This is part two of a series about answering the Five Fundamental Questions of a Business. This post covers the second question: How will I produce my product?
- What product should I sell
- How will I produce my product?
- How will I deliver my product to my customers?
- Who is my ideal customer, anyways?
- How do I convince them to become a repeat buyer and brand evangelist?
In Part 1, we covered how to explore your background and analyze market data in order to decide what product to sell. Ultimately, the exercises from Part 1 should help get you to a short list of potential products, or at least product markets, to launch for your eCommerce business.
I think it’s best to have a few options on the table during the entire time that you are answering the Fundamental Questions. Each answer you come up with as you progress down the list will give you additional clarity and a clearer understanding for which product will be the most viable option in the marketplace.
Now, without further ado, it’s time to discuss how the sausage will get made.
How to Produce a Product: The Two Main Types of eCommerce Products
There are two types of eCommerce products that I would like to discuss today: 1) Information Products, and 2) Physical Products. Let’s start with some definitions.
Information Products are the offerings of eCommerce businesses whose core product can be delivered over the internet. These include eBooks, Courses, Coaching, Consulting, Tax Advice, Accounting, and just about any other professional service that can be done over the phone or web.
Physical Products are…wait for it…physical items that an eCommerce business delivers to its customer once they’ve made a purchase.
Both are viable routes to starting a business if you have a high quality product and a good marketing strategy. Let’s talk about how to produce a product in both of these categories.
Producing an Information Product
An Information Product business is all about knowledge. If you are a professional, meaning you have a certification that is a widely accepted representation of your ability to perform a service, odds are you know what your product is already. So I won’t spend a ton of time on professional services. If you are a professional looking to start a business offering your expert services to the world, please check out some of our course material on Brand Development and Digital Marketing.
If you are not a professional, per the definition specified above, don’t worry! Launching an Information Product is still a very real possibility for you and can be extremely lucrative and scalable. Many entrepreneurs started by gaining expertise in an area of interest to them, discovering something new, and then sharing that exciting new thing, and their expertise, with the world. But how do you produce a marketable Information Product?
There are 3 main steps to producing an Information Product:
- Become an expert.
- Develop your unique teaching materials.
- Iterate your product based on “customer” feedback.
Couldn’t be simpler. Remember, these are just the steps for producing the product, not running the entire business. Marketing a Digital Products & Services business is a whole beast unto itself! We will spend ample time discussing this in a subsequent section.
Step 1: Become an Expert
First and foremost, to operate a company where your principal business activity is to teach others, you have to be an expert at the subject you are teaching. This takes time, but it is not as hard as it sounds. The goal of being an expert is twofold:
- You want to develop the best teaching materials you possibly can so that you can transform the lives of your students.
- Anyone who buys your course or coaching services will only do so because they perceive you as an expert who can help them accomplish their goals. Becoming an expert is a necessary prerequisite to convince anyone to buy your information products.
“Great, but, how do I just ‘become’ an expert?”
A fair question. The bar is really not that high. For our purposes, I suggest reading 3-5 well-respected books in your field, and spending at least 1-3 years actually doing the thing that you are planning to teach. Nothing breeds expertise like experience. Immerse yourself in your topic of choice, and stay committed to it. If you want to go further than that, in his book The Four Hour Workweek, Tim Ferris outlines how to become a expert in 4 weeks or less:
- Join two or three related trade organizations
- Read the three top selling books on your topic
- Give one free one-to-three-hour seminar at the closest well-known university
- Give two free seminars at branches of well-known big companies such as IBM
- Offer to write one or two articles for trade magazines
- Join ProfNet which is a service that journalists use to find experts to quote for articles
Me personally, I haven’t taken these steps. But these could be worth a shot if you really want impressive credibility.
Is Your Expertise in Demand?
For this business model to work, you have teach something that people actually want to learn. This sounds obvious, but I think too many people fail to do their homework in this regard. Go back to your Demand Research completed when answering the first fundamental question of a business. How many people are searching this topic on Google each month? Are people willing to part with their hard-earned cash to learn this skill? Are there other Expert Coaches out there for this topic? If yes, don’t be discouraged: that is a sign of an in-demand skill! If no, ask yourself why not.
There is another lens to look through here. Russel Brunson, a prominent author in digital marketing, says that every product actually fits into 1 of 3 niches, no matter the industry or product: Health, Wealth, or Relationships. At first, this sounds just plain wrong, but I challenge you to identify a product, any product, that does not fall into one of these niches. (Seriously. Please send me a note if you think you’ve come up with one. So far, nobody has!)
Ask yourself: Does your product teach others to make or save more money, be physically or mentally healthier, or to find love or friendships?
Do you care?
Finally, this business model to work, you have to be passionate about helping your students. Be an expert in something that you truly believe will be life changing for people to learn. Your work will be gratifying and your business far more likely to succeed.
