Episode 62 – Product Differentiation Strategies to Take Your Ideas from Concept to the eCommerce Market
Let’s say that you are a new seller on Amazon, and you have some past design experience. Or, maybe you’ve been on Amazon for a while and you are starting to tire of other sellers ripping off your products as soon as they start to make real money.
There is a point where those two stories intersect, and it has everything to do with today’s guest.
On this episode of the Serious Sellers Podcast, Helium 10’s Director of Training and Customer Success, Bradley Sutton speaks with Zack Leonard from Gembah, a company that specializes in product differentiation strategies and taking eCommerce concepts to market.
To begin with, why is it important to create a new product? Or, for that matter, why is it necessary to even tinker with a product’s design?
There are so many successful products out there, already selling thousands of units every single week. Couldn’t you simply use one of those and make it your own through a simple change of packaging?
To be honest, a lot of Amazon sellers do just that. But, in an increasingly competitive selling landscape, you might need to do more than differentiating your product by simply slapping a new label on it.
As time goes by, product innovation will become the difference between having a little success on Amazon and being able to scale your business to the point where it is a self-sustaining eCommerce career.
According to Zack, “The Amazon landscape has shifted.”
Now, with the internet reaching into almost every corner of the planet, we are living in an increasingly sophisticated eCommerce world filled with buyers who want products that aren’t just serviceable. They want cool. They want new. And they have come to understand the difference.
How are you going to satisfy their constant desire for the latest and greatest?
Innovation is how.
Zack says that what Gembah is trying to do is “democratize the creative process” and make a “quick-serve” model out of taking your product from concept to the market.
Sounds great to you? I bet you’re wondering about the expense.
While this might not have been the case even a few years ago, the 21st century’s exponential technological growth has resulted in a near-constant trickle-down of computer-aided design, 3D modeling, and printing.
Now, these advancements combine with small-batch manufacturing to allow almost anyone to be able to afford to innovate.
But, it’s still very important to have a strong relationship with the factory. Zack says that while “our designs will take you 90% of the way there, the factory will still have to do the last 10%”
That’s because the factory knows what they can actually do.
So, Amazon sellers, you know you’ve got some great ideas, and maybe what you’ve been doing has been working just fine.
However, there’s a lot of very creative people out there and Amazon is not standing still. Listen in to the podcast and find out how to level-up your product development skills.
Those untapped Amazon product ideas might be waiting for you, just under the surface.
In episode 62 of the Serious Sellers Podcast Bradley and Zack discuss:
- 00:38 – Bradley – “What’s Up with the Name Gembah?”
- 03:00 – Why it’s Important to Innovate
- 04:08 – The Amazon Landscape Has Shifted
- 04:40 – Democratizing the Creative Process
- 05:30 – What About Fears of the Expense?
- 06:50 – Using Helium 10 Tools to Find the Starting Point
- 07:50 – CAD Design and 3D Rendering – What’s the Expense Really?
- 09:12 – Gembah and Zack’s Shared Philosophy
- 10:12 – What are the Technological Prerequisites?
- 13:37 – Bradley Runs Through the Steps
- 15:40 – How to Find a Capable Factory
- 18:18 – OK, Sounds Great, How About the Costs?
- 19:06 – An Incremental Innovation Success Story
- 21:34 – The Difference Between this and Traditional Private Label Product Development
- 23:26 – Last Words of Wisdom
- 25:16 – How to Reach Out to Zack
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Bradley Sutton: Have you ever had a cool idea for your own product or maybe you haven’t, because you don’t think you’re that creative? Either way, today, we’re going to learn the process of how anyone can create their own physical products from scratch. How cool is that? Pretty cool, I think.
Bradley Sutton: Hello, everybody and welcome to the Serious Sellers Podcast by Helium 10. I am your host, Bradley Sutton, and this is the show that is a completely unscripted and unrehearsed organic conversation about serious strategies for serious sellers of any level in the eCommerce world. Welcome to another episode, and today, we’ve got Zach from Gembah here. Now, first of all, I actually haven’t done this in 50 episodes, but I have to ask as the first thing, what the heck does Gembah come from? Because that’s kind of an interesting company name there. So that’s the first thing I want to ask you, Zach. First of all, how’s it going Zack?
