Episode 15 - MANUFACTURING (plenty of choices)

This week Jack discusses how he would manufacture his new product--two seperate ways.

He also talks about the process of getting your product out there BEFORE using the internet.

Episode Transcript

(00:15):
So tell me if you've heard thisone before. I don't know. Man,
When I get to manufacturing, Ijust don't know what to do.
I don't trust anybody. My money'stight, and then when I start talking
to overseas manufacturers, they all justseem shady. Is it always this terrible?
First? Take it easy. Second, It's not just one big leap.

(00:42):
It's a lot of small steps andafter a while, you get the
hang of it. Hey, everybody, welcome back to the thirty year Overnight
Sensation. I'm your host, JackCourage, and this podcast is a conversation,
not a class. If you're anovice invetter want to be an inventor,
I'll take you through the steps ofdesigning, manufacturing, selling, and

(01:07):
getting your product out into the market. This podcast is not a front for
a subscription service or some company tryingto generate money off of your ideas.
It's about the trials of inventing andit's not easy, but you can do
it yourself. You just have tobe smart about it. Okay, so
far, I've had an idea forour sports craze, the hand Flag.

(01:30):
I've gone through the pro typing ofthe product while testing it. Just a
little bit, and now I haveto get serious about manufacturing. And I
have to tell you every time I'vetried to prepare for this dang episode,
I've had to start over. Thereason is that there are so many ways
to go about manufacturing anything that it'shard to give an inventor the correct perspective.

(01:56):
In this episode, I will tryto give you two perspectives on how
I would manufacture this product, andas I said, it's not easy.
But before we get to that,I also have to note that when you're
inventing anything, you do have downtime, and that is when you make the
most of that time to make likecalls. In this case, since I

(02:20):
had a good image of the handflag and samples, I wanted to start
to get it out in front ofthe Women's Soccer League and their sponsors.
The strategy was by the time Igot someone interested, I would have the
manufacturing base costs figured out. WhatI will tell you is that convincing people
even to take a look at yourproduct is more of an art than a

(02:44):
science. I found out very quickly, and I wasn't surprised by this that
the Women's League was not interested inanybody small or medium for that matter.
They had set their fees for sponsorshipand licensing high, but the hoops one
would have to go through, asI figured, were just not practical for

(03:05):
a local or regional company, nomatter how good the idea was. But
I still got my idea in frontof them, because if it was a
good or different idea, they can'tunsee it. So I got one of
the license reps names, figured outa way they could be emailed through the
league website, and emailed the images. But I had a reason for this

(03:29):
since I knew they were very fewsponsors now. Right away, I knew
I didn't have a chance for leaguelicensing, but I thought I could still
get a shot in. So afterthe email, I called asked the rep,
are you sure all the sponsors areset on their products and promotions for
the World Cup. Since I knewthe league had to approve everything, I

(03:53):
didn't ask him about my product sinceI knew he had seen it because I
emailed me and he took my call. I was looking for more. The
quick answer would have been you knowI was screwed out of luck would have
been the noblink hesitation correct answer,well, yes, Jack, everything's ready
to go. You're welcome to fillup the forms and we'd be happy to

(04:15):
look at your product and blah blahblah blah blah. But that's not the
answer I got. I got apause, not a long one, but
enough to hear his tell, andthat's what I needed. After the pause,
he gave the perfect answer. ButI knew right there not all the
sponsors had decided what they were goingto do for their licensing. I just

(04:39):
had to figure out which one,and believe it or not, I did,
but that took time. And whatdo you do? What do you
think? The first thing that sponsorsaid to me once he saw the new
product, he said, how muchis it going to cost? It is
important to remember that I wasn't tryingto grow this product locally, then regionally,
then national, plus the sales ofinternet, which are pretty time consuming

(05:02):
and the normal way to go.The hand flag may later turn out to
be a standard retail item, butI was betting on the sports craze where
I'd sell thousands at a time,so my manufacturing approach would be a bit
different. You see, after thesecond test of the prototype, I called
a trusted manufacturer in China that specializedin Cutt and sew to get a quote