Step 2: Develop Your Unique Teaching Materials
OK. Recap. You’re an expert. You’re passionate about your skills. And people want to learn what you have to teach them. Now, what to do with all of your fine knowledge? You need to create a vehicle that meets these three characteristics: innovative, digestible, measurable.
Yup, it needs to be presented to your prospects as a new, innovative opportunity, otherwise it will blend in with everything else out there. It needs to be divided up into easily understood, digestible chunks, so that your students will enjoy learning the material. And it needs to produce repeatable, measurable results, so that your students can point and say “Wow, this program was really worth it. Before, I had nothin’. Now, I have X!”
The format of your Information Product is up to you and should be determined by your own skills. I would experiment with different media until you find what you’re good at. Write an eBook or step-by-step guide with screenshots, develop PowerPoint slides or Excel templates, record an audio guide or computer screencast. Any and all of these can be weapons in your Information Product Arsenal!
Step 3: Iterate Your Information Product
Once you’ve become an expert and developed your innovative, easily digestible materials that produce measurable results for your customers, you aren’t done creating your information product. To this point, you haven’t gotten any input from your potential customers. That is a recipe for disaster in any business!
One of the beautiful things about information products is that you can regularly update the materials and easily improve your offerings.
Russel Brunson recommends that you poll your audience before you even create your course! If you can get 100 interested prospects to answer the question: “What is your one question about (new opportunity X)?” Then you can use their responses to write the course material, and be confident that you are developing a product that people actually want to buy!
Wondering how to get that question in front of 100 prospects? Don’t worry. We’ll cover that topic later in the marketing segment of this guide, and will dedicate extensive time to it in the Digital Marketing section of the eComm Boardroom resources.
That’s it! I hope this was a good introduction to creating an information product.
Producing a Physical Product
Alright, we just spend an extensive amount of time reviewing how to produce excellent Information Products. Producing a physical product is in many ways much simpler to discuss. Odds are you don’t own a manufacturing plant. So, you won’t actually be the one creating your product yourself; you need a partnership with a supplier!
Therefore, a discussion around producing a physical product, once you’ve chosen what you want to sell, simply involves ensuring that you 1) You select a fulfillment model, and 2) you have the resources to identify and select a good manufacturer.
Regarding fulfillment models, you will ultimately need to choose whether you are going to buy product in bulk (and store your products in a warehouse until a customer makes a purchase) or Dropship your product to your customer (only buy a product, one at a time, after your customer has purchased it from you). If this is confusing, don’t worry: we will cover fulfillment models in depth in the next article.
Resources for Finding Suppliers
Here are the most popular resources for finding suppliers online:
- For buying product in bulk from American Manufacturers, I recommend Thomas Net.
- When buying product in bulk from overseas manufacturers, you should use Alibaba.
- For dropshipping products overseas use AliExpress.
Now, most eCommerce entrepreneurs that are just getting started are balling on a budget. If that’s you, head over to Alibaba or their affiliate site, Aliexpress. Here’s an overview of both:
Alibaba is the world’s largest B2B marketplace, and it consists of almost exclusively overseas manufacturers, mostly from China.
Remember, these are overseas manufacturers, and you’ll likely have to purchase in bulk and import the products to the US. Don’t worry, this process is not as hard as it sounds. You can contract with what is known as a Freight Forwarder who will take care of the whole process for you. Search for and find a great Freight Forwarder through FreightOS.
As you search Alibaba and weigh your options for manufacturers, you’ll want to focus on Price, Minimum Order Quantity, Shipping Terms, Product Quality, and the ability to customize/differentiate your product.
Sound complicated? It’s easier than you think. Nonetheless, I will dedicate an extensive guide to dealing with Alibaba Suppliers on the eComm Boardroom website. For now, suffice it to say that you can search, negotiate with, and strike a deal with a supplier of any product under the sun.
AliExpress, on the other hand, is a B2C marketplace where you can find dropshipping suppliers. That is, you can buy very cheap, but in many cases high quality products from Chinese suppliers and trading companies – 1 product at a time. No bulk orders or freight forwarders required.
Remember, Question 2 (How Will I Produce My Product?) is predicated on you having completed Question 1 (What Product Should I Sell?). As a part of that exercise, you should already have done market research and have a good idea for the viability of each product idea.
Question 2 takes these potentially viable products and essentially answers the question of “OK, but is it realistic?” Researching suppliers will give you an idea for the quality of manufacturers that are out there, the cost of manufacturing, and the feasibility of forming a relationship with a manufacturer that will lead to the creation of a dynamite product.
Hopefully, you feel well-resourced for how to produce your game changing product, whether it is an information product or a physical product.
Let’s move on to the next fundamental question of business: How will you get your product to your customers?