Good morning and happy Mailbox Monday!
Today, a question after my own heart. Because I know this question well. It’s a question that doesn’t arise in most product-centric startups, who don’t know how to market themselves out of a paper bag — who’ve invested years in an “innovative” product with no clue whether a market for it exists or not.
Rather, this is the question of someone who’s developed some marketing chops… Probably created a few successes for a few clients… And wondered why the client’s making 95% of the dough while they’re just making a 5% royalty — for creating the entire marketing and revenue-generation system in the first place.
Here’s our question this Monday…
Where can I find products to sell?
Now, this is kind of a wide-open question. And so I’m going to give a wide-open answer.
Rather than point you to a specific secret source of hot products to sell (there isn’t really one)…
I’m going to give you a handful of product-selection criteria… And their advantages.
Use these as measuring sticks for products you’re thinking about selling, to decide which are duds and which are potential goldmines…
At least a 5X markup…
This may sound really dumb, or really basic. But you want a HUGE margin of error in product pricing. If you’re dealing in 10%, 20%, even 50% or 100% markups… It’s really easy for the math not to work out.
Take the infomercial industry. I heard recently that the smart companies will ask this question first. (Or second, after the patent question.) How much do you make the product for? What’s the retail? The sweet spot to be able to succeed on TV is 8X-10X markup. That may sound like a lot. But the economics of the business demand it.
Think about this. If you’re making $.80 on the dollar when you sell a product, and only $.20 goes to product cost, you have a lot of room to invest in marketing, business expenses, and more. You have a lot of room to fail and still come out ahead.
I’ve spent a ton of time in the publishing world. Nearly my entire career. Especially when it comes to digital publishing, the margins are astronomical. I’ve seen some pretty unimpressive marketers succeed in publishing, almost purely on economics. Plenty of sharp marketers have failed in many other industries without as generous of economics, simply on the numbers alone.
Why not start with an advantage?
Better if it’s consumable — with membership or continuity almost built-in…
Think about this. Getting a new customer is the most expensive, most difficult marketing task you have. Selling to past customers is far easier and cheaper. Even easier and cheaper than that is running the credit card yet again, month after month, for customers who’ve given you permission to do so.
Guthy|Renker, the infomercial titan, now works almost exclusively in the beauty products niche, including with their superstar acne product, Proactiv. There’s a huge advantage in a product like that. Used every day, and washed down the sink. Refills or replacements needed like clockwork. Automatic billing becomes the preference for the customer, for ease and convenience. One sale can lead to an income stream that lasts for years.
Find products that are consumable — including information — that customers want to keep coming. And sell it on a recurring, continuity, or membership basis…
Internet or mail delivery — not retail…
Retail in America is on a long, long downward slope. I don’t think the bottom will be at zero. But the future does not look bright. There are too many disadvantages. You have to be staffed, and open at the customer’s convenience. You must keep product in stock. You have to maintain the storefront, and the store itself. You’re limited to a tiny geographic area. The list goes on…
The internet and mail order flip all those disadvantages on their head. Even a large website can be staffed by one. Your customer can order while you sleep. Product can be fulfilled directly from third party suppliers — no stock on hand is necessary. A website must be maintained, but you can run the business from your messy basement. The world is your proverbial oyster — and customer. This list goes on as well…
Particularly if you lean toward direct response marketing, my general approach would be to sell products over the internet and by mail order. Whatever that is. Whether it’s physical products, information, or software. If you can fulfill it without anyone being there, it’s a plus.
Other businesses selling comparable or even competitive products…
You may think that having a lot of competitors is a bad thing. The opposite is true. Competition indicates a market.
If you wanted to write a best-selling book, it would be a fool’s errand to try to write it in a brand new genre. You’d be best writing it in Self Help and Inspirational, or another category that has had a huge number of bestsellers. By simply putting yourself in front of bigger markets, you’re more likely to make more sales.
(I have probably THE most successful information product in the “How to cut foam wings for model airplanes” niche — by multiples. But it’s only made me in the thousands of dollars over the last half-decade because it’s a TINY niche — we’re talking a few thousand people around the world. It was a test project, and a video my dad had already recorded around his hobby. And any money is nice money. But that shows you how much the size of the market matters.)
Also, there are a number of advantages having a lot of comparable or competitive products out there may give you. Lists for rent, or swap. Joint venture opportunities. Piggy-backing your offer as a back-end sale for someone else’s, or the reverse.
I once heard that US and European mail order businesses were on similar trajectories in the 1970s-ish. In the US, a culture developed where everyone rented everyone else’s list, and sold to everyone else’s customers. A thriving industry developed as a result. In Europe, the opposite attitude prevailed. Very little sharing went on. It set them back decades in the development of their mail order industry. Competition is good — and it’s not really competition, when you believe a buyer is a buyer is a buyer.
Product fulfills a distinct and known need or desire, solves a known or obvious problem…
There should be a clear reason why someone should want your product. It should also be clear who would want it, from the problem it solves, or the need it fulfills. The more pressing pain the person is in who would buy your product — and the better, more obvious and instantaneous the relief is, the easier it will be to sell it.
Products that fulfill an immediate and pressing need are almost always more successful than the alternate. They’re also much easier and more interesting to write compelling copy for. The negative emotion is a strong buying driver. To take them from negative emotion to the solution is a very formulaic but widely proven way to make a lot of sales.
A good selling story…
We love stories. They’re hard-wired into the human brain. We remember stories told to us far better than we remember stupid lists like the one that makes up this email. (But I’ve tried to weave in micro-stories throughout that will stick in your brain and help you remember these lessons.)
If you find a product that already has a compelling story around its creation, its creator, or anything having to do with it… OR a product around which a compelling story could easily and obviously be built… You’re in good shape.
A client I was speaking with recently looked at a particular market and decided he was disgusted with every product available to him there. So he hired someone to create a custom one for him that solved every problem he saw in all the competitive products. There are a lot of ways to sell that particular product. But even if I’m going to use a different lead to get into the product, that story will be a part of every promo I ever write around the product.
Proof and credibility behind the product…
The more built-in credibility a product or its creator has, the easier it will be to make big claims around the product. If your tech was built by someone at MIT, you have built-in proof. If your oil stock newsletter is written by a high-level consultant to the industry, someone who works with world governments on their energy policy, you have built-in proof. If your homemade apple pies are made with Grandma’s secret recipe, you have built-in proof.
The more proof and credibility that are already in your product, the easier your selling job will be.
This just scratches the surface, and may not answer your question directly…
But here’s the thing. There is a world of products around us. From wooden stools to vacuum cleaners, to bible study guides, to music-making software. Find something that interests you, and run it against these criteria. It may not meet all of them, but the more it meets, the better.
And then, ultimately, test it in the market. Try to sell it.
If you can make it work on a small scale, great. Scale it up. If it doesn’t work after some serious testing, move on to something else.
Opportunities are infinite, as far as our limited lifetimes are concerned. You simply have to get in their way and make them pay attention to you.
Yours for bigger breakthroughs,
Editor, Breakthrough Marketing Secrets