EP14 – How To Manufacture Your Product Idea (Even If You’re Starting From Scratch)

Listen to the Episode Below (1 hour, 12 minutes, 56 seconds)

Mike DiMartini’s first entrepreneurial pursuit was with his brother managing rental properties, but he soon realized that he wasn’t spending his day to day doing what he was passionate about and the rental properties weren’t generating him the cash flow he needed immediately.  You see, his wife was about to have their first child.

Mike was in the waiting room while his wife was in labor when he realized that he wanted to open a store in the watch niche.

Mike found a manufacturer that would produce his idea for rubber watch bands for Rolexes, launched a Kickstarter campaign and then opened up his successful Shopify store.

In this episode you’ll learn:

  1. how to crowdfund your business using Kickstarter
  2. how to find a manufacturer and to create your product idea from scratch (including the critical mistake Mike made that you can now avoid)
  3. and at the end Mike reveals the two pages he added to his Shopify store that turned confused visitors into educated visitors which he then turned into his customers

Let’s dive into the show notes…

Guest

Michael DiMartini from EverestBands.com and LuxWatchStraps.com
Michael DiMartini from EverestBands.com and LuxWatchStraps.com

Links

Background

  • Worked in real estate
  • Wanted the lifestyle from the Four Work Week by Tim Ferriss
  • First entrepreneurial pursuit was partnering with his brother (Mike’s brother successfully sold his company and is a multimillionaire) to buy 150 apartments in St. Louis and that experience taught him a lot about running a business
  • Started his business because he has a passion for watches

What Mike sells

  • EverestBands.com
    • Custom-made rubber watch band for Rolexes
    • Plans on launching a leather watch band for Rolexes
  • LuxWatchStraps.com
    • Lower cost watch straps
  • Manufactures products from scratch, but also sells products from other brands

Funding products through Kickstarter

  • Used it to fund the rubber strap design
  • Also running a second Kickstarter campaign [RELATED: Andrew Gardner used Kickstarter to raise $800K and launch PolarPen.com]
  • KickStarter helped validate his product
  • Mike would do crowdfunding through Kickstarter over and over again because:
    • Kickstarter helps you get off the ground with an easy way for you to set up a page to promote your product
    • Kickstarter helps promote you
    • Already has a customer base that searches for products
    • Covers the processing of credit cards
    • Gives you funding
    • Teaches you how to deal with your prospective customers
  • Mike crowdfunded rather than getting a bank loan or borrow from friends and family because KickStarter gives you the opportunity to just sell the product and not have to think about paying the money back like you would with loans or borrowing
  • Promoted KickStarter campaign through
    • Social Media
    • Bought Facebook Ads
    • Got involved in the watch forums and talked to customers and posted images of products
    • Connected with influencers
  • After the campaign ended, Mike immediately paid for products, packaging and shipping with the $14,505
  • Included a tier on his KickStarter campaign targeted at other retailers that might want to buy his product wholesale
  • Biggest lesson learned between first and second Kickstarter campaigns
    • Overpromised in the first campaign, it’s better to be honest and conservative with your delivery estimates (it’s better to underpromise then overdeliver)
    • Example is the Pebble Watch, they raised a lot of money but was very late in delivering the product
  • Keep the backers happy so that they will continue to promote your product for you (word of mouth marketing)

Life after Kickstarter

  • Created the ecommerce site before the Kickstarter campaign
  • Main goal for the Shopify site was to focus on the presentation of just one product, then focused on SEO, and finally focused on social media to build an audience and taught them the benefits of the products for sale
  • Was getting 50 to 60 visits a day during the Kickstarter campaign
  • Now has 500 to 600 visits a day generated from:
    • Referral traffic
    • Facebook
    • Google+
    • Organic search and paid search

How much Money to budget for a new store

  • Buy Shopify template: $15
  • Optimize and customize the site: $1,500 to $2,000

How much Time to budget for a new store

  • Reaching out to people to get their feedback
  • Blogging
    • Mike blogs about future products; not pitching the product, but educating the customer

