Entrepreneurs and firms that create and sell digital products may choose to expand into developing physical tech products, whether as ancillaries to their digital line or as a new venture. Whatever the reason, it’s important to remember that different challenges come with creating, marketing and selling digital products and physical products. It’s not safe to assume that the knowledge and practices that have fostered a successful digital technology company will automatically translate to success in the physical product space.
From accounting for new and added production costs to revamping marketing strategies, it’s essential for digital product veterans to carefully consider and be ready for the challenges that come with producing physical products. Below, members of Forbes Technology Council share helpful tips to help tech leaders and entrepreneurs successfully navigate the transition to the physical tech product space.
1. Account For Additional Costs
One thing you need to consider when getting into the physical product space is additional costs. It’s going to cost you money to order more goods. You’ll need to pay for shipping, which can add up quickly, depending on the size of your business. You’ll also have to consider such factors when establishing your pricing plan and discount rates. – Thomas Griffin, OptinMonster
2. Sort Out Supply Chain Logistics
When selling a physical product instead of a digital product, one of the most important considerations to take into account is supply chain management paired with managing physical inventory. Being able to accurately assess one’s required physical inventory and match that to the ebbs and flows of supply chain challenges is critical to successfully managing physical product sales. – Marc Fischer, Dogtown Media LLC
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3. Make Needed Changes To Development Processes And Vendor Management
It’s essential to understand that physical products carry very different risks, and you will need to do very different things to meet customer expectations. In many cases, development processes will need to change to be more disciplined than those I see followed in many digital organizations. And vendor management will be key: Aligning your processes to vendors’ processes is a level of complexity you don’t normally have in digital products. – Laureen Knudsen, Broadcom
4. Remember The Immutability Of Shipped Products
In my career path, I have actually gone the other way. I am formally trained in electronics engineering, but I have specialized in imagery data as a product throughout my career. In electronics, a common adage is “hardware is hard”—this mostly refers to the fact that physical products are immutable once shipped. The software engineer’s flexibility of continuous delivery goes out of the window. – Tishampati Dhar, Aerometrex LTD.
5. Invest In Physical Demonstrations
Invest in demonstration equipment so that potential customers can “touch and feel” the difference your product makes compared to the competition. Mobile display trailers tricked out with all the products are a great way to schedule face time with decision makers and technicians who use similar products every day of the week. – Cheri Beranek, Clearfield
6. Look For Simple Ways To Market Your Product
Wear or use your own product, and let friends, family members and colleagues do the same. More often than not, your immediate network will become promoters, and their network will get curious about the new physical device they are wearing or using. Soon they will want to see it and try it and may ultimately buy it. If devices are limited, do a rotation among your friends and family, and ask for their feedback and honest reviews on social media. – Spiros Liolis, Micro Focus
7. Don’t Overlook Subscription Potential
Many organizations that create physical products are looking to bundle services around their products and transition to subscription-based business models. Tech leaders should look to leverage their expertise in digital product sales, particularly in recurring revenue models. In some instances, it may be pertinent to propose the question, “Why aren’t we trying to make this into a subscription?” – David Glazer, Kroll
8. Carefully Consider Your Online Message
There has been a paradigm shift in how we reach our buyers. Whether your product is digital or physical, customers will primarily find you online and expect you to build a meaningful relationship with them there. You must validate the value proposition for the problem your product solves for your buyer and accurately message the solution for that problem. – Mikael Berner, Edison
9. Explore Affiliate Marketing
The easiest option to market and sell physical products is through affiliate marketing. If done correctly, it can also be the best method. There are thousands of companies providing affiliate options: For example, you can open an Amazon account and market and sell your products to your customers there. Apart from that, you can also use dropshipping. All you need is to set up an e-commerce store and drive traffic to it. – Roman Taranov, Ruby Labs
10. Leverage Tech To Enhance A Traditional Product
Tech leaders can take inspiration from how companies selling traditional products, such as Peloton and Lego, have leveraged technology. Both took conventional products that have been around for decades and significantly enhanced the value—and, as a result, their revenue streams—by using tech. By playing to their strengths, tech leaders have a unique advantage in blending tech with established products and disrupting markets. – Vasudeva Akula, VOZIQ