today's guest post is from andreea ayers of launchgrowjoy.com
If you sell a product, you know that there are so many aspects to running your business, especially if you sell both at the wholesale and retail level. There’s your website, your blog, your social media accounts, your e-newsletter, your manufacturing, your marketing, your sales, your customer service and everything in between.
How do you know what to focus on to ensure that your time is well spent and that you are setting up your business for success?
1. Get your pricing right
If your pricing is not set up correctly and your margins not high enough, no matter how many products you sell you’ll always feel that you never have enough money in your business. When determining your pricing, think about how much you want to pay yourself (yes, you’ll have to pay yourself if you want this to be a sustainable business for you!), whether or not you’re going to be working with sales reps, distributors and showrooms (since they take a percentage of your sales), whether or not you are going to be donating a percentage of profits to charitable causes and how much outside help you need.
There is no “one size fits all pricing formula,” but if you follow the guidelines below you’ll achieve margins that will keep your business going for a long time:
- To determine your wholesale price add your manufacturing costs (ALL costs including shipping of your products to you or your fulfillment house and your time if you hand make your products) and multiply them by 2 to 2.5
- To determine your suggested retail price, take your wholesale price and multiply that by 2 to 2.5
If you follow this formula you’ll ensure that you can pay yourself, pay sales reps and others who will be working for you and have enough money for a marketing budget.
2. Pick two social media networks and focus
While it’s tempting to try to participate in all social media networks, this can become really overwhelming. At this pace, you’ll start to feel that you are not getting results because your efforts are spread too thin. It can be a full time job just managing social media! Instead of trying to do it all, why not pick two networks and focus all your efforts on those two?
For entrepreneurs with a product line selling directly to consumers, consider spending the majority of your time on Facebook and Pinterest. This is where I’ve seen the most return on investment for product-based entrepreneurs. You should still have a Twitter, LinkedIn, Google+ and YouTube account for yourself or your business and you can use those sparingly, but if you want to use social media to get directly in front of your customers, Facebook and Pinterest are going to give you the most return on your investment.
3. Follow up
If you are not following up with your customers, your retailers, potential partners or the media, you’re missing out on a lot of sales. It’s easy to think that if a potential store didn’t answer your initial email then they are not interested in selling your products at their store. Or if a reporter didn’t call you back when you pitched your products for their publication, it’s easy to assume that they are not interested.
But did you know that it takes an average of seven times of exposure before someone takes action? That means that you’ll need to constantly be in front of those retailers, customers, media or partners if you want to see results. Don’t assume that if they didn’t reply to your initial message that they are not interested. Instead, follow up a week later, two weeks later, a month later – but it’s critical to follow up with EVERYONE you come across. The same goes for your email newsletter. Send it on a regular basis if you want to see results from your email marketing efforts.
4. Be consistent
Consistency is the key to getting long-lasting results. Whether it’s blog posts, press pitches, wholesale outreach, email newsletter, attending trade shows or setting up an advertising campaign, doing tasks on a consistent basis is critical for success. For some entrepreneurs, consistency means every day, for others it may mean every week or every month.
Whatever you define your “consistency” to be, stick to it! Send out your email newsletter on a regular basis (let’s say the third Tuesday of every month), blog regularly (maybe every Monday and Thursday) and if you decide to advertise your products in a magazine or on a blog, advertise monthly for six months. One-off or inconsistent activities will get you inconsistent results. If your online shop is getting sporadic sales, it’s most likely because your marketing efforts are sporadic. Stick to it consistently and you’ll have a winning formula for success.
5. It’s all about marketing
So many entrepreneurs think that if they set up a website, a Facebook account, or an Etsy store, the sales will automatically start coming in. This couldn’t be farther from the truth and setting those up is just the beginning. Actively marketing your products – whether it’s through social media, email newsletters, contests, trade shows, partnerships, publicity, affiliate marketing, sales reps, networking, advertising or any other form of marketing (and doing it on a consistent basis) is critical to getting your brand and products in front of your customers and increasing your sales.
Create a yearly marketing plan and set aside a marketing budget. Your marketing budget can vary widely depending on your goals and the stage you are at in your business, but for a product-based business it should be in the rage of 1% to 10% of sales. Investing this money back into marketing your products and growing your business is critical for long-term growth.
Keep these five tips in mind as you’re growing your product line or expanding your brand. There are, of course, a lot of other things to focus on, but if you run your business with these five tips at the forefront, you’ll see a lot of sustained growth, sales and profits.
Andreea Ayers is a mom of three and a successful entrepreneur who has sold two businesses. She currently works with entrepreneurs to help them grow their business by getting their products into stores and in the media. Get more great tips for product based businesses at her site LaunchGrowJoy.com