Zack Leonard: Good, good. Well, thanks for having me on, Bradley. Really excited to be on the show. Yeah, so we get that a lot. As far as what is the genesis of the name, so in Kaizen manufacturing, there’s a theory Gemba. That’s the place where value is created on the manufacturing floor. So, we loosely based it off of that. And in Chinese ganbei means “let’s do this.” It’s kind of a dual meaning there. That’s how the name came to be.
Bradley Sutton: Ah, okay. That makes sense. All right. So, yeah, because I remember your first when I might’ve seen your email address. I think, just mentally, I was thinking of that as a suffix or something, like in Germany, of companies. Isn’t it like Gemba or GMBH or something like that? For some reason, that was what was going through my mind. But then, I actually just saw your website for the very first-time-right this second. And I’m like, “No, this is the name of their company. What’s going on here?” In Japanese, ganbatte or similar to that means “good luck” or “go get it.” It sounds similar to the Chinese.
Zack Leonard: Okay. Yeah, yeah. exactly. ganbatte means “let’s do this” and then “ganbei” means cheers. So, it’s again kind of loosely based off of all those things. We like to have fun at Gembah. So, the serious side of it is that Japanese interpretation of it and the fun side is the Chinese interpretation.
Bradley Sutton: Nice. Nice. All right, well we’re going to have to invite you to Southern California and let’s Gembah the night away at some bars or clubs or something right here. But anyway, let’s get to the serious side of the Serious Sellers Podcast here. This is not the “Let’s Have Fun and Drink” podcast, but let’s talk a little bit about something that we’ve never talked on this podcast about. It’s more on the development side of making products on Amazon. We’ve had great sourcing episodes on here; we’ve had product research, but I think the reason why I wanted to have you on here was a big factor I think that Amazon sellers are missing—differentiating their product and really taking a step beyond just taking an existing product and slapping your label or your brand on it. I think you have some great insight into that. But first of all, talk a little bit about why you think that’s even important nowadays as opposed to maybe five years ago where you could become a million-dollar seller just by taking existing stuff and slapping your logo on it. You definitely think the landscape has changed, right?
Zack Leonard: Absolutely. We went to SellerCon; we went to IRC; we’ve been at a few of these tradeshows, and I think the messaging is pretty clear that the buy-and-sell or white-labeling days are coming to an end. And the reason for that is it’s just getting way too competitive. And part of the landscape is that a lot of people now have seen the success stories from the past five to 10 years of Amazon sellers, and their formula has always been to white label or slap-a-label on an existing product. It’s becoming a lot easier to do that through places like Alibaba. Now, the landscape is kind of shifting to more of this create-and-sell economy where you need to actually create a brand, you need to create a category of products.
Zack Leonard: You need to differentiate from what’s out there because people want the coolest, latest invention. People want the coolest, latest trends. And what Alibaba did a great job of is giving the ability to go and find an existing product and bring it to the masses really quickly. But as far as creating new products, that’s something that they don’t really do that well. So, there’s not really an outlet for someone to have that creative and innovative side of their brand or their product category. And so, what we’re trying to do at Gembah is really bring that to the limelight and to the forefront and really democratize that process so that people, not only Amazon sellers, but anyone can have an idea and bring it to mass production in a very efficient process. And a very rapid, quick-serve model.
Bradley Sutton: Okay. Yeah, I completely agree. Now, initially, I think some people might say right off the top, like, “I can’t afford to make a brand-new product from scratch,” which I don’t think we’re really talking about necessarily or “I can’t afford to really completely change something.” You know, factories are going to ask for like a 20,000-quantity minimum to make a new mold or something. But can you talk, and we can’t go too much into detail, in 30 minutes, about people who have those initial kinds of fears, I guess, about differentiation and not doing this traditional stick-your-logo on our product. How can you alleviate some of these fears?