(05:26):
on making any type of flag orbanner on a pair of gloves that were
either biker or fingered or emitten.I was surprised to learn for once that
with a six thousand unit order orthree thousand pairs, the manufactured price would
be lower than I thought. Soagain, right there, I knew I

(05:47):
could sell to any league or sponsor. I had a pretty good idea what
it'd be able to hit price wise, in the reasonable range of between fifteen
and twenty dollars, with everybody makingfull margins and making a buck or or
so off each product. Since Isent the pictures ahead and followed up by
mailing the samples, the manufacturer saidonly two to three weeks for a factory

(06:10):
line sample, which is extremely fast. Literally three weeks later I had the
sample and it was ninety five percentright off the first try, and just
a small air on the inside tag, which is pretty good and something that
we could take care of over thephone jack. Wait, what happened to

(06:30):
good old USA Manufacturing? Hold on, I'll get there. If I was
going to keep going after the women'snational soccer team for the World Cup,
it became quite clear, not theleague or the sponsors would have anything to
do with the American flag. Ofcourse they didn't say that directly. They

(06:53):
just used words like confrontational, aggressive, controversial. No one wanted to take
the chance with the American flag.I mean, I just thought it was
terrible. Now, and this isten months before the event. I read
what players were coming back, andI knew why the hesitancy. Most of

(07:14):
the players from twenty nineteen were comingback, and no one wanted to rock
the boat. No one. Now, I knew whatever I produced was not
going to be a United States flagwhere production costs are a little bit more
so now I had to set mysights directly on overseas manufacturing because it would
cost less. Jack, I don'thave a manufacturer to call up, so

(07:39):
why'm not well? Not really?Remember I was short of time, so
this is going to need all myears of experience and connections to pull this
off. But from the new inventor, this could still be done. You
just have to decide at that pointwhat you really want to do, and
that will take you a little bitlonger since you just learning the ropes.

(08:03):
If you don't have my connections,you would have done the next best thing,
you would have improvised and been flexible. And there's that word again,
flexible. But it's so true.After last episodes Test one and two,
you the new Inventor and I arestill in the exact same boat. It's
just at that time, based onage and experience, I called on the

(08:24):
big guns, guns the New Inventordoesn't have. But there always are ways
to still work it out. IfI had just been starting out after Test
two where I thought I had something, first, remind yourself you just had
two limited tests, so you haveto figure out right there, what do

(08:45):
you really want to do? Forme? At my age, I would
try for a national or international exposure, but maybe for your first time,
you just don't know what you want. Maybe you're happy that you just invented
the hand flag and that was enoughand you didn't want to put that much
money in it. You just wantto sell it at local fairs and then

(09:07):
around the city that you live in, And that's great if that's all you
want to do, But if youwanted to go bigger, you have to
make up your mind now and thendo the best to stare step each move
so that if problems do come up, or your product fails along the way,
you have not gone so far andthat you can't recover unfortunately, And

(09:31):
I hope you can tell that frommy voice. I've bitten off more than
I can chew before, and itdoesn't taste great. As you get better
at this, I think you getbetter at the steps and you evaluate your
chances at each step. I've spokento you about this before last season.
When you're developing a product, you'reeither an inventor or you're not. And

(09:54):
if you decide that you are aninventor. No inventor just does one item,
so you don't have to bet everythingon the first idea. Chances are
you'll have more ideas or later thisproduct morphs into something else and you give
it another go. You just don'tknow. So let's say the new inventor

(10:16):
decides to take it next step upand wants to sell regionally after the limited
success of the second test, Iwould work my tail off to come up
with the money for the larger orderthat I could sell regionally. Jack,
you dummy, You forgot about theInternet. No, I didn't forget about

(10:39):
the internet, social media or havinga website. But that comes a little
later, and there's a reason forthat in my perspective, I mean,
I get it. Why not startout with a small website and grow it
from there. It's easier, right, I'd have to say maybe not really,

