Written by Joe Sillett, Co-Founder & CEO, The Funky Appliance Company
Starting any new business can be daunting, but launching a product-based business can be even more demanding. You might’ve heard the saying, ‘product is king’, and it is 100% true. Product design, sourcing and selling must be taken very seriously. In a fast-moving online and social media world, where product reviews can be accessed and shared rapidly, there is nowhere to hide. You either reap the rewards from having launched excellent products or you suffer the fate of negative reviews, which are very influential.
So, you have an idea for a product. How do you go about bringing it to market? There are so many questions. Where will I get it made? How much will it cost? How much money will I need to protect the product design? Who can I get to work with me on my products to make sure that they not only look fabulous but pass all necessary health and safety requirements or certifications? And so on. So let’s break it down.
Making it happen
The first step is to find talented product design professionals. At The Funky Appliance Company, we work with two or three fantastic product design professionals to bring our ideas to life. As we hire these professionals, we make sure that they are all under a non-disclosure agreement and that the work they do for us is our intellectual property and not theirs.
We have a simple agreement with our designers that in return for paying them for their work, they recognise that the ideas we are protecting are ours. This is a very important aspect of the early part of product design, as you don’t want anyone sharing your products in the public domain before you have protected your Intellectual Property. Once the designs are finalised, we then work with our IP Attorney in the UK to make sure that our products are covered by international design registrations.
After the design registrations for the products have been filed, the next step is to contact manufacturers capable of making the product. Finding a good supplier or factory is something you need to do your homework and research on. Get the supplier or manufacturer to show you what they are capable of, who they work with and request a copy of all their factory audits and certifications.
Once you are comfortable you have found a good supplier, ordinarily, I would always recommend travelling to meet the people face to face. I have been to China five times in the last 4 years and at the beginning, it was vital to meet the team in person so that they could feel my confidence and belief in our new product. In a post-COVID world, you will have to make do with WeChat or Zoom video meetings.
Getting your price right
Before launching your product in the market, you need to do your market research on what you think people will be prepared to pay for your product, as this will influence how much you can afford to spend on the cost price of the product. This is an important exercise and one which shouldn’t be overlooked.
You also need to have a very clear idea of your distribution strategy. Ask yourself if you are going to be a direct to consumer (D2C) business, or will you have a multi-channel approach of selling your products yourself as well as selling to leading retailers who may want to buy your goods? You could also do what we have done by partnering with a leading distributor who sells your products on your behalf. This may take time before you can engage distributors as they will want to see proof of interest and demand in your product.
In terms of how you fund starting up your new business – financing the new product development, buying in the stock and then having funds to market and advertise your products – you will also need to have a clear plan on how you intend to do this.
The more detailed preparation work you do at the outset on how much you think it will cost to launch a product-based business, the better.
Think about the cost of the product design? How much will it cost to protect the IP? What will a minimum order with the factory cost? If your product is bespoke, how much does the tooling cost to make it? If your products need to be certified, what is this expense? Also, consider how many staff will you need to launch the product and how much they cost.
Crowdfunding is an excellent option to help you access the necessary capital. We have raised all of our funding to date via Europe’s leading equity crowdfunding platform Seedrs, when in return for capital, investors buy a stake in your business. This has worked extremely well for us to date and we have 363 investors in over 25 countries.
In summary, to launch a products based business, you will need capital, a clear distribution strategy, you will need to work with great people and before you do all of that, right at the outset, you need to be totally convinced that there will be demand for your new product or products and then you will need to convince everyone on your journey to be a part of it. It is challenging but also incredibly rewarding – there is nothing quite like seeing your ideas come to life. Good luck!