Posts

Perhaps the most common hurdle that aspiring entrepreneurs and inventors have to overcome is funding. 

After you’ve come up with a stellar idea that solves a real-world problem, you’ve got to find a way to pay for the product development and design process—as well as everything that comes after. And it’s not easy. We’ve seen firsthand how hard it is to get your product idea off the ground.

But, with a bit of research and hard work, you can get funding for your product. And in today’s day and age, you have more options than ever before. 

In today’s article, we’re going to cover everything you need to know about funding, the 9 different types of funding, and how you can leverage it to bring your product idea to life. 

Before You Look for Funding…

Oftentimes, first-time entrepreneurs jump the gun. What you might think is the next best product idea to be featured on a show like Shark Tank—might not be. 

And so, before you spend too much time on your product idea, you need to make sure it’s worth pursuing. If you rush ahead you could make the same mistake the infamous Fyre Festival made back in 2017. 

For those of you who don’t know, the Fyre Festival, which was planned and executed by Billy MacFarland, bombed catastrophically just a few years ago. And with its downfall went $3 million dollars of investment opportunities. MacFarland also went on to serve time in prison for committing fraud, receiving several lawsuits after the fact.

While that’s certainly the worst—and most unlikely—scenario, there are steps you should take to give your idea the best outcome possible.

Before you invest too much time and effort in your product idea, you need to make sure it’s viable. Because you’re not just creating a product—you’re starting a small business. And when you have a business-focused mindset, you’ll make smarter decisions in the short and long term. 

Here are the 4 steps you should do first:

1. Research the market 

Before you get too far, you need to see if there is a need for your product. This is one of the key steps in Product Validation. By finding a need or a gap in the market that your product can fill, you’re ensuring your idea is not just viable—but also profitable.

And if you’re going to convince someone to provide you with funding, you need to prove to them that you’ll be able to make that money back. Otherwise, they have no reason to invest in your idea at all.

Now, we’re not saying you need to prove you can sell your product to everyone on the planet. Instead, you need to prove there is a niche market out there that will purchase your product. If you’re trying to sell the next best razor and compete with massive companies like Gillette—you’re not going to get very far. 

However, if you’re going to sell a subscription service to busy workers as Dollar Shave Club did, then you have a much smaller and highly-targeted niche. That makes it easier to stand out and own a small segment of the market.

Brian Chesky, one of the founders of Airbnb, phrased it best, saying to “build something 100 people love, not something 1 million people kind of like.” 

2. Create a business plan 

According to research from the Journal of Small Business Management, 71% of fast-growing companies have a business plan for their company. 

When you clearly outline the next steps for your business, you’re going to be more prepared than other entrepreneurs out there. You’ll have a more defined structure, be able to clearly define your goals and account for future obstacles. Plus, it allows you to track your progress as you scale your business.

And most importantly—you can more easily secure external finances or loans.

When you can outline your financial projections and show clear marketing strategies, not only will you feel more organized and prepared, others will too. 

3. Gather feedback about your product

After you’ve done some preliminary research and drafted a solid business plan, you can start actually designing the product. This is the product design and development phase. And let’s be real, it’s the most fun part. 

Here you get to put the pieces together—literally—to create a prototype. After several versions, you should end up with a Minimum Viable Product (MVP). This is still part of the early stage of the final product, but it’s useful in helping you get feedback.

At this point, you want to send the product to some early beta testers and critique. Most likely, this will consist of yourself and close family or friends. However, it’s also a good idea to find potential customers in your target market to test it out as well. Their feedback is the key to once again confirming your product is something consumers will want and use.

4. Hire some professional help 

Finally, the last step you need to take is to get help from experts who have done it before. Whether you’re hiring a business consultant or a product design firm, it’s a good idea to reach out for professional advice. 

Not only will they help you make sure you are following all necessary regulations, like patent application requirements or getting product certification, they will also help you with things like packaging design and prototyping. 

After you’ve followed these 4 steps, you’re ready to go out there and get funding for your product idea. 

How To Get Funding for a New Product Idea

It’s the most common question we get from our clients—and we understand why. One of the number one reasons small businesses fail is due to a lack of funding or working capital, according to Investopedia.

And when it comes to finding someone who will invest in your product idea, that’s harder than you might expect—especially if it’s your first time launching a product. 

Why Getting Funding is Difficult for Startups:

When it comes to investing, there are a lot more people out there pitching ideas to VC firms than there are investors willing to take on the risk of a startup. And that’s not likely to change anytime soon. 

In fact, according to a survey from Gallup, 77% of founders cited personal savings as their main source of funding for their startup. And an article from Entrepreneur reported that only 0.05% of startups actually manage to raise any venture capital. After reading those statistics, it’s easy to be disheartened. 

On a positive note, there are a lot more ways to get your small business off the ground than there were in the past. And, if you play your cards right—your product could take off.

What Are the Different Types of Funding?

There’s no one “right way” to fund a business, but some methods are easier than others. So, you need to evaluate all the options available and find one that is best for you. While you can rely on one type on rare occasions, most businesses acquire funding from a variety of different sources. The type of funding you go for will also depend on what stage you are in your business because some are only relevant for startups. 

Thankfully, when it comes to acquiring funding or working capital, you have a lot more options today than you might have had 10 years ago. 