Zack Leonard: Yes. At least the philosophy that we take at Gembah is that if we’re doing a quick-serve model that’s really focused on the Amazon space, the goal is to be able to incrementally innovate on a product. Let’s take an example of a company that does this really well based in Austin. It’s Yeti Coolers or Yeti. They took a wine glass, the original model that was made out of glass, which is pretty cheap to make, and made it out of metal and added some insulation and was able to charge four to five times the price of the normal wine glass that’s out there. And they are hundreds of millions of dollars in revenue per year company. They really kind of pioneered this way of thinking of incrementally innovating on a product without having to spend tons of money upfront on molds or tooling or all that stuff.
Zack Leonard: And so, the way that we take this philosophy is to try to expand upon what they kind of pioneered here and make that come to the masses. And so, we take a look at products that are on Amazon. There are tools out there that help you research what is hot. I’m talking to one of the people that work at one of those companies called Helium 10, but those tools give you the ability to do a lot of research and you can look into the reviews on those products to see, “Okay, what are people saying about the product?” The research is kind of all there. Then you can come to a designer like us and take something that exists. You’re kind of reverse engineer it through modeling through 3-D renderings through 3-D printing and come up with a new product that might have an enhanced feature, like, a blow torch that is made out of metal instead of plastic or a piece of a phone case that has some sort of lanyard holder or some sort of wallet adjustment to it.
Zack Leonard: There are very different things that you can do to different products that are not really expensive in terms of how they’re going to increase the material costs as well as, from a design perspective, we make the process really straightforward. So, getting a sketch and getting 3-D renderings, and getting CAD drawings is actually not that expensive. And that way, you can have the blueprints for the factory to really translate what they’re trying to make into a much more straightforward and affordable process for the average Amazon seller.
Bradley Sutton: Okay. That makes a lot of sense. Now, when you say, “Hey, CAD designs and different designs might not be that expensive.” What are we talking about? I remember like years ago, I was looking into getting some new kinds of, what was it, like headphones and then they were like, “Oh, you know, for us to do the CAD design,” it’s like, I don’t remember, it was something ridiculous, like, how many thousand dollars, and then, to make a mold it was going to be either a $15,000 minimum or something.
Bradley Sutton: But I know technology has come a little way where we’re not talking about that kind of investment just to be able to get a design made, right?
Zack Leonard: Right, from a design perspective, again, there are a lot of things you can do to get you to a working prototype without having to really spend a lot of money on the molds, and that’s small-batch manufacturing here in the United States. You can work with a local provider to do 3-D modeling and 3-D printing. Those are really cheap. We’re talking like 10, 15 bucks an hour to use the machine. And then, as far as getting the actual drawings and renderings done, again, that’s what we’re trying to do at Gembah, democratize that process. And so, our philosophy has been that we’re going to find really good talent that we can put in front of you from a design perspective, from an industrial design perspective and engineering perspective.
Zack Leonard: We let our designers take it about 90% of the way there, and then we leave it to the factory to take it the other 10% as far as production goes. And I’ve seen customers that come to us that have spent thousands of dollars, hundreds of thousands of dollars on designs, and then, when we take it to the factory, well the factory are going to have their input on what they can actually do, right? And you can take a really complex electronic toy for example. And let’s say that the factory says, “Okay, this component can’t be made in mass production.” Then you just spent a lot of money on a really nice, maybe beautiful-looking design, but it might not actually be able to be produced. And so, what we’re trying to do is take that bird’s eye view of production and say “Okay, we have expertise in design, we have expertise in manufacturing. Let’s bridge the gap here and come up with a product that’s within your budget as well as feasible for production.”
Bradley Sutton: What about the molding process? Can you explain what factories need? Like a lot of people don’t understand that to make something new, whether it’s going to be plastic or whether it’s going to be wood or steel, there’s something that’s needed first, that’s called like I guess the mold or tooling. Can you talk a little bit about the concept behind that?
Zack Leonard: Yeah. You know the three main product categories that we’re going to talk about in terms of what would take a mold, and that’s plastics, glass, and metals and those are injection-molded items. And so, basically, an injection mold is they take the raw material, which is a molten version of the source material. So, a molten version of plastic, molten version of glass, or metal and they inject it into a mold to create the final product.
