If You're Starting a Business, This is Why You Should Choose Consumables
It's an easier opportunity to do well in both the best and worst of times.
When it comes to starting a business, switching careers or even just adding new products to an existing lineup, you have almost infinite possibilities. There are a huge variety of industries, services and products to choose from out there — which is why sometimes it takes so long to finally come up with a product choice to launch and sell.
I prefer to frame it a different way: it’s not really about what’s best for you. It’s about what’s best. Period.
After growing several multi-million-dollar companies from nothing, I’m putting forward consumables for that title. Particularly in this post-pandemic uncertainty, if you’re thinking about starting a business, consumables offer the best chance at success.
For the average business, be the economy tough or tame, both selling and marketing your product or service are a constant challenge. For a business that deals in consumables, on the other hand, these tasks are infinitely easier.
1. Fewer barriers make easier sales
Unless you’re in consumables, there are a lot of barriers in the way of making a sale. Take a roofer. Mild climates work against them. Well-built homes (with roofs that last over 30 years) threaten their earning potential. At the same time, they flourish after disasters, like hurricanes or uprooted trees. Roofers need roofs getting damaged, or they’re out of business.
A roofer has to spend massive amounts of time, energy and money in finding new clients, and when the going gets tough, this can all be for nothing. At the same time, while the pandemic had a major economic impact and people lost their jobs, water, bread and toilet paper sales soared. Even in the toughest times, people shop for consumable products every day, so even if your brand is new, you have a much better chance of getting your name in front of a customer.
2. No one needs convincing
Unless you’re in consumables, making a sale often comes down to convincing people that they need something they may not really need. A BMW should last up to three decades, but a BMW salesperson needs to convince you to upgrade to a flashier model every few years. The roofer tells you that older roofs may fall apart in rough weather, but a new, more durable material can last up to 30 years.
Big companies are spending massive amounts of money to convince people to buy things that they don't need, but if scrimping and saving is an option, people aren’t always going to buy the new BMW. They are, however, still going to shampoo their hair and wash their hands. People need consumables, and a good one nourishes them or makes them feel better about their bodies. It’s easier to feel proud about a business that makes people’s lives better, rather than one that requires convincing consumers that they need a product that they don’t.
3. Consumers need to keep coming back
Selling good quality consumable products that people need not only makes getting customers easier, keeping them is a near guarantee. People expect their expensive new roof to last, so roofers need fresh targets for almost every sale, but if a customer uses up a consumable, they need to keep buying it — every time it runs out. If they bought your soap, and it worked well and smelled nice, they will likely return to your brand when they run out. With an excellent, high-quality, environmentally-friendly product, these customers can be yours for life.
In consumables, not only can you sell to the same customers again and again, but you get them back without having to spend a new set of marketing or advertising money. Maybe it costs $10 in advertising to get a customer, but if that customer keeps buying every month for the next few years, their lifetime value goes up, up, up. Meanwhile, the roofing guy who had to spend $1,000 in marketing to get one customer is only going to sell one roof, then spend another $1,000 to find the next one.
4. It’s always the right time and place
To boost sales, any business needs to make a name for themselves, but unless you’re in consumables, being the one business people think of right at the moment they need your particular service or product will make or break you. A roofer can’t spend their days searching out damaged roofs so instead, they focus on making their business the first name someone thinks of when they need a new one. This is called branding.
A roofer, a tree trimmer or someone selling office equipment — these business owners need to figure out how to get their name in front of more customers, but finding the right public at the right time is less of a concern for someone selling pasta. People need to eat, and even if it has to be gluten-free, almost everybody eats pasta. Tomatoes, hamburgers, toilet paper, dish soap — consumers need these products. For an easy business that can weather even the toughest of economic times, sell something that everybody genuinely needs.
5. The market is less limited
No matter the business or the products, know that your market is always limited. Though, with consumables, you at least have more flexibility. If I sell BMWs or fix roofs, my market is narrowed to a very specific group — people who buy fancy cars or have a damaged roof. A body wash that smells like pears narrows the market to people who prefer that scent, but a neutral smell has far fewer limits because everybody needs soap.
Narrowing your market can be one of the biggest mistakes to screw up the success of your consumables business, so only narrow your market if you really know it well. Unlike a roofer or BMW salesperson, expanding your offerings with niche market products is much more possible. Once you have reliable customers buying one of your soaps already, then you can more easily start suggesting one that smells like pears — if they know they like the unscented, why not try one that has a nice scent next?
If you’re looking to start a business, choose consumables for an easier opportunity to do well in both the best and worst of times. In fact, it’s the exact right business to be in when times are tough, because people stock up on the consumables they most use and trust. If you make a quality product that people need, consume and then need to replace, you can gain customer loyalty and up their lifetime value. If you focus on making a truly exceptional consumable product on top of all this, you have a recipe for real and long-lasting success.
Entrepreneur Leadership Network Contributor