Here are 9 different ways to fund your product idea:

Funding MethodHow It Works
Personal InvestmentAlso called “bootstrapping,” this is money out of your own pocket you invest.
Patient CapitalPatient capital or “love money” is loaned to you by a friend or family member.
CrowdfundingThis involves using online platforms that help you raise small sums of money from a large number of people interested in your future finished product.
Pitching CompetitionsThese are competitions that give you a chance at funding your product idea as well as feedback on your pitch.
Bank LoansThis is money from a business loan provided by a bank. A bank won’t require shares in your business, but you’ll have to follow a repayment plan.
Startup Accelerators & IncubatorsThese organizations offer a full range of resources to new startups, including office space, mentorship, and connections to potential investors.
Angel InvestorsAn “angel” is a single wealthy individual, often a retired executive, who invests in exchange for a share in your business.
Venture CapitalVenture capital firms are companies that actively look for startups to invest in, and they will often invest greater amounts than angel investors.
Government GrantsThis refers to types of government funding, which will vary depending on your region.

Let’s explore each of these a little bit further.

  1. Personal Investment

Funding it yourself is a choice that many first-time business owners make when starting their foray into entrepreneurship. The advantage is that you’ll be the sole owner of your enterprise, wielding full control.

However, an obvious downside is that this is all your money we’re talking about. Dipping into your personal savings does come with its own risks. That may have been money for your kid’s college education or for the mortgage on your house. So, if you go this route make sure you’re still leaving yourself with some savings and not going into major debt.

Take Yvon Chouinard, the founder of Patagonia, as a shining example. In the 1970s, he simply started selling a variety of pitons (small metal spikes used by mountain climbers). Eventually, he would go on to sell clothing as well—and Patagonia was born and funded solely by its annual profits. 

  1. Patient Capital

Colloquially, you may have heard of this referred to as “love money.” Patient capital is loaned to you by a friend, parent, spouse, or other family members, and it is quite common for first-time business owners. 

However, keep in mind that this will often provide only a small source of needed funding. Additionally, getting a loan from relatives changes your dynamic and you now have a business relationship that needs to be navigated with care. Often, the person providing funds is given a share in the company or repaid later. 

When done correctly, patient capital can be a great help in getting your business off the ground. Jeff Bezos famously started Amazon with $300,000 from his parents—and we both know how well that worked out.

  1. Bank Loans

While the first two funding methods are very common, not everyone has thousands of dollars in their savings accounts or relatives willing to invest in your idea. Because of this, a large number of entrepreneurs turn to banks for assistance.

Bank loans are the most common type of business loan—and you can approach different banks to see which one meets your needs. A major obstacle with securing a bank loan is that banks may want to see historical evidence that you can run a lucrative business. Excellent credit is also expected. 

On the positive side, you only have to worry about making the repayments, and you are still in full control of how you run your own business.

  1. Crowdfunding

While some of the more traditional funding options involve loans, there are more recent options like crowdfunding. When the first crowdfunding platform, ArtistShare, launched in 2001, it set off a huge trend for funding projects digitally.

Crowdfunding involves raising funds by collecting a small amount of money from a large number of individuals, usually through an online platform. Today, there are plenty of options like Kickstarter, GoFundMe, and IndieGoGo.

Some of the key benefits of crowdfunding are that you aren’t required to give any of the finances back or give up any control in your business. However, when you use a crowdfunding platform, the individuals contributing are doing so under the pretense that they will receive a finished version of your product. If you don’t follow through, then you could face lawsuits and a huge media backlash—like the “Coolest Cooler” failure back in 2014. 

As you can imagine, crowdfunding is hard. Instead of trying to convince a handful of people to support you—you need to convince thousands. Thankfully, there are full-service marketing agencies available out there that can help. 

One option we often recommend to our clients is Launchboom; they’re one of the leading crowdfunding companies out there, specializing in getting funding even on the first day of your campaign.

  1. Pitching Competitions

A more uncommon way to fund your product idea is by entering a pitching competition. This can be anything from a TV show, like SharkTank, to a local competition in your city. Sometimes, companies even host their own pitching competitions like Cards Against Humanity did with their web show, Tabletop Deathmatch.

Typically, the investors will ask for a stake in the company, but in some competitions, the winners get the prize money and they don’t have to repay it. However, there are usually entry fees to compete in these to pay for the cost of the event.

Similar to VC funding, you need an epic product idea to impress the judges. If you think you have a good chance, then it’s a no-brainer. But even if you don’t, entering the competition can still provide you with other benefits. When you submit your idea, you will get valuable feedback on your product which is useful even if you lose.

  1. Incubators & Accelerators 

A startup incubator helps startups by providing early funding and they don’t typically seek any equity. Their goal is to help you get to what’s called the MVP stage so that you can then apply to a startup accelerator program. 

After you’ve got a product in hand, you can apply to a business accelerator. These organizations will provide office space, management training, and a range of other services to startups. However, unlike incubators, accelerators do usually ask for equity in exchange for their help and funding. 

In both cases, incubators and accelerators support a business through its early stages and provide a lot of mentorship and support. Another benefit is that they can connect you with other funding sources, such as VC firms, angel investors, and banks. 

The downside is that you can’t rely on them in the long term. They’re designed to help businesses in the startup phase specifically. And while they provide you with ample opportunities, they do often still require a share in the company. Because they have so many resources, they tend to be quite competitive and difficult to get into as well.

  1. Angel Investors

Angel investment describes when a wealthy or high-net-worth individual decides to fund your business. Typically they will do so under a few conditions—namely a share in your company and a seat on the board of directors. You may also hear them referred to as a private investor, seed investor or angel funder.

While you will no longer be 100% in charge of everything, an upside here is that your angel investor can bring relevant business experience that goes a long way in aiding your success. And as a first-time entrepreneur—that business guidance gives you a huge leg up.