Zack Leonard: All of the products you see that are made out of plastic or glass, or metal, you know, any office furniture you see that is metal that has metal legs or, or a plastic cup that you drink out of. Those are all going through an injection molded process. And there are various different types of injection molding. There’s blow molding, there’s just straight injection., There are a lot of different ways to get this done and those are the kinds of products that are going to have a lot of upfront fees. To understand a little bit more about how to manage that or mitigate that from a cost perspective is working with your factory and getting a good factory partner where you can get a reimbursement for those types of upfront costs in the mold fees.
Zack Leonard: Obviously, creating new products, you’re taking a pretty substantial risk potentially on whether this has a product-market fit. You really need to do your research on the front end to make sure that you have a product that you think is going to be a winner. And once you do that, you decide, “Okay, what kind of product is it going to be? Is it going to be plastic, or a cut and sew?” So, apparel, something like that, and the cut and sew products are not really going to have molds assessed with it unless you’re getting special plastic attachments that go on the apparel or the cut and sew items like a plush toy or anything that you see, like a chair that has the top that’s kind of sewn together.
Zack Leonard: Right. Then, injection-molded items, like the plastics and glasses, those are the ones that are going to have the most expensive parts about it. But again, glass items are typically going to have less upfront costs if they’re smaller. So, a few, 500, 1,000 bucks on a small glass item. The plastic ones, because of the size of the molds, those are the ones that are going to be more expensive. So, when you’re looking at those kinds of items, that’s something you want to take into account. The metals, same thing, they’re probably in between the two, between plastic and glass, in terms of cost-perspective goes. When you’re talking about tooling, that’s the next step after the mold is, here’s what it takes for me to actually make the product finalized.
Zack Leonard: They have fixtures, they have jigs, they have gauges, they have dies, they have cutting equipment, different patterns that they place on different items. So, if you think about some sort of leg on a chair that has a weird zigzag to it, it might be molded first into a straight form, and then they use the machine to cut out the zigzags that go into the bottom of the chair of the legs. That’s the difference between injection molding and tooling, and tooling is just going to be another cost for the machine that they have to make that would put that final touch on hose finished goods.
Bradley Sutton: Okay. So then, correct me if I’m wrong, but how does the process play out? Somebody is doing product research, and they investigate on Amazon, they look at it on Alibaba, but they’re like, “You know what, I have an idea about how I could make this a little bit different. I’m going to add a handle here. I’m going to add some kind of function here.” Maybe they would first make a sketch of what they had in mind, but then, they would give that to somebody who could make either a blueprint or 3-D design and then there would be 3D printing. Is that part of the process too? Is that what factories nowadays use in order to make that mold? Or did I miss any steps here?
Zack Leonard: Well, you can get a mold made from the basic standpoint of a 2D CAD drawing model that shows all the dimensional information and shows all the size and shape of the finished product.
Zack Leonard: If you want to go the next step, you can do a CNC rendering of your product or you can do a 3-D printing rendering of your product, and those are going to give you a real live look at what the finished product will look like. And so, once you give it to the factory, it’s just going to increase the precision and accuracy. And also, it will save you a lot of costs upfront, because if you don’t like how it’s going to come out from the CNC or 3-D printing version, you’re not going to like how it looks in the mold. So, it’s a way for you to really spend a lot less money up front and get your product perfect. And then, send it to the factory and say, “This is exactly what I’m looking for, and I’ll make it out of this plastic or this metal or this glass or whatever source material you want to do.” And you can add whatever coloring to it. You can add whatever down-the-line stitching or gradients you want to add to the materials that you put into it. But if you’re looking for something that’s molded, I would recommend always getting a 3-D rendering or printing of your item so you can see and feel it and touch it and understand what it’s going to look like when it goes to mass production.
Bradley Sutton: Okay. Interesting. All right. Now a lot of this sounds pretty high level, so I don’t think you could just go to 1688 or Ali express or Alibaba and try and find some factory or you don’t even know if it’s a factor or a trading company and say, “Hey, here’s my 3-D design, can you produce this?” What’s the best way that somebody can find a factory that’s even able to handle this level of design and technology?
