There are currently more than eighteen million businesses in the United States, of which 73 percent have four or fewer employees. Businesses are wildly popular here in America, although business owners take on significant risk. They can lose their entire investments due to business failure, going broke and unable to support their families. Owners may forego other, more profitable opportunities they could pursue, choosing to forego them in the name of their businesses. Products can flop, effectively wasting all the hours and thousands of dollars spent on market research, design, and production. Here are several strategies for avoiding product pitfalls, saving money, positive mental health, stress, and your organization’s reputation.
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Meet the Needs of Customers with Products
Products should be designed and marketed to meeting the needs and wants of consumers. This can be analogized to appliances using electricity. Appliances’ plugs fit into sockets. Sockets aren’t created just for plugs — plugs, conversely, are created to fit into sockets. Electrical sockets are different all around the world, varying by country. A manufacturer makes their appliances’ plugs based on what sockets are like in the countries being sold, rather than forcing United Kingdom-styled plugs into United States-style sockets.
What can business owners do in developing products to fit this analogy? Owners should thoroughly research what their average customers are interested in, look into demographics in areas you plan to sell products in, and how many competitors make products similar to yours, if any. Products can be innovative, unlike plugs in the above example, as long as they meet nearby customers’ interests. Never anticipate forcing products on consumers, as the strategy will work in very few scenarios.
Build your own Brand
Many resellers that engage in selling products on Amazon often purchase products from other sources for below-market products, mark them up, then profit from their online sales. This business model is common among retailers, online stores, and many other companies. Because manufacturers sell these products to many businesses, it’s hard to gain a competitive advantage over other resellers of similar products.
Creating a private label of products is ideal for gaining and maintaining a competitive advantage as a business owner. This creates the opportunity for making more money than reselling another company’s products. Business owners can’t create a competitive advantage by reselling other products, but they can create and maintain such an advantage by forming one’s own line of products.
Being Geared Towards Scaling
When businesses grow, they scale upwards. Scales of economies refers to businesses becoming more efficient and opening the doors for higher profits as they grow larger. Per-unit costs dive downwards, fixed costs like regulatory expenses or business licenses stay the same no matter the business size, and it becomes easier to gain customers as they scale upwards. If your business’ products aren’t geared towards growing towards more-profitable capacities and sizes, your products are more likely to experience a pitfall or flop.
Taking Tips from Competitors’ Successes
There’s only one NBA player who scores more points than every other player. Likewise, only one business is more successful than every other competitor, with all other businesses trailing behind that number-one organization. Businesses should model their own products after competitors’, adapting positive aspects of their successes into your own.
Risk is an inherent part of business. Business owners are faced with a trove of responsibilities, ranging from paying employees to feeding their own families. If products fail, money, time, and effort go down the proverbial drain, not to mention businesses themselves experience performance decreases. Following these tips above will help any business avoid product pitfalls.