A Young Entrepreneur's Quick Path to Profitability
Vermont's Matt Benedetto has been selling things since he was 13, when his mother taught him to crochet and he started making winter beanie hats for skiers in the Northeast. But when he graduated from college last year, the young entrepreneur decided it was time to think bigger.
His idea? A line of fabric-covered iPhone cables and a new business called Eastern Collective.
"One day I was listening to music through a pair of headphones that had a black shoelace-like cord rather than plastic," Benedetto recalls. "My iPhone was sitting on my desk and plugged into my computer with the stock white cable. I wondered to myself why there weren't more unique cables for iPhones the way there are for headphones."
Benedetto embarked on his market research in earnest. "I looked both online and in-store at major electronics retailers with no luck. I honestly couldn't find anyone producing a similar product," he says.
So he decided to make something himself. Relying on his design experience from knitting hats, plus his familiarity with sailing-rope weaves and color pairings (he's an avid sailor), he drew up a line of four distinctive cable covers: three in bright color combinations and a sleek black-and-green cord.
At the same time, Benedetto had to find a manufacturer who could turn his sketches into an actual product. He talked to 10 overseas manufacturers about creating samples and gradually winnowed them down by eliminating the ones that couldn't handle the job or just didn't get the concept. Once he found his manufacturer, he had several samples made up and gave them to friends to field-test. After seeing that his designs could stand up to daily use (and abuse), he gave the go-ahead for initial production.
Next came the question of pricing.
Apple sells its 30-pin dock-to-USB connector for $19, but it's easy to find cheaper third-party alternatives. Benedetto wanted to attract customers who saw the value in his product, but he also wanted his price point to be low enough that they would consider buying more than one. He settled on an introductory price of $14.95, available only on the Eastern Collective website.
By August 2012 Benedetto was ready to market his first batch of 1,200 cables. After he promoted the product to gadget and lifestyle publications to generate buzz, Benedetto's entire first run sold out within two weeks. To his surprise, some people bought all four colors.
Over the next several months he experienced rapid growth. By September a second batch of 7,200 Eastern Collective cables hit the market, this time priced at $17.95 for the standard size and $22.95 for a new 6-foot version. By January Benedetto had placed a third, larger order for nearly 10,000 units.
Benedetto credits much of his initial success to the early press buzz that resulted from his own hard work. "During the week of the launch, I spent late nights reaching out to major blogs and publications," he says. "The next morning a few websites would feature the products, and I could watch the domino effect as the story was slowly being picked up across the internet." The cables have been featured by the Gizmodo tech blog and on the websites for Wired and Lucky magazines, among other outlets.
Success brings its own challenges for a one-man operation, and chief among them for Benedetto is ensuring he has enough product to sell. "I formed a great relationship in a very short amount of time with our manufacturer," he says. "They have been amazing keeping up with demand as we expand into more units as well as new products in 2013."
Some of those new products include cables for the iPhone 5's new Lightning connector, as well as Mini USB, Micro USB and standard headphone jack cables. "My plan is to make sure you'll be able to find an Eastern Collective cable for your device whether you're an Apple user, have an Android phone, read on a Kindle, watch video from a GoPro camera or listen to music in your car.
Quick Path to Profitability
A successful launch is months in the making
T-minus 5 months
Research the competition. Find out who, if anyone, is already doing what you plan to do, how they do it and how you'll do it better.
In addition to discovering that there was no competition for Eastern Collective's vibrant smartphone cables, Matt Benedetto discovered a less expensive source for iPhone cables than Apple, one that allowed him to undercut the company and make value a part of his sales pitch.
T-minus 3 months
Test your product. The best way to know if what you're offering will meet your customers' standards is to find people who represent your target market and let them test your product.
Benedetto's young, active friends reported back to him on how his samples held up across a variety of uses. The bonus: Finding people who utilize your product in a completelydifferent environment or manner than you expected.
T-minus 6 weeks
Develop a launch plan. Figure out how, when and where to sell your product, and stick with it. A trade show may be the quickest way to grab retail-store buyers, while the e-commerce route requires a website and the building of product awareness through blogs and media outlets. Quick tip: Add two weeks to your expected product delivery date from a manufacturer. "You don't want to guarantee a product to your first customers and not be able to deliver," Benedetto says.
T-plus 2 weeks
Keep the momentum going. If the initial product launch was successful, turn it into a successful monthlong launch, even if you're out of stock. The products are still fresh and desirable at this point, and people will be willing to wait for their order. "There are always untapped avenues to explore to keep the buzz going," Benedetto says. And those first customers? Give them a reason to come back with the promise of new product releases in the coming months.