Zack Leonard: Yeah, I would recommend getting with an expert or someone who understands the landscape of the country that you’re trying to do the production in because you’re right. I mean, when you’re talking about putting molds into the equation, you’re going to want to find someone who’s done something similar to this. For an Alibaba or the other outlets that you’re talking about may not be the best way to do that. So, that’s something that we can do. I know there are other companies out there or sourcing agents out there that do something like that. And maybe, it’s a good place to start, but at least, until you get comfortable with that process, I would highly recommend using an expert when you’re sourcing factories for that type of production.
Bradley Sutton: Okay. Now, if you are doing this level where you’re having to make a new mold or new tooling. I mean, by definition, you’re now coming out with something unique. Now, I know a lot of people are worried about, “Hey, I want this to stay for me.” But I’m afraid that, “Hey, I just invested all this money into a mold in a factory in China.” What’s to stop them from going out and letting other people take that mold and just slap their own logo on it? What do you suggest? I mean obviously there’s no hundred percent-foolproof way to protect yourself, but are there any steps that sellers should take that can lessen the possibility of something like this happening?
Zack Leonard: Yeah, so the first step is obviously filing patents and provisional patents. Meaning, if you work with a good attorney on that, you can get those filed pretty quickly. Design patents take a little bit longer; three to six months probably to get those filed. And then utility could take years. Right? And if you file the provisional, file the design, you’ll have protection in the country that you’re trying to sell it. Whether you sell in the United States or Europe or wherever you want to, wherever your operation is, that’s the first step. If you want to go beyond that, you can work with someone like us who has an entity set up in China that can help enforce contracts in China. And that’s the next step in terms of enforcing patentability overseas in the place that you’re doing the production.
Bradley Sutton: Okay. All right. And then, well, what are some of the costs? I’m assuming, when you’re talking about the patents, you’re talking about here locally in the US so to get a patent on a certain design. What kind of costs would somebody be looking into for that?
Zack Leonard: Yeah, that really depends on the level of scrutiny and level of protectability you want. I mean, it can cost thousands; it can cost hundreds. It really just depends on what you’re trying to protect. If it’s something that’s really intense in terms of a big mold and a big design and something that has an actual utility that no one’s used before. I mean, it’s going to cost you thousands of dollars, but if you’re talking about the Amazon world where that’s not really what most people are trying to do, they’re just trying to incrementally innovate. I mean, something like that is not going to cost thousands of dollars to accomplish.
Bradley Sutton: Okay. Is there any example that you could give of maybe something you’ve done or something you’ve heard done where you can really kind of illustrate the process and how it really works? About how you can take an idea and kind of make it a little bit unique and maybe a success story? Do you have anything like that you can give us?
Zack Leonard: Yeah, I do have an example of from our perspective of a customer that came to us to try to incrementally innovate on a product. They came to us with a product that you can hang up in your room. And what they saw in the market was that there’s a trend for the shape of the product, but there was a need to differentiate on the design. So, what we did is we took some of the framing of what was going on in the product and changed it from a metal to wood and changed the design of it and really made a nice-looking product from an aesthetics perspective. And then, once you get to that step, you can go through sketching, get iteration and feedback, use customer testing to make sure that you have the right design, and then you can start going into the full CAD drawings. And once you do that, you’ve kind of laid out the blueprint for the factory to do their job and price this thing out. The next step after that is to take that blueprint, go to the factory, and make sure that they can actually make this.
Zack Leonard: And in this case, we found someone who was making a product that was similar and had experience importing or exporting wood into the United States because that’s obviously a crucial step when you’re creating a product from scratch. Obviously, the compliance aspect of it as well as making sure that you are able to find a good factory. But once we did that, we use the sampling phase to really get it right. And so, once they got the sampling phase right and got their golden sample and their final production sample, they are able to make that product into a nice product that’s being sold on Amazon currently. And so, that’s a cut and dried and easy way to make incremental innovation without having to spend a ton of money upfront, not a lot of money on mold costs and mold fees and tooling fees and still get a really nice product that differentiates from the market. And that’s kind of what the Amazon world is looking at today.
