All Systems Go

Here's how to get sales of your new product off the ground, using the Internet as your launching pad.

There are two ways to successfully sell your invention on the Internet. One is to launch your own site, link it with other sites, learn how to work the search engines and offer free information to lure visitors to your site. The downside: Setting up and developing your own site is expensive because you need to work virtually full time to pull in traffic. It's even more expensive if you have to hire someone to do the programming.

The other Internet strategy is to sell your products to online merchants who have active sites that already draw plenty of visitors. In many ways, this is the ideal setup for inventors. Unlike most retailers, Internet merchants can buy a few units of the product, put them on the site and then see how they sell. If they don't sell, the merchants haven't lost much. If they do sell, you could win big.

What types of products are well-suited for selling online? The ideal product is one that isn't widely sold but has a core of dedicated consumers. For example, most people don't buy replicas of Air Force bomber jackets, but a small group of people do. When those people search for "bomber jackets" online, the few sites that sell them come up as a match.

Widely available products don't work as well online. If products similar to yours are widely available, people may not find your products among the many others in an Internet search. They may be able to easily find competing products in a store, and you might have to compete with discount merchants.

Products related to areas where there is a large amount of Internet activity also sell well online. For example, singles and people who are getting married have many sites that cater to them, with which inventors can form links.

Finally, the ideal Internet product is relatively easy to produce. Sales may be modest, and you'll probably need

To cover the costs of setup, production and patenting on your own.

Your goals for selling on the Internet should also be modest. Here are some reasonable goals to aim for:

  • Initiating sales of your product: So that you can eventually introduce it to broader markets.
  • Establishing a base for sales to a certain market: For example, you might launch a Web site to sell one horse-grooming product, with the goal to eventually make the site a central spot for an extensive line of horse-grooming products.
  • Creating a sales channel to produce modest sales in addition to your main sales channel: Internet sales can provide an extra $30,000 to $40,000 per year.
  • Generating testing data from customers: The Web can be a good way to get feedback and testimonials.

Be aware that most inventors who sell solely online never move into major distribution, so if you want the option of sizable retail sales in the future, you should also sell your product to catalogs and local retailers.

Money Matters
What kind of costs can you expect when selling online? Whether you're launching your own site or selling through existing online retailers, you will probably have to pay for the initial production of your product yourself. Since Internet sales are typically modest and not a predictor of eventual success, manufacturers will be reluctant to give you extended terms. (One exception: If you sell to catalogs, landing a catalog order should generally be enough to persuade a manufacturer to offer you favorable terms.)

If you sell to Internet retailers, you won't have to worry about the cost of Web site design and maintenance. But if you set up your own site, plan on setup costs of $2,000 to $10,000, plus monthly charges of $100 and up. Also plan on spending at least four hours per day marketing, promoting and updating your site to ensure a consistent flow of traffic. To cut costs, some inventors simply produce a prototype and put it online to see if it sells. They don't produce the product until they receive enough orders to justify production costs.

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This article was originally published in the October 2003 print edition of Entrepreneur's StartUps with the headline: All Systems Go.

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