The COVID-19 pandemic has created an incredible demand for online shopping and eCommerce products. Entrepreneurs across the globe are now looking to create and sell new and innovative products online. In this week’s Surge Session, we will be discussing how to create a product prototype, which is the first step in creating and selling a great eCommerce product.
The most important aspect of selling online is having the right product. There are three different options you have when it comes to getting your hands on a product: 1) you can manufacture the product, 2) you can buy the product ready from a supplier, and 3) you can purchase the product at the wholesale level. We will be discussing the first option: manufacturing your own product.
We will be going over how you can create a prototype if you have a product idea, or if you’re thinking about creating a brand with a specific product, as well as why a prototype is so important in e-commerce and why it is so important to have the right type of prototype.
Why are eCommerce Prototypes Important?
The reason why product prototypes are so important, especially in eCommerce, is you need to have that proof of concept first. As an entrepreneur, you’re about to make an extremely large investment into pursuing this business online. You need to make sure that your product is actually going to sell before you go ahead and invest in manufacturing a large quantity products. A couple hundred thousand units is going to cost a lot of overhead. So before you even take that risk, you want to make sure that your product is going to sell.
We have our own eCommerce operations here at Optimum7, so we’ve done a lot of prototypes. We also consult clients who sell different types of products and therefore need to create prototypes.
For example, we have a client who sells ID badges and ID holders, and due to the COVID-19 pandemic, he created lanyard clips that can hold your mask on your neck. The first step he took in creating these lanyards was generating a prototype to test out the product and see if there was a demand for it. It doesn’t have to be some elaborate product. It can be a basic product that is an existing kind of idea but will be used for another purpose.
Another important reason to create a prototype is to test how people will react to your product before you invest in manufacturing a large quantity of it. Once you have your prototype, send it to a video production company and spend a couple of thousand dollars to produce a high-quality product video that can get you some exposure and visibility. So before you even manufacture your product, you already have your prototype and your promotional video.
Promotional product videos are very important if you are going to leverage crowd-finding sites such as Kickstarter and Indiegogo. There are a lot of examples of people raising millions of dollars on Kickstarter before they even manufacture the product. They begin by creating a prototype and then seeing if it starts to gain traction on these platforms. The traction isn’t just about gaining visibility, views, and shares, it’s also about how many people are actually investing in this product. By investing they are saying, “Hey, this is something that I would use. This is something that I would want in the future.” Just by providing a proof of concept, you can begin to get the funding you need to get started.
Up-and-coming eCommerce brands that are trying to launch a prototype or a brand new product that doesn’t exist out there right now, definitely need to look into these platforms before going ahead and entering the eCommerce world.
Unless you have an existing business that generates millions of dollars a year and you are just investing in an additional product, do not invest in hundreds of thousands of dollars worth of merchandise without even testing the market.
The next step in launching a new product is creating a business plan. You need to have a business plan as well as the content. You need to know your value proposition. Once you have all of this, then you can go ahead and put it out there to gauge people’s reactions. You can think of it as a demand survey. If 90% of the people have a positive reaction, then you know that you have something good in your hands. You know you have something that will sell without the need for a large investment, simply with a prototype, a video, and an effective business plan.
What’s the best-case scenario when you’re developing a new prototype?
The best-case scenario is you launch on a crowdfunding platform, you get the funding you need, you see that there is a need for your product, and you find a great manufacturer that you can rely on once you have the funding to get started.
What’s the Worst-Case Scenario when you’re Developing a New Prototype?
The worst-case scenario is your product is a flop. You don’t have that traction that you thought you would have. But at the end of the day, it’s just time to go back to the drawing board and learn from your feedback. Take the feedback that you receive and learn from it because there’s definitely always room for more products. There’s always room for innovation and entrepreneurship out there, especially in eCommerce.
Another issue you could have is simply not creating an effective business plan with great content. You can have the best product possible, but if nobody sees your Kickstarter or Indiegogo, nobody is going to back it up. So you also need to build a buzz around it. There’s marketing involved here and the people who do this well, do it over and over again, because they know the formula to raise hundreds of thousands of dollars, if not millions of dollars. You just need the right strategy.
Building a Brand for an eCommerce Product Prototype
Now, another significant issue you can run into is another manufacturer trying to copy your product or idea, which will most likely happen. You’re not going to be able to get a patent for it fast enough. So having a prototype doesn’t mean anything if you don’t develop a brand around your product. If you want to have a business for years to come, it’s not enough to build a prototype, it’s not enough to raise millions of dollars, you need to build an incredible so that when people think about the type of product you are selling, the immediately think about your brand, and not the competition’s.
It’s really important to build your brand to the point where people start to use it as a common noun or a verb. That’s how brands stick around. That’s how they grow and scale. Obviously, you’re going to paint a target on your back, but at the end of the day, if you have a target on your back, you’re doing something right. That means that you’ve created a brand that people are going to strive to compete with.
So that’s why branding is extremely important. It comes back down to retention and loyalty, which will generate the majority of your revenue. Your future revenue is going to come from existing customers. That’s why, even though numbers are obviously important, you also need to focus on your brand, because the brand is going to support those numbers.
Lastly, if you’re creating a product, don’t just create one product that’s a one time sale. What else are you going to sell? This is why a business plan is very important. This is why it’s important to talk to an expert. Think about how you can upsell, how you can increase your average order value, how you can increase your lifetime value.
