I’ve worked with many artists and product designers who have needed help turning their successful DIY project into a full-scale, mass-production business. Creating your product is often a labor of love, but when the product takes off you might have trouble keeping up with demand.
In other instances, you may want more time to focus on marketing and selling so you can turn your passion into a real business. Below is a roadmap illustrating how to successfully go from DIY to mass production, which could become the cornerstone of a profitable business!
Step 1 – Mentality shift from artisan to business owner
Remove the emotional connection between you and your product and replace it with a connection between you and your new business. Maintaining an emotional connection between yourself and your product will only hinder your efforts of growing your business. An effective way of doing this is by asking this question: If you’re not making the product – then what WILL you be doing? Create a new job description for yourself now that you are no longer the manufacturer. This will help fill that creative void and allow you to make better, unbiased, decisions about your business going forward.
Step 2 – Challenge the assumption that your product can be sold to a wider audience
I meet with artists who have people chirping in their ear that they “should” sell their product here or there and make a real business out of it. How do these people know? They don’t! Before you approach manufacturers, try selling your product in different markets at different venues. Approach some local gift shops and pitch your product to the owner to gauge their interest. It’s a natural trap for a designer to focus on the manufacturing aspect before knowing if their product can sell to a wider audience.
Step 3 – Determine the retail price point
The next step is to assess the market and determine if you need to adjust your retail price point. The price should be in-line with similar retail products to yours in the space(s) you are looking to sell. The pricing needs to be a good fit for the sales rep or retailer you’re targeting, otherwise, they won’t be interested. Furthermore, your retail price point will be the basis for calculating the ideal cost of goods when you approach manufacturers.
Step 4 – Identify and calculate your costs of goods
As a general rule for retail products, the cost of goods should be at most ¼ of the retail price point. This allows you to sell your product at a wholesale price and still make money. Look at the cost of materials and estimate what your labor costs currently are. A good manufacturing partner will be able to help you keep your costs down while maintaining the integrity of the product. But if you’re using specialized materials that account for a large portion of the costs, or the labor requires a unique skill to create the product (i.e. a higher cost craftsman), you may need to consider a redesign.
Step 5 – Search manufacturers
You can search for domestic manufacturers on sites like thomasnet.com. If your product is labor-intensive, it might be best to look overseas. There are sites like Alibaba that can connect you directly to factories in China, but you’re likely better off using a sourcing company that can facilitate the communication with a foreign factory, perform quality control and handle the logistics of importing the product.
Step 6 – Get detailed quotes from multiple sources
Get quotes from at least three manufacturers and make sure they include all development costs and lead times. For example, if you’re buying material from a local fabric store, the manufacturer may not have access to that exact pattern. They could propose to print the material themselves which can result in high printing set-up charges and minimum order quantities.
Step 7 – Make pre-production samples
Be sure that the manufacturer has the ability to make pre-production samples prior to running several thousand of your product. There might be a small charge to have the manufacturer do this but it’s a critical step to take to ensure you have seen a fully functional product that is representative of the production run before you commit to an order.
Step 8 – Make a smooth transition
Run a small “test” order or two before you completely let go of making the product yourself. Unforeseen issues can come up in terms of quality, packaging, shipping/transit of the finished goods, etc. You’ll want to make sure you do at least one or two trial runs with a manufacturer before you fully transition the production to them.
About the author: David Ortiz is co-founder of NextDoor Design & Manufacturing. NextDoor helps small businesses grow by facilitating their product development and production in China. Their clients are lifestyle brands whose products can be found in stores such as Anthropologie, Urban Outfitters and Restoration Hardware.