Why Private Label
Private label products are the answer to dwindling profit margins and saturated markets. Developing your own private label product line allows you to sell products with unique attributes at a higher margin, all while building your own brand equity. With the progressive transition to ecommerce, having a unique product and brand to offer the consumers is essential. Without it you are just offering the same products as the next guy, and eventually, that becomes a race to the bottom.
Often times I have clients that start a private label program, and then look to hire someone to fill the role. This is not as easy of a task as you might think. There are a variety of skills you need to be efficient when developing products. It’s a position that takes both analytical skills and creative skills. Typically, people lean one way or another. There are degrees of involvement for each product you are working on. Some projects are ground-up productions where every detail needs to be attended to, and other projects are just aesthetics and branding.
It’s Not That Easy
Over the years I have had the opportunity to develop a lot of products for the motorcycle industry. It is usually one of the more fulfilling parts of the job, but it can also be one of the most frustrating. The frustration comes from people that have never really developed a product and their ability to think that it is a “fun” and “cool” job. Developing products for clients is one of the more enjoyable parts of the job, yes, but it not as easy as people tend to think. Imagine a highway filled with huge potholes and you are travelling at 80 MPH. If you don’t know where those potholes are, you are going to hit one, and when you do it is going to cost you and your client. Developing the product is a small part of the task. First you need to be creative enough to come up with a product that is unique. You need to negotiate tooling and you need to have a trustworthy source to produce the product. You need to know the manufacturing capabilities and understand the processes used to make a variety of products. You need to know how to engineer the product so it won’t fail. You need to know how to create the packaging and what the branding guidelines are. You need to understand what the steps are to legally protect the product. What are the required warnings and notifications that need to be on the packaging? What information do you need to maintain records on? You need to know how to do the pricing analysis. Who are you competing against? How does this effect the products in your current assortment? What are the risks and what do you need to do to avoid those risks? Is the product going to sell when it is completed? What is the best way to get it into the market? Can you effectively communicate the benefits of your product vs everything else that is on the market?… and it goes on and on….
Going After the Wrong Candidates
I remember working for a company and I had a team member that had been working at that company for a long time. This employee was good at their job and they had sufficient experience in that job to identify and avoid some of those potholes I previously mentioned. After some terrible decisions at the top level, they decided to leave the company. When I heard the news, I remember trying to explain to my boss what an issue this was. My boss (who will remain nameless because I actually like the guy) told me that everything was going to be fine. “We are going to hire an MBA for that position.” I didn’t know how to respond….speechless.
I have nothing against education, but companies need someone that understands the industry we serve. I have hired literally hundreds of people over the years and every single time we hired someone solely based on education, it was a complete failure. The two main contributing factors for the failure was the person did not know our customer or the culture, and they felt like they were entitled to have everything done for them because they had a degree. If you are going to hire someone, make sure they participate in the activity you serve. Would you hire an auto mechanic to do your heart surgery? Then why are you hiring a person that has never even ridden a motorcycle to develop your motorcycle products? Sounds crazy, but there are numerous examples of this in the industry today.
Innovation rarely comes from spectators. Innovation comes from people participating in the activity.
The best products solve a problem. Simply put, you cannot find those problems if you are not participating in the activity. If you want to hire someone to develop hiking products, hire someone that loves to go hiking! It’s not very likely that a professional bowler is going to develop the newest hiking product. Typically, the pro bowler is going to develop a new bowling ball, or bowling bag, wrist brace, or whatever.
Knowing this, I tend to recognize issues I have when I am using products while enjoying what I love.
One of the items I created in the past was a simple tie-down with a carabiner on one end for KTM. We used to ride in some areas where just getting there was part of the adventure. All of the tie-downs in those days had hooks, and when you have 3 bikes in the back of your truck and you are driving through ditches and over logs, those hooks would pop-off the mounts. This only happened a few times before I decided there had to be a better way. So, I developed the first tie-down with a carabiner. KTM sold (and is still selling) tons of these. Since then, the product has been copied numerous times. We never patented the idea, but I probably should have. The point is, I would have never recognized the need if I wasn’t participating in the activity.
Make sure you hiring the right person for the job. If you can take the time to find someone that has education, experience, and participates in the activity your company serves, you are going to see good results. Participation is just as important as education in this industry. It’s a must have.