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How to Use a Product Development Plan to Build a Valuable Business

By November 30, 2020 February 2nd, 2021 Blog
November 30, 2020

team planning on boardFocus on a Product Development Plan, Not a Reselling Plan

If you are a reseller of existing products on Amazon or Shopify and have never considered creating your own product, you likely don’t think much about a product development plan. Your primary focus is probably on finding products that have little competition and decent opportunities for a growth in market share. 

The problem with reselling products is that there is almost always significant and gradually intensifying competition. If a product is doing fairly well being sold by a handful of resellers, it will attract more resellers who want to dip their toes into the water too. Margins are already thin, and the only way to win market share is to continue to lower your price, making it difficult to turn any kind of meaningful profit. It’s a race to the bottom with few real winners.

Amazon is notorious for targeting products that they find ripe to sell with their own private label. No one can compete with Amazon there. It’s their platform and they have sophisticated technology that identifies these opportunities and gives them plenty of other advantages. For instance, they will inevitably put themselves in the top rank for that product, as well as list the product at the lowest price, even if it means they lose money on the sale. It’s a losing battle every time.

For these and other reasons, it makes much more sense to create a product of your own – one that you own, control and sell by your brand on whichever e-Commerce platforms you want. Developing a product from scratch may seem overwhelming, but it is by far a better long-term strategy than playing whack-a-mole with reselling products. Focusing your efforts on a product development plan will reap greater rewards in terms of profits and brand value.

What Is a Product Development Plan?

A product development plan lays out what it will take to bring a product idea or a series of products to market. It maps the journey from ideation to delivery. While every additional product you decide to develop will be different, your product development plan will follow the same principles and flow, making it easier and faster to plan each time.

Related: Product Design and Development: What You Need to Know

You can look at your product development plan as a pyramid, with your product vision as the foundation for your product development plan, serving as the objective for the product. Your product mission then outlines the purpose of the product, the target customer and the need your product fills. The next level are your goals, including measurable targets you want to achieve. The higher up you go in the pyramid, the more specific and detailed the plan.

From there, you are ready to begin with your research. Gartner, a leading research and advisory company, says, “Successful product planning requires target customer identification, addressable market sizing, actionable competitive intelligence and customer-centric roadmaps.” 

Research is a vital step and one that is often best left to experts who have the technology and experience to research the right things that will provide clarity and help you discern whether your idea and approach are valid. You may make adjustments to your original idea based on the data, or you may discover a new opportunity to explore.

The remainder of your product development plan will include a product roadmap with timelines and milestones, a list of required human and budgetary resources (internal or external), specific activities and tasks, required at every stage, defined roles and responsibilities, and key performance metrics to gauge the progress and success of your execution.

As with the research stage, you can work with an experienced product development company that will help you create your product development plan, as well as bring you the required resources, such as designers and engineers, to refine your design to make it feasible. They will also be able to source factories for you, which is a significant benefit given the complexities around overseas manufacturing. 

Related: Considerations for Contract Manufacturing in China

Inc.com reported that there are more than 30,000 new consumer products introduced each year, and a staggering 95 percent of them fail. Even if you have a great idea, there are countless ways to mess it up if you don’t know what you’re doing and don’t have the proper resources. If this is your first attempt to create your own product, partnering with a company that will walk you through every stage and use their best practices and resources is well worth the investment. 

Creating Your Own Product Line Brings Long-Term Benefits

When you create your own products, you create value. Instead of just reselling other brand’s products with little margin, you build products that bring you a higher rate of return and a brand that has a greater potential to increase in value over time. As your brand becomes more valuable, you may attract buyers who offer to acquire your brand at a premium. 

You also own your product and as the sole manufacturer, you have flexibility in where you sell your product without worrying much about the competition. You can continually improve your product and create new products to retain customer loyalty and generate brand awareness.

Of course, not all ideas result in a killer product, but with the right guidance and resources, and with a solid product development plan, you can create products that fill a consumer need. You retain control as you build measurable, sustainable value. 

Examples of Entrepreneurs Who Found a Niche and Developed Their Own Products

Many of the products we use every day are the result of determined entrepreneurs who saw a need and filled it by developing products from scratch. Some products were improvements over existing products, while others were innovative and created an entirely new product.

One example is the founder of Spanx, Sara Blakely. She was a door-to-door salesman for a fax machine company who recognized the need for more supportive and figure-flattering women’s undergarments. She experimented with pantyhose, transforming the archaic staple product into something of much greater value to modern women. The result of her persistence is a beloved brand with dozens of products and a value of over $1B. At 49 years old, Blakely is worth more than $610M.

Related: Case Study: Profound Commerce

Bobby Edwards was the owner of a concrete company before he discovered a market need. At the recommendation of her doctor, his mother experienced significant improvement with her constipation issues after raising her knees with a footstool placed in front of her toilet. Edwards tried it himself and realized anyone could benefit. He built several versions of a footstool and landed on an ideal design, winning him a Shark Tank investor. Today, the Squatty Potty is one of the best selling products from the TV show and the brand has an estimated value of more than $175M.

Scrub Daddy is the invention of Aaron Krause, a manufacturing executive who was determined to find a better way to clean his dirty hands. He used his knowledge of urethane foam to prototype a scrubbing pad that worked well but needed tweaking. After some trial and error, he created the Scrub Daddy and has since launched multiple sister products. His brand is now worth upwards of $170M, selling more than 25 million sponges so far.

These examples and many more had several things in common: an eye for a market need, tenacity, and a product development plan that helped them realize their vision. How you go about bringing your idea to life is up to you, but by leveraging the knowledge, skills and resources of a proven product development company, you can reduce your risk, speed delivery, and boost profits as you build a valuable brand.