Starting a second store

  • Motivation was because Mike was a big fan of all types of watches (not just Rolex) so he wanted to expand to other watch straps that would reach a larger customer base and be more affordable
  • Biggest challenge of running two stores is keeping the books in order (not only the two Shopify sites but the other platforms they sell their two brands on)

Running a store day to day

  • Full time job for Mike and his partner working from 8am to 6pm
  • Graphic design and more complex marketing is outsourced
  • Mike and his partner try to handle as much as he can to ensure healthy profits
  • Schedule:
    • 8am
      • Show up for work
    • 8am to 11am
      • Start off replying to all the emails (usually 5 to 35 emails a day)
      • Manufacturing related work (communicating with manufacturers, purchasing from suppliers, come up with design for production)
    • 11am
      • Take a 30 min break
    • 12pm to 3pm
      • Focus on social media and marketing (writing blogs, 500-700 word blogs, image editing) for the rest of the afternoon
    • 3pm to 5pm
      • Fulfillment – packaging all the products sold that day, printing labels on the content of the shipment, handwrite “thank you” notes
    • 5pm
      • Leave the office
    • 5pm to 8pm
      • Spend time with family
    • 8pm to 11:30pm
      • Tweaking things for the next day

Why have a partner?

  • You have to realize that you’re not good at everything.  Mike is good at managing manufacturing and marketing, but he’s not as good at sales so he looked for a partner to fill that gap.
  • When starting out, look at what you’re not good at and find out if you can hire someone that’s just as good for a lower cost or find a partner that would be willing to take on an equity interest (instead of a paycheck)
  • Having a partner is like a marriage
  • Do not be a partner with your best friend because you are too intertwined and if you’re only talking about work it will get boring and negative.

How to manufacture products from scratch

  • Start with Alibaba (for manufacturing or even if you are reselling an existing product)
  • Be selective with the products that you’re adding to your store so you can focus on doing a great job of selling just a few products (like investing in great pictures for just a few products rather than mediocre pictures for a lot of products)
  • Evaluating manufacturers
    • If you are manufacturing a type of product that already exists, find a manufacturer that has made that exact type of product before.
    • For example, Mike learned from his mistake of hiring a manufacturer to make his watch bands, but that manufacturer never made watch parts before.
    • Ask for samples
    • Ask to see a list of clients that they’ve worked with in the past
    • Beware of manufacturers that have never manufactured the type of product you want, but say that they can do it
  • Need to find a designer that can produce designs in CAD
    • Find a designer that has designed something similar
    • Send the CAD files to the manufacturer and get samples
    • Find designers on CAD forums or on Craigslist

Success of the business

  • Business is doing over 5 figures a month in sales
    • Enough to support Mike and his partner
  • Had to take the leap of faith and rely on his savings and odd jobs in the real estate development field early on
  • Most entrepreneurs quit because they’re not willing to make the lifestyle sacrifices when their business is in it’s infancy and not generating a ton of revenue, yet

How Mike dealt with doubt

  • Hearing the positive feedback from customers
  • Entrepreneurs from outside of the business that said “wow, this is a great idea”

Biggest change that increased sales

  • When Mike first started his store, he made the assumption that his visitors knew everything there was to know about watches and watch bands
  • So the change he made was to create pages that educate the customer on watches and watch bands first
  • Set yourself up as the expert or educator which helps you get your visitor to “know, like and trust” you which makes it easier to turn them into a customer
  • Take the product that you’re selling assume that the visitors have never seen anything like it before and then craft your product descriptions and product photos around that belief
  • Sometimes customers don’t buy because they don’t know why they should buy

Last piece of advice

  • Go with the best.  For example, once Mike went with a more experienced, high quality (and more expensive) manufacturer, his business took off even though he had to raise prices to offset the higher manufacturer costs

Sponsored By

Promotify lets you collect, curate, and display customer-generated photos on your store.

Promotify