(11:00):
Here are the negatives to putting itimmediately on the Internet or in social
media without a base of support.You may get great exposure, but you
may have a hard time keeping upwith the demand initially. And since there
are more people there on the Internetthat can see it worldwide, there's a
high chance people will steal it,whether you have protection or not. Hello

(11:24):
Etsy, if at all possible.You want slow, steady, controlled growth
as best you can. That iswhy you want to develop a firm,
solid base as best you can beforeletting the entire world. Yeah, I
said it before. It is theInternet. The entire world know what you're
doing, and if it's eye catching, you will not believe how fast that

(11:48):
spreads. It has taking me yearsto develop relationships where I could take an
order for just fifteen hundred units,but then the next month maybe one hundred
thousand, then the next month afterthat maybe five thousand, then the next
month two hundred and fifty thousand,and then incredibly after that like nothing like
maybe two thousand units by that upand down. That wears out the manufacture

(12:13):
and you now there are smart assesout there and say, hey, I'd
like to have that problem. Butbelieve me, I want success as much
as the next guy. But thatback and forth can really wreck your business.
If you have everything in line,all the sourcing, all the production,
the delivery, the sales, theaccounting, the manpower, it just

(12:35):
makes it easier for slow, steadilygrowth, especially in production. Okay,
so back to you, the newinventor. Let's say, now you've had
two small tests on your product andit looks promising. How do you make
it successful? Well, if itwere the hand flag and I was new,
I would take the longer route becausemoney is tight. It's always tight.

(12:58):
If I knew it was the middleof summer, I will look for
events that were all being celebrated atthe same time, such as a Labor
day, city fairs, plenty ofparades and events happen so often around the
same time, So I would startvisiting small towns in the region and take
orders. I would put them onconsignment to get the deal done. Yes,

(13:20):
that means you bear the cost ofthe first ones ordered. Most people
would say screw that, wait untilyou get fifteen hundred orders paid for before
you even do one thing. Imean, you can do that, but
you would have to meet a lotmore people, and you'd have to play
smaller orders, and because those peopleare really just less likely to take a

(13:41):
chance than when it's on consignment.Plus, this will double the time investment
to get it done, since you'dbe searching longer. In this day of
inflation, few people place an orderon an untested product, but approve of
one starts the ball rolling. Italso helps if you could string some small

(14:01):
towns together so that you know,maybe they're tourist towns, and they're all
in line with each other, sothat you don't have to drive so far
between different areas. So this isthe part about working your tail off for
the manufacturing money. At this point, I would order fifteen hundred pairs three

(14:22):
thousand units from a regional manufacturer.I think that that order would be big
enough. It's reasonable to think thatthe price of the prototype cost at seven
bucks would probably come down hopefully toa five or six dollars range. Then
start with five hundred pairs divided bytwenty four units per store in like twelve

(14:43):
stores. Let's hopefully you've experid itenough to about twelve stores in a region,
and then you leave about two hundredin reserve specifically for those stores to
refill. Okay, so now you'veworked hard to get twelve locations stores to
sell your product over given area.With this first try, you've done all

(15:05):
this hard work and barely made anymoney. But and it's a big butt.
Your product is selling and it's outthere, or at least you hope
it's selling. And at this pointyou are no longer behind or losing money
with each sale. What gives?Why would you do all this work and
barely make any money? Well,because this is another step the first orders

(15:31):
that you have now established your baseand you're hoping to have replenishment orders.
This is also the same time,whether you might have a little bit of
initial success, you open the gateson the internet as and I say,
as you continue to increase your regionto multiple regions. It just depends on

(15:54):
how far you want to get andhow big you want to go. Sorry
for all of them, but herecomes some more. Now you're selling it
for fifteen dollars on the internet,like you are at the store stores,
the twelve stores you started out,but you're not paying the retailer since now
you're the retailer, and that you'remaking at least an eight dollars margin roughly

(16:18):
what you know. It'd be alittle bit more you'd make because of the
what you negotiate with the manufacturing,but then you'd have internet website fees,
blah blah. So let's just hopeyou're making seven to eight dollars margin.
Once again, this is another steponce you've added the Internet to your base.
Okay, so now as you've expanded, you're just making a few bucks

