’s a
[00:31:05] Jason: [00:31:05] continuous thing, right? Yeah. So you’ve mentioned a guy, Ash, Maher, Ru I don’t know how to say his last name. I’m not sure if you do either, but , yeah, but you’ve talked about him before for prior books that you’ve looked at.
[00:31:16] And then I was an Amazon bookstore yesterday , in Seattle area and came across a book that looked amazing. You know, an Amazon bookstores is a real, real cut-down list. Amazing books. And it was called lean scaling , or scaling lean. And I started to browse through it and it just looked fantastic. And then I noticed it was the same author that you’ve referenced a bunch as it relates to this type of work.
[00:31:38] So the lean scaling is a book I had what’s his prior book. You’re you’re a fan of the owner.
[00:31:43] Michael: [00:31:43] Yeah. There’s called running lean. And to be honest, I’m not necessarily a fan of the whole book. I’m a real fan of, I think it’s specifically chapters seven and eight for these two interviews, just because I found that to be really pragmatic.
[00:31:55]The rest of it, there’s a lot of lean canvas work, which I probably didn’t grasp, which is also a very good concept, which I was probably wanting to simplify past that. Particularly for people who are new to private labeling or, or custom product, I should say. Yeah , but yeah, it’s worth reading for sure.
[00:32:08] Depending on how conceptually he fight to be. Yeah. So
[00:32:12] Jason: [00:32:12] it sounds to me like his first book, the one that you’ve mentioned , lean scaling, is that it? No sir. Running, running, running, lean, running lean, and then lean scaling. So read running lean. Chapter six and seven first and then lean scaling looks amazing as well.
[00:32:26] Michael: [00:32:26] That’s the chapters in any case they’re called, I think the problem interviewed on the solution interview, which is basically in other words, find out what people have as a problem, go get it, which is the sourcing piece. And then going, give it to them and say, what do you think? And if they say, oh, actually it sucks then do not go and get a thousand of those made because you’re probably going to get a similar reaction.
[00:32:44] I mean, yes. You know, you could argue about the statistical relevance of 10 people, but. You know, on the other hand, if you put a thousand, if you make a thousand sales on, on Amazon, you’re putting to get a 1% review rate. So you get about 10 responses. The difference is that can kill your confusion conversion rate on any future sales.
[00:33:01] Whereas if 10 people privately tell you that a product sucks, then it’s a good idea to go and it’s right on it, I
[00:33:06] Jason: [00:33:06] would say.
[00:33:06] Wrapup: [00:33:08] Hey folks. Thank you so much for listening to another episode of the e-commerce leader today, we’ve been busy diving into how to create your own product line for e-commerce, whether for an Amazon based business or Shopify, or indeed any other platform. We really have gone through , quite a bit of work today.
[00:33:24] So the product research side or market researchers, I would probably prefer to call it the brainstorming and then Sonny who, you know, what you know, not abandoning who you are when you come to developing physical products, if it’s new for you, or if you’ve been reselling a lot of types of products, again, not abandoning your expertise that you’ve grown over possibly decades of reselling other people’s products to a market.
[00:33:48] The second step is to assess the market, doing your keyword research. Obviously that’s the most discussed piece and the communists, but it’s still going to be done and done well, the main clue that being, of course not to enter massive markets that you cannot make a dent in , as they say, the riches are in the niches.
[00:34:03] If you’re in America or the Rishi is in the niches, that doesn’t really work in English. The third step is to interview potential clients. Now to do that at scale is quite tricky. If you’ve been in the business for 20, 30 years and you are selling existing products and you know, your clients very, very well, then you can probably skip this, but if you are new to selling physical products or product development, I would strongly advise at least for the first few products going through a process like this, trying to do things at scale before, you know, whether you’ve nailed it.
[00:34:32] Is in my experience, always a mistake. There’s the say, nail it, then scale it. So understand your customers really well. And then in the next episode, we’ll go into the product development side itself a bit more, but you can’t really separate good quality market research. Product development in my opinion.
[00:34:50] And here’s why, because if you develop a product that isn’t really fine tuned to what the market wants is going to be hard to sell. It’s going to be hard to sell at a decent sales velocity, or the good conversion rates, making it more affordable and profitable, and it’s harder to sell at a good price, making it again more profitable.
[00:35:05] So the more you can develop a product that’s exactly geared to your market. My opinion. The more likely that thing is to take off and take off at a great profit for you and your business as well. So if you’ve enjoyed today, don’t forget to subscribe as ever, but we’ve going to reward you more than usually.
[00:35:24] Until the end of July, 2021, we’re running a contest. If you just go to www dot contest, the e-commerce sorry, let me try again. Www dot contest dot the e-commerce leader.com. So no S in contests, contests, www.to contest dot the e-commerce leader.com. You can enter there by simply going to that site and then subscribing on whatever play of choice you want to your, to the podcast.
[00:35:56] And you get points for. For entering the contest. Then , there was a $250 visa gift card available. If you’re British, we’ll figure out a way to make that work. As long as you can legally enter a contest in your jurisdiction and you better go and read the fine print. I’m not going to be a lawyer about contests, but if in doubt, enter.
[00:36:17] And then you have the best chance of winning $250. Obviously Jason and myself have done a lot of work with coaching clients for several years now. So if you wanted to work with me, just go to amazing fba.com forward slash mentoring. I only work with businesses that already have revenue. If you’re in the early stages in your first 10, $20,000 a month, then I can help you.
[00:36:36] I can also help those who have a lot of wholesale reselling experience who is starting to develop their own products. That’s something else I work on. Do you want it to work with Jason or Kyle disco to winning on shopify.com? They’re actually going to be rebranding more broadly than that, but that will always redirect.
[00:36:51] So winning on shopify.com to find out more about working with Jason and his business partner. Kyle just remains me to say thank you so much for listening. Keep listening. Don’t forget, subscribe, and we’ll speak to you in the next episode about the detail of how to source products and how to develop products in a way that means you maximize the chance that people will love your product and pay you great money for it.
[00:37:15] Thanks for listening.
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