That being said, in most cases angel investors are usually connected to the startup in some way, like through friends or family. However, you can also find them through angel-specific organizations and websites. Generally, they keep a low profile and will need to be sought out.

  1. Venture Capital

In addition to individual investors, some corporations also exist just to invest in startups. These venture capital firms want to fund businesses that have high growth potential, and they usually go for those in sectors such as biotech and IT. 

If you can present them with a killer business plan and convince them it will pay off, then you have a better chance of getting VC funding. Plus, a venture capitalist can also provide additional expertise and resources.

The downside is that you will have to give up some control of your business. Since they’re fully invested in making sure your company grows and turns a profit, the VC firm will have strong opinions on what’s best. Facebook is one famous example of a company that benefited from VC funding, and it was partially due to the fact the company had a valuation of $100 million (USD) in 2005. 

  1. Government Grants 

Finally, the last way to fund your business idea is with grants offered by your government. A grant is a contribution that is not expected to be repaid, but you will have to follow certain terms as to how the money is to be utilized. For example, a business that is developing technology that helps deaf people could be allocated money for research and equipment.

In the United States, the government only awards grants to nonprofits and educational institutions. That being said, they do still give out loans to businesses. Many other countries also provide business grants, so make sure to research what’s available in your country.

Key Takeaways

At the end of the day, it’s important to remember you’re not just creating a product—you’re starting a business. And with that comes a lot of challenges. From creating a viable prototype to securing funding, there are a lot of steps involved when creating a product that succeeds.

Whether you’re a first-time entrepreneur or an inventor with years of experience, it’s still overwhelming to do it by yourself. Luckily, there are ways to make it easier and find the support you need. One way to make the process easier is to work with a product design firm that’s done it before—and can help you get through the hardest parts.

We’ve helped our clients bring their product ideas to life, and we can help you do the same. Reach out today and we’ll help you with everything from product validation to prototyping. 

About the Author: 

Ventrify is a product design and manufacturing firm that helps entrepreneurs bring product ideas from concept to market. We take in fledgling ideas and bring them through our iterative design process to create products our clients can be proud of. Then, we work with manufacturing facilities worldwide to bring our clients the highest quality products at competitive prices.

If you have questions about using prototypes in your product development journey or need help, reach out to us through our Website, Facebook, or LinkedIn.

Article by Victoria Fraser

When you have an idea for a new product, the excitement is tangible. Whatever your product is, you need first to make sure it’s actually worth investing the time and effort into. If you don’t, then you risk ending up with failures like the famous Coolest Cooler disaster on Kickstarter. 

Many entrepreneurs are unfamiliar with the process known as product validation. Anxious to launch prematurely, they shy away from doing their due diligence. Sure, it can be hard to let go of an initial business idea but is much better to adopt a philosophy of “fail soon, fail quickly” and embrace the many iterations of product development. 

And so today, we’ll learn about what product validation actually is, why it matters, and how to implement it in an effective way.

What is Product Validation? 

Product validation is the process of checking if a product meets customer needs and is likely to be profitable. Many product ideas never make it to market, especially if they aren’t validated. 

With in-depth research and prototyping, you will work your way to a Minimum Viable Product (MVP). This is basically just a test version made with the only most essential features. An MVP helps you determine which of your product’s features are of value to customers, so you can serve them as efficiently and profitably as possible.

For example, let’s take a simple product like an electric toothbrush. The main purpose is to brush your teeth, so your MVP should be able to do that. Anything else is extraneous. While it might be nice to have a hidden floss compartment, it’s not crucial. By creating an MVP, you can see what is necessary—and what is not. 

Inspector Gadget is a cartoon for a reason; he’s not very realistic in day-to-day life. 

Why Product Validation Matters

In 2004, Eric Ries learned the importance of product validation the hard way. For those of you who don’t know, Eric Ries is a software engineer and entrepreneur who launched an online reality world and social networking platform known as IMVU. The platform allowed users to create 3D avatars and interact with each other in a digital space.

His initial release of IMVU came after 6 tireless months of development and product creation. Much of that time was spent integrating all of the other instant messaging services available at the time into his platform because he assumed this was what customers wanted.

After the launch sadly flopped, he did interviews with target customers and he realized his key assumption had been incorrect. People weren’t inviting friends through other instant messengers because they didn’t yet know if IMVU was any good—but they were willing to download IMVU as a new and separate service to try on its own. From this painful experience of wasting 6 months, Eric Ries learned a lesson in product validation that we can all learn from.

Product validation is critical not only from the perspective of a company’s team and investors—but for the benefit of consumers. A strong customer focus and dedication to understanding their needs mean you’ll be far more successful. 

Another aspect of product validation that many fail to consider is that it can be a great time to grow brand awareness. Getting feedback on your early prototypes is a way to get your customers involved and be a part of something. Many Kickstarters, for example, create social media pages and focus their community to build relationships with future customers.

How To Do Product Validation

Product validation can be broken down into four basic pillars. We must first validate the problem that the product will attempt to solve, examine the market for the product, prototype the product itself, and assess buyer willingness

Whether you are preparing to sell physical products, like merchandise, or digital products, such as software tools, you need to make sure it’s a viable idea And so, here are some basic steps to consider:

1. Problem: If you haven’t yet, find your first 5-10 people who are enthused by how the product idea could help them. This is evidence a real pain point exists. From there, interviewing can be done to dive deeply into the relevant problem.

Another way to do this is to observe the issue in real-time. For instance, you might sit in on a business meeting where workers are struggling with technology limitations that your software idea could solve. Many inventions came out of simple observation.

