MARKET RESEARCH AND THE COMPETITION
Your shop is set up and you have your product in mind. You have the motivation and encouragement from friends and family that somewhere out there someone would want to buy your work. But where do you begin?
In order to successfully sell your product you must have a target market. It is not realistic and actually foolish to think that everyone needs or wants your product. On the surface this should seem logical if you are creating hand turned bowls on your lathe. Of course not everyone is going to want a salad bowl set turned from the finest blanks of walnut your supplier is stocking. But take something like residential kitchen cabinets. Everyone out there has a kitchen if they live in a habitable place. It is required by building code that there be a kitchen, with a sink and counter top space on each side of the sink and at least one side of the stove. But that does not mean that everyone out there is going to need a kitchen up grade. Some already have their kitchen and some that need a remodeled kitchen might be making do with what they have. How do you research the market to find if what you are making has a market potential and will appeal to enough people to buy?
Many sales books out there will say that you want to “create” the demand for your product. This is easier said than done. Sure if you have a load of money to spend on advertising and commercialization this might work. However; for most woodworkers, conventional advertising is just too expensive to be realistic.
For some products market research is easy. Say for a custom cabinet shop, you can go to your city or county website or extension office and obtain pertinent information on building and construction based on permits issued for new construction and remodeling. You can find out the number of new homes in the area being built and their reports usually itemize out the numbers based on the months so you can tell the “busy” season from the slow seasons.
In casket making, I get my demographic profiles from the State Department of Vital Statistics. This breaks down the number of deaths by county and I can tell the age groups of those deaths. I take these numbers and factor in the cremation rate of 30% and multiply this by my estimated market share 3% and I know what my sale potential is for the year allowing me to know what type of inventory to keep. For instance, and not to bore everyone with vital statistics, but by these reports I have determined that if I were to produce and stock 10 caskets that were sized for a child (by industry definition is a person aged 2 – 14 yrs old) and I had 3% of the market share for my county, It would take 50 years to sell those 10 child sized caskets. Therefore it is not feasible for me to stock a slew of child sized caskets.
That’s fine and dandy you say, I don’t make kitchen cabinets and am not in the funeral supply industry. Where does that leave the craftsman who makes small gifts and novelty type work that shows off my creativity like small turned bowls, clocks, furniture, picture frames whatever?
These types of items are a little harder to determine a statistical demand for. Especially when it comes to novelty type items that people might purchase simply because they appreciate the beauty of the craftsmanship but don’t have burning need for the item as they can get along without it. There is still a great deal of demand for these types of items. It is just more difficult to measure.
For starters, take your product and brain storm all of its uses and how you might market it and through what avenues. Don’t be narrow minded here. Take for example something simple like sandpaper. We are all familiar with it. We all use it to sand the wood in our shops. But how many uses can you think of for common grit sandpaper other than sanding out blemishes and smoothing wood? I have built some shop made push blocks for the joiner and glued sandpaper to the face to grip a board to keep my fingers away from the cutter head. I have seen some make their own thickness sander and use a sanding belt for the feed table to pass the stock through their machine. The people at 3M have devised a way to put it on a sponge and market it as an easy way to sand molding and contoured work. I have a set of Rockler Bench Cookies. One day I had a makeshift assembly line going and needed an extra set. Not having time for them to arrive by mail order, I cut out four plywood disks and glued sandpaper to each side and had another set of bench cookies. There are probably a dozen more applications for sandpaper than what I have listed here.
My point is with the product that you make, how can it be adapted to serve an additional client base than what you are currently targeting? Here is another real world example. Let’s say you make small trinket boxes or jewelry boxes. I would be willing to bet that the variety of boxes I make and sell every week are very similar to those that many of you might be making. The difference is, rather than having a traditional lid; my boxes have a fixed lid, and are accessible by unscrewing the bottom, and are sold to funeral homes as cremation Urns. I do the same with segmented wood turnings, vases etc.
Years before I ever started working professionally in wood, I built a walnut jewelry box as a Christmas present for my sister. It was a standard box, with a hinged lid and pull out tray. In fact I was a novice and couldn’t seem to get the mitered corners to align right so I hid the joints with a small turned accent column on each corner of the box. She loved the box. Little did I know back then that years later I would take the exact same design, place a divider under the tray to seal the bottom compartment from the lift out tray, call it a cremation urn and market it as an urn that had a small tray to store keepsakes like jewelry, or a wallet of the deceased. That design is now my largest seller in urns and I make them a dozen at a time and am constantly back logged with orders for them.
Am I telling everyone to go into the funeral supply business? Absolutely not. Truth is it is a difficult industry to break into and sell to. What I am saying is take your product and look at all the ways it can be marketed. Can it be used by more than one group or can it be presented in a different light to another group? I am not saying you have to come up with 100 different uses for your product, but if you were to come up with just one, you have the potential to boost your sales.
With this I would like to shift gears to the second part of this blog and make a brief comment on the competition. Sure there are a lot of other woodworkers out there that are selling products similar to what you make. Some might be right next door to you and have larger and better equipped shops. In the funeral supply industry some of my major competitors are very large publicly traded companies on the New York Stock exchange. If fact; one particular competitor, is considered one of the largest producers in the world. I won’t mention their name, as I haven’t obtained permission from them to name them in this blog. However; to give you an idea of their production volume, they produce more caskets in a single day than I can produce in ten years. I have a humble 30X40 shop where they have three manufacturing plants that are approximately 800,000 square feet a piece. But do you know what? I manage to compete with them. And as intimidating as it may sound this particular manufacturer is not my largest competitor.
Who is my largest competitor? You might be surprised to find that the same largest single competitor I have is the exact same single largest competitor that you have as well. In fact “OUR” largest single competitor is also the same largest competitor my barber down the street has, as well as the gas station, grocery store and everyone out there selling a product or service has to compete with. Who is this SINGLE LARGEST COMPETITOR? No, it’s not Wal- mart, or Costco, or the Chinese imports. Our single greatest competitor is The Status Quo.
What is the status quo? This is what your prospect is currently using before you came along. It might be the guy with the larger better equipped shop than you. It might be someone who has a smaller operation than you have. In fact it might be nobody at all. They might not be using your product or service by anybody and sometimes that is a harder sell to break into because it involves getting people to see a need for your product.
The main reason people do not buy a particular product or service is they see no reason to change the Status Quo.
What is the point here? My point is not to worry about the larger shop, or big mass production competition that you might be facing. No matter how large your competition seems to be there is a way to sell what you have to offer if it is presented in the right light to the right prospect. What your main focus needs to be when you attempt to sell is to sell yourself and your capabilities and bring to the attention of your prospect that what you have to offer is unique and something they will benefit from compared to what they are already doing or using.
I hope you all have enjoyed this blog. Tomorrow we will discuss the three groups of sales and the four sections of a sales call.
If anyone has any questions, feel free to message me and I will reply to all.
Thanks for reading my blog and I hope it is enjoyable as well as educational and beneficial
-- Michael Mills, North Carolina, http://www.scicaskets.com