Here’s How Small Manufacturers Can Succeed Against Big Brands

Entrepreneurs and inventors have long been the heralded heroes of capitalism, innovating and making our lives easier with their inventions. However, despite how exciting these rags to riches stories can be, it’s not always a happy ending. The SBA reports that 30% of small business fail within the first year. This number is likely even higher in manufacturing, as start-up costs are so high. No matter how great the idea is, the costs to manufacturer, promote, and position within the market are tough obstacles to overcome. Not to mention that a young business needs to stay well leveraged during this process. Launching a new product as a newcomer in an industry can be a cutthroat venture. Young entrepreneurs often find themselves working on their business after hours, while keeping a day job. Trying to put in enough time to grow the business, without taking the risk of burning their ships and jumping in full-time. Jostling for market position against big established brands is a difficult task, as they have a much larger marketing budget, in-house expertise, and are a trusted name to consumers. Despite the challenges, America’s small manufacturing warriors are competing and succeeding in many cases. Here’s how you can too.

Market Research/Market Opportunity

Make sure you do your research on your target market. I’ve seen several cases where an entrepreneur will launch an excellent product, only to realize the market is too small, too competitive, or a better product already exists. Those companies don’t last long. You need to ask the hard questions and play the devil’s advocate. Don’t go easy on yourself:

Some examples:

  • Is the need you’re trying to fill already filled?
  • How many competitors do you need to position against and are their products better?
  • Does your product offer something others don’t?
  • What potential sales volume could you expect? Will that cover your expenses?

Stay Niche

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You can find success as a small fish in a big pond or as a big fish in a small pond, there isn’t a blanket answer here. However, you’re much more likely to find more success as a big fish in a small pond. Don’t try to be everything to everyone, fill a specific need for a specific demographic and you’ll become the trusted authority in that space. Let’s look at the fishing industry as an example. This is an extremely cutthroat industry as a few big brands own the industry: Cabelas, Scheels, and Bass Pro Shops. These giants crush small retailers and manufacturers like cockroaches all the time. However, they neglect niche products lines as they want volume and are not agile enough to serve those niches. This is where you can serve the demographics they’re not serving. Take small manufacturer FloatTubeFishing.com as an example. Float tube fishing is a small niche within the fishing industry, but this company creates and offers more accessories than anyone else in the market. Cabelas has a small section in their stores dedicated to float anglers, but only carry 20% of available accessories. This small manufacturer is always coming out with new products and innovating. Sales volume is relatively small, but sales are consistent and large brands cannot keep up with all the options. They also offer more specialized and personable customer service.

Keep Expenses Low

I’ve seen many a sad story of entrepreneurs spending hundreds of thousands on patents, attorneys, molds, tooling, and shipping costs overseas – only to realize a small volume sales. Keep your expenses low early on. Learn and do as much as you can yourself, use your own garage instead of buying commercial space if possible. Create a simple and informative web site, don’t spend thousands for a web developer to build a custom site. Sure, there will be necessary start-up costs, but keep costs to the necessities or you’ll get buried in debt fast and sales will never catch up.

Engage and keep a pulse on the community

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Find out where your target prospects hangout online and become part of the community. Contribute value to the communities to gain trust, don’t simply promote your product. Get their feedback, find out their pain-points, and then figure out how your products can solve their problems. The best feedback comes from your customers and this will dispel many assumptions you may have had.

Play to your strengths

What’s your UVP (unique value proposition)? What do you offer that similar products don’t? If you fill a need better than competitors do and you’re not just a private label copycat product off of Alibaba.com, then marketing your product will be exponentially easier. Don’t try to be somebody else, or something you’re not, be the best ‘you’.

If you can’t beat ‘em, join ‘em

This mainly refers to Amazon.com and eBay. However, other online retail sites are emerging, such as Walmart.com and Jet.com. If you’re trying to be found online, Google often gives preference to established and trusted brands vs. new sites. To offset this disadvantage, list your products in popular online marketplaces. Get your products on Amazon, eBay, Walmart, Jet.com, Overstock.com, Etsy.com, and any other relevant marketplaces. View it as getting free shelf space and piggybacking of off their web traffic.

As you can see, small manufacturers face an uphill battle competing with the big boys, but it can be done. David can beat Goliath. You don’t have the deep pockets of large brands and you won’t beat them at their own game. Wage guerrilla warfare. Become a digital marketing ninja. Play to your strengths and pour resources into niche areas you’re confident you can succeed in. The sky is the limit for a determined small business in a growing market.

Photo Credit: Chris Thomas

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