Lupe Hernandez, a student nurse, is one such story of this. While on shift, she saw the need for hand sanitizer in places where there was limited soap and water access. That observation would eventually lead to the invention of hand sanitizer. 

2. Market: Next, you need to conduct market research to see what the current state is by getting information from your potential customers. 

You can conduct market research in a variety of ways. Many businesses do it in-house but you can also hire a third-party company. Here are some of the ways to gather market research:

  • Surveys
  • Product testing
  • Focus Groups

Let’s use the example of a new type of mop. You might do surveys online asking people what they look for in their cleaning supplies and what problems they have. You could also lookup forums online to see what people are saying and even in the product reviews of competitor mops. 

3. Product: After you’re sure your product idea can fill a gap in the market, it’s prototype time. For your very first prototype, think of something you could put together quickly. As you iterate on your prototypes and increase the complexity, you will need to keep testing them. You’ll also need to seek out early beta-testers for feedback.

Prototyping is vital in making sure your product works—and does what you’re promising it does. We always recommend working with a product design firm to help you bring your product idea to life. They’ll have the knowledge and skills to help you through the product design and development phase easily.

4. Buyer willingness: Finally,  you need to assess if your potential customers are actually going to buy your product. You can also identify their Willingness To Pay (WTP), which is the maximum price your customers would pay for your product.

To identify this, you can again conduct research a few ways: 

  • Survey and Focus Groups: Asking customers directly what they would pay.
  • Competitor Analysis: Assess competitor pricing to help guide your own.
  • Conjoint Analysis: A specialized type of survey where customers rank each feature with numerical value.
  • Experiments & Testing: Adjust your pricing and see how sales are impacted.

Product validation is nonlinear. At any point, a test may fail and need tweaking. If you end up stuck at a given stage, you will know to either regress to a previous stage of validation, or quit and start from square one. Delegation is your friend here. 

And if you need help, there are plenty of product design firms out there who will take on all the prototyping and user testing, and bring more objectivity to your decisions. They’ll guide you through the process and make sure you’re doing everything right.

Once your product has passed all this and is validated, you can be confident it’s time to go to market and bring your idea to fruition. 

Key Takeaways

Product validation is how you pave the right path to solving a real customer problem. It is rare for anyone’s initial product idea to strike gold, but it helps to remain curious, open, and customer-focused through the stages of development. 

What you ultimately end up with is a product idea that passes every conceivable test and will actually fill a gap in the market. With product validation, you’ve ensured your product idea is not going to be a flop.

We’ve helped our clients bring their product ideas to life, and we can help you do the same. Reach out today and we’ll help you with everything from product validation to prototyping. 

About the Author: 

Ventrify is a product design and manufacturing firm that helps entrepreneurs bring product ideas from concept to market. We take in fledgling ideas and bring them through our iterative design process to create products our clients can be proud of. Then, we work with manufacturing facilities worldwide to bring our clients the highest quality products at competitive prices.

If you have questions about using prototypes in your product development journey or need help, reach out to us through our Website, Facebook, or LinkedIn.

Article by Victoria Fraser

Want to boost efficiency and cut down on costs within your product development? We certainly do. That’s why today we’re diving into the small batch production method and why product design firms like ours are switching to this model.

Product designers and manufacturers have used the traditional models of manufacturing for decades, but some companies are trying something different. Today’s brands are seeing the benefits of running small batches instead of large batches and there are plenty of reasons why they’re doing so.

But first, we’ll define it for you.

What is Small Batch Production? 

Small batch production is a process during the manufacturing phase where your product is created in specific groups and smaller quantities than traditional batch processing. During the manufacturing process, each step starts and finishes before proceeding to the next one.

Similar components are produced together to allow for more flexibility than traditional large batch production methods because you change the next batch easily if you need to. It also increases efficiency when compared to a continuous manufacturing process where many different steps are occurring at once.

For example, let’s imagine you are manufacturing a children’s toy with various pieces, like a dollhouse. After uploading the specs, the factory makes 10,000 dollhouses with furniture and sends them to you. Once you get the product, you realize the design was too small and is a choking hazard. Now, you’ve got 10,000 dollhouses that you can’t use.

Instead, with a small batch model, you can catch errors and make changes more easily with each version of your product. That’s just one of many reasons to use it, but there are plenty of others.

Benefits of Small Batch Production

While it might seem groundbreaking it’s actually been used for a long time. The fast-food industry and clothing industry are just a few that manufacture their products in small batches. 

Taking inspiration from car manufacturing plants, McDonald’s famously implemented their “Speedee Service System” back in their early days to beat their competition. Their fast processing time and low-cost strategy lead them to become the international fast-food giant they are today.

Let’s see how smaller batches can improve your product development process.

Improves Quality Control

Remember that epic cooler from Kickstarter? Well, what wasn’t so epic was that their product completely failed to live up to the expectations and many buyers never even received their product. 

If you have an issue with your design, you can catch it a lot sooner with small batch processing. Ideally, you fix it before it reaches the end consumer. However, if it does make it into their hands, you’ll at least know it may only be a small number of products that suffered.

More Flexibility

Since you’re more flexible in your manufacturing princess, you can make changes on the fly. If a new trend comes along, you can tailor your product to it. Additionally, if initial user feedback shows there’s a simple feature missing that would make their lives easier, you can add it in for the next batch.

Remember when jewel tones were all the rage in the 1990s? For video game manufacturers who saw how successful colourful Gameboys were, they could’ve responded quickly and captured part of that market by releasing their own colourful versions of handheld games.

