I've had a lot of requests to talk about the nitty gritty when it comes to working on your product line full time. The main issue I know that many people struggle with is money. Sometimes it can feel like there's just never enough, especially when you're first getting started and have a million great ideas that you'd like to see take shape! When I decided to work on Native Bear full time I only had $500 in my savings account (half impulse decision, half needing to get out of a toxic work environment), but it was right at the beginning of the holiday season so I felt like I could make it work. I signed up for every local craft market, and kept focusing on marketing my Etsy shop (especially to family members and friends!). I wouldn't suggest jumping head first like that necessarily because, as you can imagine, there were a lot of terrifying broke moments that I may have been able to avoid if I had saved more and transitioned into full-time.
When launching a new product there are some very basic questions to consider. As much as I love the freedom and lifestyle of being my own boss, I know at the end of the day I need to make money. My brand needs to be sustainable for growth and change. There are three big questions I need to answer first:
Is it profitable?
There are many different ways to come up with the pricing for your new beautiful product, but my favorite is a formula that I learned from an Etsy blog post years ago written by Megan Aumen called Pricing for Profit:
Materials + Labor + Expenses + Profit = Wholesale x 2 = Retail
Materials = cost of physical pieces that make up the product + packaging
Labor = the cost of a living wage to make product (even if you're the one making it. What is a fair, decent living wage for this job?)
Expenses = all overhead costs, including studio rent, utilities and any extra costs you can think of (etsy fees, paypal fees, website subscription, etc.)
Profit = how much profit you need to make for continued growth of the business
What does your price look like? How does it compare with competitor's pricing? Is it an appropriate price point that retailers won't shy away from? Everyone will have different criteria when it comes to calculating pricing so it's important to taylor this formula for your particular brand. Even if you focus mostly on ecommerce retail and selling at craft markets you should still be profiting at your wholesale price. Customers are accustomed to retail pricing, and when a boutique owner approaches you about offering wholesale then your pricing is already clear and ready for business!
Does it represent my brand's goals?
This may seem like a dumb question but it's not. Is the new product you're introducing something that will advance or embolden your brand's image and overall vibe? Is it something that you want to carry in your line forever, or is this just a seasonal/limited edition item?
In my experience, I have had fun with launching new seasonal/limited edition items for my line but it can be a bit exhausting. In Fall 2015 I launched a small line of hand printed canvas tote bags that sold really well, however, I realized at some point that I was exhausted from the process of making them. I'm not a bag maker by trade, so I had to outsource labor in order to keep up with the demand and I felt that the whole process was distracting me from focusing on developing more paper goods and gift designs - which is the primary focus of Native Bear!
Not to say you shouldn't experiment with different products, but just keep in mind what you want to be known for. Often times brands will wait until they're more established and will reach out to other brands to collaborate on a new or limited edition product. This is a great way to offer something new while minimizing upfront costs, and also benefitting from cross promotional efforts.
How can I hype this?
Use social media to document your process and build momentum. Gauge your customer's interest in the product by asking for their opinion on color schemes. We are lucky to be makers and artists during a time where your ideal customer is just an arm's length away through social media - what are they telling you?
When I came up with the idea for the Boob stamp kits I knew it would be a hit, but since it's the slower summer season I also had very limited extra funds to launch new products. The setup cost of having stamps like this made is a pricey investment so I decided to take preorders. Here are the steps I took to get the Boob stamp kits launched without going in the hole (after I figured out my pricing):
1) I had a prototype set made so that I could take some nice product photos and get them ready to publish on the website and social media
2) I established two separate preorder by dates; one for my current retailers and one for the general public. I made sure to FIRST email all of the shops that currently carry Native Bear to give them a chance to preorder, and THEN I sent out a newsletter to my general mailing list. It's important to give your retailers the heads up on new products coming down the pike and you should always give them the first opportunity to order.
3) I offered a free shipping incentive! I felt like the stamps would be a hit, but I wanted to make sure I included an incentive for the preorder. Free shipping is a nice perk that you can offer without any upfront cost.
After about 2-3 weeks of accepting preorders, I was able to make back the upfront cost of getting the stamps manufactured. This is where a business credit card can come quite in handy! Just make sure you immediately pay off your initial costs with the money you make through the preorders.
If you are a small brand then you should really embrace the power of the preorder. There are ways of getting your product out there without having to rely on an excess of funds, but you just have to think creatively! It's easy to get into the "I don't have enough money" rut (everyone feels this way), but if you push beyond that feeling just a bit you can usually figure out an alternative solution.
PRO TIP: Reach out to blogs that share your aesthetic and let them know about your new product!! This might seem like a scary thing but it's not. Look up their criteria for product features and email them a short blurb about your great new item. It's no cost to you, and the worst that can happen is they'll say it's not a good fit. You might have the best new product in the world but it doesn't mean much if you don't let people know!