In an effort to narrow down my product choices, I’ve been trying to decide whether it is better to Invent, Import or Distribute a product. There pro’s and con’s to inventing, importing and distributing. I’d like to explore each and how the rules factor into the decision.
Import:
Import would mean finding some product from another country to bring to the USA and create a market for.
Pros:
- It would seem fairly easy to find something that isn’t already available in the USA.
- No need for R&D.
- Manufacturing would already be handled by another entity.
Cons:
- The weak dollar limits the number of countries available for favorable terms. Basically some parts of Asia and Latin America seem to be my main options.
- If your exclusive supplier is unreliable, the business will operate entirely at the whim of another entity. In order to have any clout, or safety, I’d have to be ordering quite a bit of product at once.
- Shipping adds costs and delays.
Invent:
Inventing means coming up with a new idea, finding someone to design it, engineer it and manufacture it.
Pros:
- Your idea means that there may be limited competition for it once the product is ready to come to market
- If the idea is somewhat radical, my marketing can decide what the most advantageous price point is. In this experiment, I really want to keep the number of transactions to a minimum with high margins on each transaction as that will be easier to manage.
Cons:
- Could cost $25,000 or more just to patent if Iwanted true protection.
- Will be difficult to follow the rules while having the product designed and manufactured.
- Costs for outsourcing design and manufacturing could be very high.
Distribute:
I would define distribution as taking a product that already exists that may or may not be well known and getting a wholesale agreement to resell the product(s). This is what Amazon.com, newegg.com, etc. do.
Pros:
- No need for R&D.
- No need for manufacturing – The game basically becomes marketing and logistics.
- Probably will be easier to find US-based wholesalers to buy from, making it easier to streamline the logistics and save money on shipping.
Cons:
- If I’m selling a brand-name product that is the same as the one you can get at BestBuy.com, it is easy to become a commodity-type business, which goes against my current desires for a product.
- It takes time to find and build relationships with wholesalers.
It would appear that I haven’t really decided either way just yet. There are pro’s and con’s to each approach. As of right now, my product summary doesn’t change. I will continue to think about how to narrow down my product.
Current Product Selection Summary:
My thinking is now being directed towards locating a tangible product for women possessing properties that would allow it to be marketed as expensive, luxurious and/or exclusive. This product should also be constructed of environmentally sound materials, allowing ”go green“ to be an additional focal point of the brand.