Plus, when things go wrong—as they inevitably do—you can react act easily and quickly with a small batch method. If your supplier for one part is suddenly unavailable, you can find a new one for that part asap.

Better Affordability

For first-time inventors and product designers—cost is everything. Thankfully, small batch manufacturing lets you save money, meaning you need less funding when it comes to your startup costs. This allows you to focus more efforts on other aspects of your business like marketing and advertising.

Because you’re producing fewer components and parts, small batches are cheaper to manufacture. On top of that, they take up less storage space. That means you don’t need huge warehouses to store your product because there just isn’t as much of it.

Increased Efficiency

Finally, our last point is that small batch production is a huge time saver. You can test your components in small batches more often to catch errors and greatly improve the function of the end results. 

It also allows product designers to focus on one project at a time, reduces things like context switching. Instead of working slowly on multiple tasks or projects, you focus your efforts on one task and produce more efficient and higher-quality results. 

We’ve been implementing small batch strategies in our own processes, and it results in faster turnaround time and shortened the product development process for us. Instead of taking years to create a product, we’ve brought our clients’ ideas to life in as little as 3 months. 

Downsides of Small Batch Production 

Now, nothing is perfect. There are some pitfalls that you can experience when using small batch production methods. Even though there are fewer of them overall, the problems are worth noting.

Here are some of the issues with small batch manufacturing: 

More Downtime

Since you’re starting new batches more often, there is an increase in downtime. Each time you change something in your product design, you have to change something on the manufacturing line.

Constant Attention

Because you’re running more batches, you do have to stay on top of it. Instead of placing a factory order for thousands of units and forgetting about it, you have to keep monitoring it. 

Small batches require more quality control testing and assurances because you’re making a new batch every time. Even if you’re not changing anything, you still want to ensure it’s working as you intended.

Less Product in Stock 

When you have less product available, you’re more likely to run out of it. While scarcity is a great marketing tactic to entice buyers, it’s not great when you miss out on sales. By selling in smaller amounts, you risk lowering your profits just because you ran out.

We saw this when the PlayStation 5 sold out around the world because of supply chain issues caused by the pandemic. While they are creating more models, it still doesn’t look like they’ll be able to fully meet the demand until 2022. 

Harder to Find Factories 

Finally, it can be difficult to find suppliers when you’re placing small orders. Factories have to adjust their setup each time and when they’re only making a small batch, it’s worse for their bottom line as well.

Also because you’re ordering less stock, you have higher unit costs, too. As such, you’ll either have to raise your pricing or take a somewhat worse profit margin. 

Pros and Cons of Small Batch Production

Now that you read them all, it’s easy to see why small batch production is taking over the product design industry. To summarize here’s a quick table on the pros and cons we discussed today:

PROSCONS
Improved Quality ControlMore Downtime
More FlexibilityConstant Attention
Better AffordabilityLess Product in Stock 
Increased EfficiencyFewer Factories Available

Key Takeaways

Not every business uses the same model for their manufacturing, but it’s important to consider all the different methods you can use in your product development. For some products, small batch production might be the answer; for others, the traditional model might work just fine.

At Ventrify, we use the latest strategies to design and develop successful products for our clients so they can save more time and money. If you want to learn more and work with us, contact us today.

Finally, if you found this article helpful, don’t forget to share it and subscribe to our newsletter for more useful content like this.

About the Author: 

Ventrify is a product design and manufacturing firm that helps entrepreneurs bring product ideas from concept to market. We take in fledgling ideas and bring them through our iterative design process to create products our clients can be proud of. Then, we work with manufacturing facilities worldwide to bring our clients the highest quality products at competitive prices.

If you have questions about using prototypes in your product development journey or need help, reach out to us through our Website, Facebook, or LinkedIn.

Article by Victoria Fraser

When you think of product design, shipping might be the last thing on your mind. However, it’s still a crucial part of the process and can affect your profits if done poorly. One aspect of shipping and logistics is incoterms. 

Incoterms might seem confusing, but they’re actually not all that complicated. If you’re shipping a product from one location to another, then it’s crucial you understand what they are and how they work.

When it comes to freight shipping, the history is fascinating. From horses pulling carts to container ships transporting literally—tonnes—of goods, we’ve come a long way. Now, the interconnectedness of our supply chains allows us to buy all kinds of products and goods, like pineapples from Hawaii and saffron from Spain.

Logistics management is an entire field of study in itself, and many people dedicate themselves to understanding all the different stages of transportation. While we don’t expect you to be a supply chain manager, you can still benefit from understanding the overview of Incoterms when designing your products.

Fun fact: The first shipping container was only invented in 1956 by American entrepreneur Malcom McLean.

A key part of international shipping is the incoterms, which can be intimidating to a lot of people. Thankfully, we’re diving deep into the topic in today’s guide on incoterms. 

What are Incoterms? 

In the world of shipping and logistics, Incoterms is an abbreviation of the words: “International Commercial Terms.” These are the terms agreed to by the buyer and seller, which reduces confusion in the shipping process. 

They are written as three-letter abbreviated trade terms and were formally established by the International Chamber of Commerce (ICC). As a result, the logistics of international trade are simplified since they clearly communicate different aspects of cross-border trade.

In general, there are a few things major areas that incoterms address: 

  • Point of delivery: This defines the point of change of hands from seller to buyer.
  • Transportation costs: This defines who pays for whichever transportation is required.
  • Export and import formalities: This defines which party arranges for import and export formalities.
  • Insurance cost: This defines who takes charge of the insurance cost.

