I hugely underestimated my friends. All these years, they pretended to be mundane office workers and business owners, but that was before the pandemic. Now done with day jobs, they turn into candlemakers, woodworkers, and jewelry designers. After several months of joyful labor and thousands of dollars spent, they’ve decided to turn expensive hobbies into sources of income. For them and all others who are pondering a new business, here are four low-risk affordable ways to check the viability of our product:
Farmers Markets and fairs are like packets of instant 3-in-1 Nescafe. They steer a swarm of consumers hungry for everything handmade and organic in our direction. They allow us to conduct crucial marketing research, under the guise of friendly small talk. Here at farmers markets we make new friends in our community, get business advice from colleagues, and hopefully, start growing our fan base (Don’t forget to put up a sign with your Instagram handle in a very visible place.)
Investment:
7-12% of sales depending on the particular Market and type of selling goods;
a tent and a table.
Pluses:
opportunity to get immediate feedback and suggestions from buyers;
integration into the local community.
Minuses:
geographically limited outreach,
no post-sale contact with buyers unless they follow us on Social Media or subscribe to our newsletter.
2. If our product is well made and looks sellable, local gift shops will be happy to put it on their display. Introverts will love it - we only have to sell the product once - to the manager of the store. The rest will be done by a professional behind the counter. Unfortunately, there is little control of how our product is displayed, no communication with buyers, and no chance to give a hesitant customer a sales pitch. We have to give away our precious creations and get the money only when and most importantly if they are sold. Is it all worth it? It’s worth a shot but make sure it is not your only sales channel.
Investment: usually, no extra costs are involved.
Pluses:
Delegation of the pesky sales process;
Exposure to potential buyers.
Minuses:
No control over the sales process;
Giving away inventory without immediate financial return;
No post-sale connection with buyers unless they find us online.
3. Facebook Marketplace is easy to use, it works nationwide, and it is affordable. Moreover, if you offer shipment, Facebook will automatically create a shipping label for you. Bonus if you like to talk about your creations, because, oh boy, Facebookers like to talk. Here on Facebook we can start our company page, turn our customers into fans, and with a small marketing budget see if Facebook ads are for us. Marketplace is a relatively new platform but because it is a part of the biggest social network in the world, it has huge potential and shouldn't be ignored.
Investment: free for local sales, 5% of the item cost if the transaction goes through Facebook.
Pluses:
Low to no fees;
nationwide exposure;
easy checkout within the social platform;
autogenerated shipping labels;
access to buyers’ and sellers’ Facebook profiles.
most potential buyers are using Facebook already.
Minuses:
Communication can be time-consuming;
no in-app transactions for sales with a local pickup;
takes up to 3 weeks to transfer money into a bank account
with a focus on used items, Marketplace is perceived by many as a more convenient version of Craigslist, and some people might be reluctant to buy new goods on the platform.
4. Etsy - a world-famous Pandora’s box of handmade and vintage goods. It might take awhile to figure out how to make your product discoverable and get the first sale, but since it is available worldwide it is worth a try. Just like Facebook, Etsy creates shipping labels. All we have to do is print them and snap them on the box. Unlike Facebook, it is not free. The charge is $0.20 for every listing and 5% for every transaction, which is a fair price for a marketplace with almost fifty million active buyers. Esty started in 2005 and has since proved deserving of our trust and admiration. Among the latest admirers is the richest man in the world Elon Musk. He publicly tweeted about his love for Etsy upon his purchase of a hand-knit helmet for his dog.
Investment: $0.20 per published listing and 5% of the item cost for every completed transaction.
Pluses:
Available worldwide;
respected and trusted;
autogenerated shipping labels;
coupon and sales offer and other built-in marketing tools,
very reasonable commission rate compared to marketplaces like Amazon.
Minuses:
High competition within the platform.
Have a budget for high volume production and a marketing campaign?
Wonderful!
Instead of potentially wasting it on a product that no one needs, we can use these low-risk channels as focus groups. We can figure out what taste, smell, or color is more popular, what type of packaging appeals to people, and what raises concerns. We can learn about the shortcomings of our product and fix them. Once we’ve validated our product potential, it is much safer to move forward with substantial production and marketing expenses. This validation won’t guarantee success, but it lowers the risk. Big retail has its own challenges, but we are entrepreneurs and we love challenges, right?