Making mistakes in business is part of the learning process. When you’re running a product based business though, mistakes can be costly. One of the reasons I launched Wholesale for Creatives was because, over the course of my career, I’ve made a TON of mistakes. Fortunately, I had a large company in my corner to catch me when I fell and amazing colleagues and managers to help me through some of the sticky situations. As a small business, you don’t necessarily have that option and one mistake for you could mean closing your doors before you ever have a chance to really show the world what that beautiful design brain of yours is capable of. That’s why in today’s post, I’m sharing 10 of the most common mistakes I see product based businesses making in the hopes that I can save you some headaches and your business some cash. My company had my back, and now I’ve got yours.
Mistake #1 Not validating your designs/product ideas in the marketplace
Before you go all in and purchase lots of inventory you should aim to get as much feedback as possible. While kind words and support from family and friends are amazing, you need to test the waters to see how total strangers feel about your product. This step is especially important when you’re just getting started. As your business becomes more established you’ll be able to use the selling information from retail stores and feedback from customers to learn what the market is asking for and develop designs and collections that complement customers needs and wants.
Validating your idea doesn’t have to be difficult. You can do it pretty painlessly in a few steps:
- Talk about it. When you share something you have in the works listen to what people are saying. Are they excited? Asking questions? Less than enthused?
Look for similar products in the marketplace. Seeing something similar in the marketplace isn’t necessarily a bad thing because it means that someone else has already taken steps to see if it would be a winner. Keep in mind though, just because it’s sitting on a shelf doesn’t mean it’s selling.
Listen to what your audience and the marketplace is saying. When your current customers ask for something directly, it’s almost a no-brainer to give it to them. You can also get great information by paying attention to what others are asking for in Facebook groups, and customer feedback left on a company’s various social media channels.
Pre-sell new styles. The true indication of success is when people are willing to open their wallets and give you their hard earned money. Offering pre-orders for a new product is a great way to gauge customer interest and test the waters before investing a ton of money in inventory.
While it’s an important step, none of us have a crystal ball so I don’t recommend spending a ton of time or money to do it. It only requires a little number crunching, listening and some reflection.
Mistake #2 Pricing products incorrectly
Knowing your numbers and having a pricing structure that makes sense is the foundation of a successful product based business. Your pricing strategy selling directly to the customer is going to look very different from selling to a store which means there is a lot more room for error and profit loss. Spending some extra time on the numbers now can save you lots of money and headaches down the road. I know it can be a bit overwhelming so I’ve created this awesome pricing workbook which you can snag for free here!
Mistake #3 Trying to compete on price alone
Another mistake I often see is trying to compete on price alone. Undercutting the competition to make the sale isn’t the answer! While it may bring in some dollars at the beginning your customer base will become comprised of people who tend to prefer price over great design. If your price goes up how likely will they be to stick around? While this strategy definitely works for some businesses (ahem, Walmart) really weigh the pros and cons before deciding to go this route. As a customer, I’m always drawn to great design first. If I truly love it, I’m willing to pay for it.
Mistake #4 Trying to appeal to everyone
Trying to appeal to everyone or going the “Every store with a door” route isn’t going to get you very far and will have you spinning your wheels. Your assortment will end up looking choppy and incohesive which can lead to consumer confusion. Make it easy for customers to get to know you buy deciding on your niche and creating products that your target market will love. I know you’ve got so many ideas swirling in your head, but you don’t necessarily have to introduce them all at once. Position yourself to be known for one thing, then add new products as your customer base grows. When you know exactly who is buying your products and are able to speak to your customer’s key traits you will help establish yourself + your business as an expert.
Mistake #5 Reaching out to buyers with Holiday in October/November
Here’s some real talk: if you want to sell to stores this holiday season and you’re planning to reach out to their buyers in October/November for orders you’re going to be very disappointed with the results. Store buyers book their goods months in advance so chances are, they’ve spent their money already. You should be thinking about holiday NOW and be finalizing your collections so you can start reaching out sooner than later. Even if buyers aren’t ready to place their holiday yet, send them the information so they know you have new products on tap for holiday. Not sure about the best time to start reaching out to your buyers about holiday? Contact them now and find out! Here’s a sample script you can use to start the conversation:
I’m in the process of finalizing my holiday collections and I wanted to give you a sneak peek at some of the awesome new styles being added to the line! Can you believe we’re already halfway through the year?! While other people are thinking about backyard BBQ’s we’re already talking about (Christmas).
I’m curious to know, when do you start thinking about holiday? I know everyone works on a different schedule and I want to be sure you have everything you need from me to work on your Q4 orders.
Mistake #6 Not keeping in touch + cultivating relationships with current customers
You work HARD to get those customers + stockists so don’t let the relationship end with the sale. When customers feel the love you make it a no brainer for them to come back and shop with you.
Find creative ways to stay connected with them that don’t include asking them to purchase, doing so will help prove to them that you’re in it with them for the long haul and you’re not just trying to make a quick buck.
Mistake #7 No presence or poor presence on social media
If you neglect your digital footprint you are doing your business a disservice. Most people will head straight to social media to learn what you’re all about before deciding if they want to purchase from you. As amazing as your product may be if it’s hard to find you online people will most likely move on and you will have missed out on an opportunity to gain a new customer. If the thought of posting something everyday makes your head spin consider utilizing a scheduling tool or app to streamline the process. Struggling with setting your own social media strategy? Check out this post about how to use Instagram to grow your business (it includes a free workbook!) You can then use some of these strategies to develop your own plan for other platforms like Facebook, Twitter or Pinterest.
Mistake #8 Not making customer service a top priority
Poor customer service is a major pet peeve of mine. You can really learn a lot about a business from how they treat their customers, but especially how customers are treated when things go bad. When things don’t go as planned, some small business owners tend to wait as long as possible before addressing the issue or they suddenly become super difficult to get in touch with. They do everything to avoid having an unpleasant conversation with a customer or buyer out of fear that an order will be canceled or the conversation will take a quick turn to negative town. Challenging conversations are part of doing business, so it’s better to address the issue, learn from the problem and move on. While the customer may not always be right, they should always be respected.
Mistake #9 Not acknowledging when you need help/trying to do it all yourself
As a small business, it’s tempting to go the DIY route as much as possible. Budgets are limited and when it feels like there is more money going out than coming in the last thing you want to do is spend money on something you can do yourself. The problem with this is that the second you start to overload your plate, things start to fall through the cracks. You also can feel bogged down by the things that don’t bring you joy in your business. For instance, if creating is where your passion lies and selling makes you want to crawl into a hole and hide consider hiring a sales rep or in-house salesperson. If the company’s sales solely rest on your shoulders and you hate doing it, they will probably not be as strong as they would be if someone who loved it was doing the selling.
Mistake #10 Not having a plan
Running your business without a plan in place can lead to lots of unnecessary stress and overwhelm. Crowdsourcing the answers in Facebook groups and seeking information out online is where most people start but in doing this you run the risk of receiving bad information or info that doesn’t pertain to your exact business. The quickest way to develop a plan? Team up with someone who understands the industry and has been in your shoes. Whether that’s me (and I hope it is!) or someone else, seek out a reliable resource to point you in the right direction and connect the dots. Curious about other ways a product based business consultant can help you? Check out this post to help you decide if hiring an expert is the best move for your biz!