What are the different types of Incoterms? 

There are 11 main terms to know when it comes to Incoterms, but we’ll break them down for you. Use these to help the buyers and sellers communicate the provisions of a contract clearly. 

Here is a quick table with the different terms and what they entail:

CodeAcronymWhat’s Involved
EXWEx WorksThe seller ensures the goods are at the seller’s premises or another specific location where the buyer loads and clears the goods for export.
FCAFree CarrierThe seller delivers goods either to the carrier, a specific person at the seller’s premises, or another specific location. Any risks passed onto the buyer must be clearly stated.
FASFree Alongside ShipThe seller delivers goods alongside a vessel chosen by the buyer. The responsibility lies with buyers after goods are alongside the vessel.
FOBFree Onboard VesselWhen the seller delivers goods on-board a vessel chosen by buyers. The responsibility lies with the buyer once goods are on the vessel.
CFRCost & FreightLike FOB, except that the seller must pay for the costs and freight to deliver goods to their destination.
CIFCost, Insurance, & FreightSimilar to CFR, except the seller arranges insurance cover against the buyer’s risk of loss or damage.
CPTCarriage Paid ToThe seller must arrange the transportation of the goods to a specific destination, but doesn’t insure them.
CIPCarriage & Insurance Paid ToLike CPT, but the seller is also in charge of insuring the goods.
DAPDelivered At PlaceThe seller delivers the goods to a specific destination, after the goods have been unloaded. The seller has full control of up until the named place of destination.
DPUDelivered At Place UnloadedThe seller delivers the goods ready for unloading at the specific destination. The seller has full control up to the named place of destination.
DDPDelivered Duty PaidThe seller is in charge of all costs and risks relating to the delivery of goods to the buyer’s named place of destination, including clearing goods for export and import, paying duties and any customs formalities.

This list is also organized from the most obligation to the seller (ECW) to the least obligation to the seller (DDP). When choosing, you’ll need to carefully weigh the pros and cons of each one. 

How do I choose the right Incoterms?

With so many choices, it’s difficult to know what to choose. While there are a lot of factors to help you decide, here are some general tips to help you.

One common practice in the industry is that you should “buy” FOB and “sell” CIF. That is because there are different benefits and costs with each pricing term, especially as they relate to an importer or exporter.

All that aside, FOB (Free on Board) is, generally, the most popular Incoterm since it provides equal benefits and risks to the buyer and seller. 

If you have more experience importing goods and want full control over the process, then EXW (Ex Works) may be the way you decide to go. It does, however, mean that you take on the most risk and responsibility, so we would advise against that if you’re still learning the ropes.

When choosing the right incoterms, you want to get it right. Shipments can face all sorts of problems without the correct incoterm so it’s crucial to think carefully to decide which one is appropriate. 

For example, logistics costs could increase, affecting your profits later on. Alternatively, the buyer or seller may not be able to comply with the incoterm causing issues when you go to pick up your goods and they never arrive.

Summary

Not every business uses the same incoterm, so you have to choose based on what’s best for you. Hopefully, this guide expanded your knowledge and boosted your confidence when it comes to understanding incoterms.

At the end of the day, we recommend working with professionals who know what they’re doing so your logistics and shipping processes run smoothly. It might not be the first stage of product development, but it’s an important one!

If you found this article helpful, don’t forget to share it and subscribe to our newsletter for more useful content like this.

About the Author: 

Ventrify is a product design and manufacturing firm that helps entrepreneurs bring product ideas from concept to market. We take in fledgling ideas and bring them through our iterative design process to create products our clients can be proud of. Then, we work with manufacturing facilities worldwide to bring our clients the highest quality products at competitive prices.

If you have questions about using prototypes in your product development journey or need help, reach out to us through our Website, Facebook, or LinkedIn.

Article by Victoria Fraser

An often overlooked step in product design is packaging; yet it’s crucial. In the same way we all judge a book by its cover before reading it, we also judge a product by its packaging before using it. 

Many inventors or entrepreneurs start with the design of a product itself, but the packaging still needs to be enticing to your customers. And so today we’ll dive into the psychology of packaging design. We will also cover some classic examples to take inspiration from in recent years and decades ago.

There is a lot more to consider than just cardboard and tape. 

Different Elements of Packaging Design 

When it comes to making the packaging design decisions for your product, there is an overwhelming number of things to consider—colour, logo, font, material, and so on. While it would be nice if there was a one-size-fits-all approach, there, unfortunately, is not. 

Let’s take a quick look at some of the different factors to consider.

Colour 

Colour is a crucial part of packaging design. Many researchers and marketers have studied this for decades. In fact, according to one study the four most eye-catching colours that pique our interest subconsciously are red, yellow, green, and pink. 

Some other ways in which colour affects us is how black is considered more expensive and browns are considered more natural. 

Famed German writer, Johann Wolfgang von Goethe, even published his book on the Theory of Colour in 1810. In it, he talks about how colours can invoke certain emotions in our bodies. By appealing to people emotionally, brands can influence their customers’ purchasing decisions directly. It’s also a great way to create brand recognition. We can all recognize a can of red Coca Cola from far away. 

When thinking about colour, it’s overwhelming. Try to reflect on your company values and who you want to attract. Targeting your customer avatar is crucial when making these decisions. 

Visual Design

Products that look more aesthetically pleasing are rated as easier to use than their less attractive counterparts. This phenomenon has been noted in design since the first study discovered it in 1996. 

