Your product or app is ready to launch, but are you prepared for what comes next? We talked to Fred Cary, CEO of IdeaPros, and Matt Behrendt, COO of IdeaPros, about mastering the special operations processes and launch secrets that can save you thousands of dollars.
Going through special operation processes means having a precise plan ahead of time, knowing what you want to accomplish in advance. Protecting your margins should be part of that plan. It is vital to think about transportation, logistics, fulfillment, distribution, import, and export. Once your product is ready to launch, you have to warehouse it somewhere, get it to your customers in the most cost-effective way, and make them happy.
One of the first tangible things is understanding duties and taxes as they are applicable to anyone bringing in foreign assembled or made products. The government uses a book to identify how much taxes you should pay for that product. It ranges from duty-free up to a hundred percent. You want to know this percent in advance to help you better prepare financially.
People understand the transportation costs. They’ve gone through the due diligence of understanding their costs of goods, accepted the MSRP and advertised it, or signed the agreement. Then all of a sudden they realize there’s an extra 10% to 15% of costs, and that is not a fun place to be.
The other thing you need to understand is how to import your products. A kit with multiple items can be classified differently than when you are bringing the item separately. You need to know these issues exist. You should be able to ask questions about this part of the process. It is possible to research the official tariff schedule that every country has, but you will most probably need help understanding it to a full scale.
Once you’ve navigated the challenge of duties and taxes, you have your inventory in a warehouse or your garage. Then the orders start coming in and you start asking yourself: how do you create a quality customer experience? What is your strategy to quickly get the orders into your customers’ hands? Do you know what they want, fast delivery, or the best price?
“I define sales as a transfer of belief. I’ve never met anyone in a company that is better at transferring belief in their product than the company’s founder.” – Matt Behrendt
Focus on growing your marketplace, transferring that belief in your product to your clients, and growing your customer base. Then you will be ready to perform in the end zone.
Seeing your product on the shelves of a big-box retailer is an amazing experience, but there are things to consider. When you sell directly to the consumer, you will make 20%, 30%, or even 50% more margin. As an entrepreneur, you want to track where the sales go and what is driving them that way. So when you talk to big-box stores, you can tell them about your demographic and increase chances for success by protecting your margin. They have a markup of what they want to make and that markup is coming out of your pocket. Usually, they will define in the vendor agreement how you need to receive orders, what you need to give them in advance, and how the pallet needs to show up at their distribution center. You will pay for anything that is not in compliance with these conditions. Also, when the demand goes up, and you can’t deliver, you are going to lose that account. On the other hand, if the demand goes down, you will end up with a garage full of products that no one wants to buy.
“By launching directly to consumers, working out the bugs, understanding the demographics and the cause of sales, you are armed to go to retail and can protect your margin.” – Matt Behrendt
Arm yourself with all the tools you need, keep your eye on the ball, and you WILL make it through the end zone, too. It will be worth it.
The “Idea Pros” at IdeaPros have the resources, experience, and tools to help you at this step or any step in the entrepreneurial journey.
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