(16:42):
on the retail locations, but you'remaking a great margin on the internet.
Jack, you dang gong just sellon the internet. Sheeesh. Okay,
so you say, why all thehard work on the retailers. I love
the margin I'm getting on the Internet, and the retailers take time and it's
hard. I'm just gonna go straightfrom the good margin on the Internet and

(17:06):
I'll worry about the retailers later.You can do that and maybe it works
out for you. But being inretail location develops a falling for more ideas
and products. The retailer, andthe retail base gives you great early feedback
that you won't get from the Internetthat you can trust. There are just

(17:26):
too many haters out there that wantto see you not make it. It's
crazy. I mean, think ofthis. You go visit Mount Rushmore,
the hand flag is there, andyour kid buys it and takes it home,
and all the neighborhoods back in Tulsa, Oklahoma love it. What's the
first thing they're gonna do. They'regoing to go online and see where and

(17:48):
what is available. But chances arethat same twelve year old that may have
boughted a Mount Rushmore would never seenthe hand flag online because he or she
probably wasn't a full time shopper yet, and the product never existed until you
put it up for sale. Theretail stores, now this is from me

(18:10):
to the new inventor, are justvaluable in more than the sales of your
item. Usually they love new itemsand that personal touch, but they also
if you've gone there and met them, we'll support your product personally, not
like the indifferent, uncarrying internet withphony, fake AI driven reviews. Jack,

(18:33):
you almost made me cry there.If it works out well, you
can get another order that has expandedup to like three thousand pairs or six
thousand units. Usually that's a safenumber, and at that point it'd probably
be safe to take a chance overseas, which by then you've probably had people
already contact you because they've seen themout there in the market. At least

(18:56):
that's what happens to me. Itdoesn't take long for one my products to
be out and immediately called by aton of manufacturers, both foreign and domestic.
By then, you're the inventor.You know exactly what you need and
what they need. And if you'vegone in a short circuit fashion like straight
to the internet, it would havebeen a lot of on the job training

(19:18):
right there, and you may notbe able to recover because you didn't take
the steps. This will not happenovernight, but a lot can change once
you put it on the internet anddo some social media along with selling it
on the internet and trying to getmaybe some press. All that changes sales,
and I hope it does it forthe better for this first time period.

(19:42):
If you can just break even,you're ahead of the game. I
think for doing things like this insmall batches, you'll make just a few
bucks per sale. Maybe you'll breakeven. Then you make a few bucks,
but most people might try to stopyou there. They might say,
if you'll not make it half,you'll never make it, So this is

(20:02):
a bad way to go, andoften they would be right. But most
of the people that say that aremaking the assumption on something that's already out
there and already selling, not somethingnew, whimsical and untested. This is
why the United States government also expectsyou to lose money in the first few
years you're in business, because you'restill trying to figure out how to make

(20:26):
it work. Jack, I thoughtthis is gonna be easy after this initial
stage as you expand with sales,to start to find your legs out there
and figure out what's going on,and that you continue to listen to the
customer, which always helps. Butwhen you're starting out, you take what
you can get, and you gotto be flexible and make money in the

(20:48):
new areas. You never know wherethey're gonna come from. You kind of
have to try it all because younever know when it's gonna happen and how
it's gonna continue, or when it'sgonna be over. On top of that,
you never know when you are talkingto somebody by being polite that they
might remind you and surprise you laterwith an order that you didn't even see

(21:10):
coming. For me, by thistime, the hand flug now had had
limited testing, and all signs atthat exact moment were very promising. But
you know what, I still didn'tknow if it was going to work.
Was this going to cause a newcraze, or was it just gonna flame
out and be a disaster. Sountil next time, when you're thinking of

(21:32):
ideas, never settle. And whenyou're stuck and I mean really struggling,
just stay the course. Keep inmind when it gets tough, that's when
most people give up and quit.There's always another way. I'm your host,
Jack Courage the thirty year Overnight Sensation. Stay at it.