While this is often in regards to things like websites or user interfaces, it is still something to keep in mind when designing your packaging. People don’t want to be confused. Minimalism was even one of the top trends in 2020 for product design. Knowing this, it’s important your packaging looks appealing and is not overwhelming visually. 

Sustainability

More and more companies are incorporating more sustainable business practices—especially in packaging design. In fact, 66% of people will pay more if a product is more environmentally friendly. Millennials are also a key reason that brands want to embrace more sustainability. 

As a result, some companies have created clever packaging solutions for businesses to choose from instead of traditional plastic packaging. Take the company Bloomin as an example. They’ve designed packaging that is biodegradable and plants wildflowers where it is discarded. 

Now it’s important to be genuine in your marketing if you do this as some companies have seen this backfire and been accused of “greenwashing.” 

Greenwashing is used to describe the practice of companies launching adverts, campaigns, products etc. under the pretense that they are environmentally beneficial. But they’re often in contradiction to their environmental and sustainability record in general.”

—Ethical Consumer

Authenticity is crucial in the modern era we live in, so make sure your brand is intentional with its decisions and accurate, or else it will backfire. Not all press is good press after all. 

Copywriting 

Not only is the logo important, the writing (or copy) on your packaging is also crucial. If your writing is snazzy, then often you’ll get free advertising through amused customers who share it on social media. Using humour is just one example of a great way to stand out among the other brands. 

The writing on the packaging is also a direct connection with your customer. It’s the perfect palace to convey your voice and showcase your brand identity. We all remember those sticks of pink Dubble Bubble gum that had comics tucked inside right? Maybe you didn’t even like the gum, but you probably liked the comic. 

Of course, your writing should always be clear, but don’t be afraid to add personality if it suits your audience. In the case of the comics in the gum, it was a genius way to connect to kids at a candy store while hiding a special message under the wrapper.

Practicality

Yet another aspect to consider is how the packaging might improve the use of your products as well. Sometimes, the packaging itself can become the product! 

One you might not have noticed is that the Classico pasta sauce jars have measurements on the side of them for you to use while cooking. They also launched a social media campaign encouraging people to reuse the jars instead of simply recycling them. 

And this isn’t a new idea, brands have been doing things like this for decades. 

In the 1930s, flour companies learned that parents were using the fabric from their packaging to sew clothing for their children. Brands responded by packaging their products with more colourful and fun patterns as a result. 

Doing something clever like this is a great way to stand out among the other brands. 

Certifications

A final key aspect to include on your packaging is any certifications for your product. Depending on the products and industry, there are a variety of markings or stamps that would be required on your packaging. 

Without these, your product can’t legally be sold in some countries. For example, in the U.S.,  you need to comply with The Fair Packaging and Labeling Act (FPLA) and Uniform Packaging and Labeling Regulation (UPLR). Imported goods also have to follow certain packaging requirements like Title 19

It might seem overwhelming, but thankfully there are packaging specialists who make sure these different requirements met.

Here are the most important things often required:

  • Product Identity Declaration: This just explains what the product is and how it functions. 
  • Net Quantity Declaration: This covers the size of the production in weight if it’s liquid or solid or in a numerical quantity. 
  • Dealer’s Name and Principal Place of Business: As in most places, it’s required that the location the product was manufactured is listed. 

When it comes to Canada, there are also a few unique packaging requirements. Since the official languages are English and French, all products must have bilingual packaging to be sold across the country.

Summary

While this is just a handful of different elements to consider, there are plenty more ways to create standout packaging that appeals to your customers. At the end of the day, we recommend thinking strategically about the demographics of your customer to make sure it resonates with them.

Not every brand will have the same packaging solutions (and if they did we would all be disappointed!) Hopefully, this article opened your eyes to the ways to freshen up the look of your products once they hit the shelf.

If you found this article helpful, don’t forget to share it and follow us on social media for more useful content like this.

About the Author

Ventrify is a product design and manufacturing firm that helps entrepreneurs bring product ideas from concept to market. We take in fledgling ideas and bring them through our iterative design process to create products our clients can be proud of. Then, we work with manufacturing facilities worldwide to bring our clients the highest quality products at competitive prices.

If you have questions about using prototypes in your product development journey or need help, reach out to us through our WebsiteFacebook, or LinkedIn.

Article by Victoria Fraser

If you have wondered exactly how a product travels from a large industrial factory to your kitchen counter, then today’s blog post will help clear that up. Cell phones don’t grow on trees after all. Today we are going to dive into this process with some tangible examples that make it easy to understand. In this article, we will go over the different stops your product makes along the way and the decisions you will need to make on its journey.

First, let’s start with a little roadmap. This is a very common path your product might take after it’s been designed and is ready to make the long trip from a factory overseas to the shelves at a local shop.

Suppliers →  Manufacturer → Distributor → Retailer →  Consumers 

There are a lot of ways the supply chain can look, but today we want to focus on the supply chain in corporate businesses that involve manufacturers. We will look at what happens at each of these stops and the various paths a product takes. 

Step 1—Suppliers

Before a product is even put together, you will need supplies. The supplier provides these raw materials which are then assembled and combined in a way to make the product itself. There might also be other suppliers and stages as well, but for now let’s just clump them together as one.

Once you find a factory or manufacturer to work with, you probably won’t be involved in choosing a supplier, but it helps to see the whole picture. For example, if you are selling an umbrella, then it is made up of fabric to keep the rain off and plastic or metal to provide the structure. 

Step 2—Manufacturer

After you have made a prototype, you need to look at samples. Factories can send samples much quicker than they can  regular products because a sample isn’t meant to be sold, so there is no need for taxes or tariffs. Import and export laws are designed for large quantities of goods, so that’s why samples can get around this loophole. 

