plastic hotel toiletries

The price of non-plastic toiletries

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I have another meeting with a hotel on Monday. This one is to discuss a pilot with some of my non-plastic toiletries with all natural ingredients. When I originally did the numbers, I thought that packaging cost was less than the ingredients inside of it. Now I know better.

I have actual bids now with exchange rates, transportation costs, duties, etc. It’s clear that the packaging will be just as expensive as the natural ingredients going into it, especially on smaller volumes. I would need to win an actual hotel contract with guaranteed volumes to be able to achieve any profit even if I sell it at twice or more of their current buying price.

I suppose the good thing is that I don’t think that’s an unreasonable suggestion for them to charge each guest an extra $2 per night to offset the non-plastic toiletry option. In discussion with hotels, some of them seem to agree with my theory.

I also have found a local manufacturing partner. They too would need to scale up to service a contract. Fortunately, they are a young company which makes it more doable than with one more experienced but unwilling to work on margins or try new ideas.

Everyone I tried to outsource the work to so far said that it was impossible to service the hotel industry from Australia with all natural ingredients at a reasonable price. In fact, one business said they could only do it for $2.50 an unit to me which is ridiculous when the average price online seems to be about 32 cents each to hotels now.

I believe it can be done, but I need to pretty much build out the supply chain myself and offer something special that can’t be easily copied by bigger players.

So, here I go trying something new with non-plastic hotel toiletries and all natural ingredients that people in the industry are saying is impossible to do for a reasonable price. If I’m wrong, I could either fail at the sales call or fail in the implementation. If I’m right, there will be a lot less virgin plastic in hotels in Canberra and elsewhere in the future.

It’s worth the effort to know.

Understanding the mind of a consumer

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People are interesting. They don’t always do what they say they will do, and thus understanding the mind of a consumer is difficult.

Based on feedback so far of the pet barrier, I do believe that I could sell quite a few of the product. My challenge is that they don’t want to pre-order the product through the crowd-funding campaign. Instead, they want to buy it now – not wait for it or invest in it.

Hershey the Dog
Hershey, another successful prototype tester.

Of course my challenge is the ability to pay for the moulds so that they can be made in the first place. Could I sell 1000 units to break-even if I invested the money up front? I think yes if I did home shows and expos, but really I need to get it into a major retailer to make any real money off of them. And to fulfill that order, I would once again need more cash.

So, I’m pushing forward on the digging product which requires less capital. I spoke to my manufacturer last week, and he’s only capable of injection moulding which is what my original design was based upon.

However, I’m considering the fact that many people have larger yards and probably don’t want to put down one 25cm of the “no dig” product at a time to cover their fence line or yard in general. For them, a different type of product design would be more suitable.

So, I have a chat scheduled with a different kind of manufacturer next week that does more garden product type manufacturing. The good thing about this product is that it can definitely be made with 100% recycled plastics including possibly soft-plastic rubbish too.

I’m trying to line up some focus group conversations now for the digging product. Understanding the mind of a consumer is critical so that I don’t lose a ton of money by making the wrong product. Gee, this would be so much easier if I could just read their minds and of course, have a bank account full of cash.

The launch is over, now the work begins

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The big launch night has come and gone, and I am so thankful for the many people and businesses that made it possible to get to that point including friends that provided moral support. And now the real work begins.

Dogs from the Launch Party
Dogs from the Launch Party

The toughest thing about making a new product is to know if the market is happy to buy it. Using a crowdfunding campaign to market-test the concept before significant investment was a good way to see if people would truly put their money where their mouth is.

When doing market research, it’s one thing for people to say that they have a problem and will spend $X on the product. It’s another thing – the only real thing that matters is whether or not they are willing to actually pay for the product when it comes time.

So far, the results are less then stellar for the pet barrier. Enough people have seen the product now with plenty of shares and publicity. And yet, we’re nowhere near where we should be in terms of pledges at this point. Plus the surveys were pretty average meaning that only a handful of the people at the launch really loved the product. Others were sitting on an ‘okay.’

I still have a couple of major media things happening over the next week or so. So, we’ll see if it gains anymore traction then.

In the meantime, I had so many people asking about the digging prevention product for pets at the launch that I contacted my manufacturer to ask that we go back to the design work for that product. I’ll go ahead and push the button to get the prototype made now to see how the market responds to that. It will unlikely be through a crowd-funding campaign though.

Such is life as an entrepreneur. I have to pivot until I find the sweet spot now. It happens all the time for other businesses like in tech. So, I shouldn’t be too surprise for this to happen with my business too. Now the real work begins – first with the right mental attitude, and then to make this pivot happen if the first product is not selling to the first target market.

1 minute pitch

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Attended a product development workshop all day. At the end, I had to do a 1 minute pitch for my business with no slides. One minute isn’t a lot of time! Good practice though, and people are still positively validating my product idea.

Market research for products

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Met with a friend who gave me some new product ideas to research. Chatted with another friend on the phone about Product #1 – he had some ideas for how to design it better and also told me about some external variables that I wasn’t aware of at all that could impact the product. I admit that it’s complicated.

It’s a go!

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Received back 43 market surveys within 3 hours of it being posted on that Facebook group’s page – almost all very positively in favour of my product idea (#1), and just as many were willing to test my prototype. They also brought up a need for a Product #3 in the survey results. How can I not do this if so many people are looking (and in some cases begging) for these types of solutions?

Bought the business and product domains that I think I’ll need. I’m into this business with both feet now. I feel certain that I can help both people and the environment now.

Market research moving forward

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Heard back from that Facebook group that offered to post my product survey page. Yeah! I nearly gave up on them.

DILO 4/5/19

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Found some metal parts available online in bulk that will likely be needed as part of Product #1.

Searching for manufacturers and parts

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Went to hardware store to see if there were any standard parts that I might be able to use for Product #1 or #2. Nope! And nothing like these products really exist there.

Put together a rough budget with no real idea about how much it’s going to cost to get these products manufactured. I heard that simple moulds could cost about $20k each. This is definitely going to be the most expensive business I have after started.

Found an Australian product designer/manufacturer online – Manufacturer #1. I liked what they had done for another business in their case studies – makes me think that our values are aligned. I need to put together some sort of product requirements doc for a prototype before I call them. I’m not really sure how to do that, but I suppose I can use a similar format that I would have used for software development in my old IT days