How To Launch A New Ecommerce Product In 5 Steps Without Breaking The Bank
Launching new products offers the potential for your brand's next breakthrough and an opportunity for growth. They present something fresh to promote to existing customers and a chance to attract and convert potential customers through your marketing channels. However, a new ecommerce product launch is seldom easy, inexpensive, or risk-free.
In this article, I will share some insights I gathered from my experience as a co-founder of a successful pre-order platform over the past three years. Our operation is predominantly within the Shopify ecosystem. I also bring experience in innovation, including the successful launch of a smart home product on Kickstarter.
How New Products Drive Growth And Why They’re Expensive
New products can fuel growth by reaching out to a broader audience, generating buzz among loyal customers, and expanding market share through unique offerings that competitors might not have. They also help keep a brand relevant in the continually evolving market landscape.
However, the coin has a flip side. The expenses involved in developing, marketing, and launching a new product can be substantial. Costs accrue from research and development, production, packaging, freight, and marketing—all of these factors add to the total expense of launching a new product.
However, despite these challenges and costs, launching new products can help you drive growth and meet your targets.
A 5-Step Strategy For Successful Ecommerce Product Launch
The journey of introducing a new product is complex, but by adopting a strategic, optimized approach, you can simplify the process and set the stage for success.
Let's explore a template-style strategy to launch products more efficiently in ecommerce.
1. Idea generation and validation
Ecommerce businesses often handle many products, making validating and assessing customer demand for each new release challenging.
The generation and validation of fresh product ideas often occur organically when customers explicitly request them via customer service interactions, reviews, or replies to email marketing and content marketing.
However, this kind of new product can often be incremental, for example, a different colored variant of an existing product. This is great and worth doing. However, brand-new “breakthrough” products can be important for a brand’s growth and relevance.
These innovative ideas often stem from market research and an in-depth understanding of your customer base or a problem they face. One way to validate these big ideas is to drive traffic to a landing page with pricing and see how many people will click the call-to-action button. This technique is fairly well known now but has birthed some great companies such as Kettle and Fire Bone Broths.
Yet, for brands that launch multiple products throughout the year, this becomes a less feasible approach. More systematic methods include monitoring product categories via Google Trends for an upsurge in SEO traffic or Jungle Scout for Amazon metrics.
However, you already possess a customer base that has self-selected and shown their willingness to buy from your ecommerce website. Here are some ways to use your existing customer base for validation and idea generation:
- Communities: Be it a Facebook group, social media accounts, influencers, or a forum. Many channels from your marketing strategy can provide a rich source of insights and a means to evaluate potential traction for new ideas from your target audience and seek out USPs.
- On-site surveys: This allows you to display mock-up ideas for your next product launch and have users rate them, such as with a service like Product Love.
- Pre-orders: Nothing validates a new product like actual purchases, and it can be a great way to build hype. However, charging upfront is not advisable in this situation. Using deferred-charge or payment link pre-orders—where customers aren't billed until you ship—can be a great option for a pre-launch.
2. Product development and sourcing
Striking a balance between quality and speed in sourcing requires thoughtful trade-offs and optimization.
Prioritizing quality often means choosing a reputable supplier—preferably one you've previously worked with. Clear communication of expectations, careful evaluation of samples, possible site visits, and robust legal agreements are all worth paying attention to.
On the other hand, accelerating the process and mitigating pain points can be achieved by engaging experienced suppliers, ensuring high-quality communication, considering long-term contracts, employing sourcing agents, and leveraging digital platforms.
The time you invest in each of these aspects will depend on your budget, timeframe, risk tolerance, and the availability of suppliers in the market.
3. Pricing your new product
As I’m sure you know, pricing plays a pivotal role in any business. It's crucial to understand that a modest increase in your prices—say 10%—can boost profits significantly more than that, depending on your profit margins.
Nowadays, various third-party tools are available for most ecommerce platforms, allowing for price split-testing and experimentation on your online store to see how price changes affect conversion rates, etc. If you're taking pre-orders for this new product, consider calculating the number of pre-sales needed at different price points to cover the costs of bringing the new product to the market.
It's also worth considering offering pre-order exclusive discounts or giveaways. This strategy further encourages customers to place orders earlier, thereby speeding up the process of recouping your investment.
4. Financing your product launch
One of the major benefits of pre-orders is the early recouping of funds, which can assist in paying off the cost of your go-to-market strategy and suppliers/vendors. This can be achieved by charging upfront for pre-orders or using a flexible pre-order solution like PreProduct that supports deferred-charge pre-orders, allowing you to decide when to collect payment.
However, depending on your terms with the supplier and whether you can recoup from customers before your supplier purchase orders are due, you might still need additional funding for your product launch.
While I have limited experience with different financial tools like Shopify Capital and Revenue-based loans, I really enjoyed this episode of the Ecommerce Fuel with Bill D’Alessandro of Elements Brands. They share valuable insights on the various funding options for small and medium-sized merchants.
Finally, it's worth noting the "made-to-order" concept. While it's not new, many ecommerce stores operate this way for sustainability or cash flow reasons. Typically associated with big-ticket or custom items, it's also gaining popularity among fashion brands like FRAHM, which proudly operates on a made-to-order/pre-order basis.
We deliberately don't make enough to meet demand, so we don’t overbuy, which affects quality. You have to pre-order to get what you want.
frahmjacket.com
4. Freight and supply chain
Although I haven’t dealt directly with overseas freight for a few years, I routinely chat with merchants who do. Regarding pre-orders, the timing of customer charging is a critical consideration. If you opt for faster, more costly air freight to transport the stock of your new product, you might feel confident charging customers upfront for pre-orders.
However, with slower sea freight—particularly during unstable periods like 2022—it might be wise to take deferred-charge pre-orders. This way, you have the flexibility to trigger payment for orders when you’re ready without risking the goodwill of your customers by taking money long before fulfillment.
5. Early marketing collateral for launch
Unless your new release warrants a fully-fledged ecommerce marketing campaign from the outset, creating initial visual assets to support your new product’s marketing strategy can be a straightforward task. With a well-composed copy for the product page and at least one product image, you'll have enough to build buzz for your launch day.
Here are several ways to create the initial product images to use in your product launch strategy:
- In-house photography: You can photograph a factory sample within your workspace using a photo tent or similar setup.
- User-generated content (UGC): Reaching out to your email list or contacts in influencer marketing to receive early versions of the product in exchange for taking photos can create great, authentic collateral to use in your launch plan.
- Image modification: Using Photoshop or AI image-to-image translation models, you can manipulate existing product images to resemble your new SKU. (If using an AI generative model, just be sure to check their FAQs on commercial usage)
- Supplier-provided images: If your product isn't custom, there's a strong likelihood that your supplier already has product images. You can repurpose these for the pre-order phase.
Embrace Your Next Ecommerce Product Launch
A new ecommerce product launch can be both an intimidating and rewarding journey. It can stimulate brand growth and new customers and help keep you relevant in a dynamic market.
Despite the complexities and inherent costs, an optimized approach to your development, sourcing, and new product launch can significantly increase your chances of success.
Remember, customer experience with your target market is a goldmine for growth, and the right product could strengthen these relationships while paving the way for new ones.
So, embrace the challenge, employ a well-planned strategy, and watch as your new product release drives your brand onward and upward.
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