Zack Leonard: Okay. That’s, that’s great information. And I like that example here and I hope everybody was paying attention. If that went over your head guys a little bit, guess what? Pause, rewind, and really listen to that because that’s important and something that can help you differentiate yourself. So, talk a little bit about the difference of like a lot of this somebody might be saying, wait a minute we’re talking about designs and stuff, uh, and having ideas and, and wanting to differentiate. I get that. But why can’t I just hit up a factory and just verbally or in an email, tell them my specifications of what I want. Why do I have to go and, and do 3-D, CAD designs and things like that? What would you say to somebody who, who might say that?
Zack Leonard: That’s a really good question, Bradley. And I want to touch on this because I think it’s really important. The analogy I always bring to the table when I talk about the difference between going and doing it yourself versus a getting a real design, an engineer to make a blueprint is building a house, right? You wouldn’t build a house without an architect and then you wouldn’t have the architect give it to the builder without your input and you wouldn’t have the builder try and make the house without the architect. And so really in the sense of making a product, it’s the same exact way of thinking. If you go directly to the manufacturer, if you go directly to the builder, they’re going to cut corners.
Zack Leonard: They’re going to say yes to everything that they can do. And then you’re going to come up with a defective product because they don’t know exactly the dimensions. They’ll know exactly the size, the shape, the materials. And that’s really what the design and engineering specs give to the factory is that blueprint of how to make your product. And so that the steps that you need to take in order to get a new or incrementally innovative product out on the market is getting that design in order. Make sure that you have the ideas flushed out through a sketch or through a rendering, get it into a real blueprint, which is the CAD, a 2-D CAD drawing that show all the dimensions that show the bill of materials that show how everything is constructed and then get it made into a 3-D printed model so that you can have some sort of tangible way to show the factory exactly what you want.
Bradley Sutton: Ah, okay. All right, that makes sense. Any last words of wisdom here for somebody who is listening to this and it’s just like, “Whoa, Whoa? This sounds crazy. I thought I could just order something from Alibaba.” Guys, that still works too. But maybe some last words of wisdom to somebody who might be a little bit intimidated about what we’ve talked about. Maybe kind of motivate them to take the leap.
Zack Leonard: Yeah, yeah. I think, there are companies out there that did this in other categories. H & M and did this for fashion. They made fashion accessible to the masses, right? Same with Yeti in terms of bringing an incrementally innovative product into the market without having to spend a ton of money on differentiation. And so I think that there’s a lot of creative people out there, there’s a lot of good data out there that shows you the blueprint of what is going to sell next and why and how to ride a trend. And really just the next step is really just to take that leap of faith and believe in what you think and bring your ideas to reality. Because there’s a lot of good ideas out there.
Zack Leonard: There’s a lot of ways to get your ideas to the masses via Instagram or Facebook or Amazon or Walmart or different ways to really expose your brand, expose your products out in the market. And so, try it out once. Again, if you come up with something that’s completely unique, you’re the one who reaps the benefits. You’re the one who makes the money off of that. And so what I would say is, really take the time, do a little bit more research than you have in the past and try and come up with some crazy or really cool or really exciting new products that, you know, people like me can buy. Because I love that stuff.
Bradley Sutton: Cool. All right, well I thank you a very much Zack for your time now. I’m sure there are other questions that people might have about this because this is a pretty in-depth and new concept for a lot of people. If they want to reach out to you to, to get some more information, how can they, how can they locate you?
Zack Leonard: Yeah, so there are two ways you can go to www.gembah.com— g e m b a h dot com—and you can fill out the form to get at least a high-level understanding of what we do. You can also email email@example.com and we’ll be in touch with you to walk you through the steps and the process of how to really create and manufacturer a really innovative, a really new idea from scratch.
Bradley Sutton: All right, sounds good. Zack, thank you very much for your time today, and we’ll look forward to talking to you in the future.
Bradley Sutton: Quick note, guys, don’t forget that regardless where you are listening to this podcast, whether it’s on your iPhone or on Stitcher, on Spotify, that you hit the subscribe button so you can be notified every time we drop a new episode.
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