You might go through 2 or 3 revisions of the product before you are ready to place your full order. In fact, the samples are likely to be destroyed as they undergo things like testing. These tests might be performed by your own team or a third party to meet certain certification requirements. 

If we continue with the example of the umbrella, maybe the fabric wasn’t as waterproof as needed and so in testing it was destroyed as a result. Knowing that flaw, you would make the necessary changes and ask for another sample.

Here is a quick breakdown of how that might look:

Sample→ Tests & Certifications → Revisions→ More Samples → Approval → Place Order 

Luckily, because you are only ordering a handful of the product, you can get them quickly to speed up the process. After tweaking it, you’ll eventually get to place your order with the factory, which should take about a month.

Shipping & Logistics

When it comes to logistics, we’ll only be able to scratch the surface. Some people spend years studying this. Once your product is created and packaged, you have to make a decision on how to transport it. Even deciding on the packaging is a complicated process, but we will cover that in another article. 

Let’s look at the different ways to ship your product overseas. There are 2 common methods used to transport your goods, by Air Freight or Ocean Freight. Many companies might use both for different products, but what you need to know is each one has its own pros and cons. Both have to follow their own set of rules and regulations that they have to abide by.

Here is a table to compare the two:

VariablesAir FreightOcean Freight
TimeFasterSlower
CostMore ExpensiveLess Expensive
ReliabilityMore unpredictableMore predictable
DestinationsMore Options InlandMust Arrive by Port
How they ChargeBy WeightBy Volume

If you were shipping something small and light, then sending it by air might make sense. By comparison, if you are shipping a larger quantity of something bigger and heavier, then it’s preferable to send it by ocean. Obviously, there are a number of factors that will affect your decision at the end of the day.

As we recently experienced the Suez Canal Crisis, you might end up having to switch methods due to unforeseen circumstances. When shipping things internationally, not everything is in your control, so it is important to ensure you keep this in mind, especially when drafting your budget.

Customs

After it travels by sea or by air, your product will also have to go through customs when it’s crossing international borders. There are 4 basic steps that occur when the products are being imported into a country like Canada:

  1. Entry. The first thing you need to do is determine how your product comes into the country and where.
  2. Examination and valuation. Once it arrives at the border, it’s then looked at to ensure it’s legal and the value is also evaluated so that duties or tariffs can be applied. 
  3. Classification. After the cost is calculated, the product is classified and you can then find out the percentage of tax that is going to be charged.
  4. Payment and liquidation. At this stage, you will have to pay any tariffs or duties to bring it into the country. 

There are a lot of forms and paperwork at this point, so you can experience delays if things aren’t filled out correctly. As you might expect, there are people who spend years studying this and keeping up with the laws and regulations. 

Some companies even find loopholes to avoid paying certain taxes and there are plenty of humorous incidents that have been reported as a result. One Ukrainian importer found it was easier to cut their cars in half and import them as “car parts” instead of cars because the taxes were lower. They then reassembled the cars after they arrived at their destination. 

Step 3—Distributors

Now that the product has passed through customers, it will go to a distributor. At this point, it will likely go to a warehouse or a wholesaler. Let’s look at how that looks for both of those scenarios.

After everything arrives at a warehouse, you can start sending the product in 2 different ways. These are both considered examples of the order fulfillment process, which consists of receiving and processing the goods so they can be distributed to customers.

  1. In-House Fulfillment. Fulfilling the orders yourself.
  2. Outsourced Fulfillment. Hiring another company to fulfill orders.

When you ship the products yourself, it’s also referred to as Fulfillment by Merchant (FBM). Conversely, you could work with a large company like Amazon to distribute your products. Fulfillment by Amazon (FBA) is a popular option of outsourced fulfillment by many, but you should know that they will take a percentage of the sales. These types of  fulfillment centres will also charge a storage fee as they have to make space to store your product until it is sold. 

Another way to distribute your product is through a wholesaler. People sometimes use the term interchangeably with distributor; however, a wholesaler is a company that acts as an intermediary between the manufacturers and retailers. Wholesalers will buy the products from a manufacturer in bulk, then sell them to the retailers. 

There are many different types of distributors and wholesalers out there helping you get your product in the hands of your consumers. Similar to shipping, you need to weigh the costs and choose what is best for you. 

Step 4—Retailer & Consumers

Finally, after a few months of sitting in shipping containers traversing the ocean and bumbling around on trucks from warehouses to stores, the product winds up in the hands of your customers. It’s a complicated and convoluted journey, but we hope that we have demystified it for you.

While it might seem daunting, we wanted to show the whole process and the different paths a product can take on its journey after it’s designed and ready to go. You might think you can jump straight from placing the order to marketing, but there are a lot of steps after you’ve ordered your product from the factory.

If you found this article helpful, don’t forget to share it and subscribe to our newsletter for more useful content like this.

About the Author

Ventrify is a product design and manufacturing firm that helps entrepreneurs bring product ideas from concept to market. We take in fledgling ideas and bring them through our iterative design process to create products our clients are proud of. Then, we work with manufacturing facilities worldwide to bring our clients the highest quality products at competitive prices.

If you have questions or want to discuss going remote, reach out to us through our WebsiteFacebook, or LinkedIn.

Article by Victoria Fraser

If you’re an entrepreneur wondering about the product design process, your first question is probably how long does it take? There are a lot of steps between coming up with an idea and actually selling your product. After all, you need to make sales if you hope to get your money back. 

Taking your product to market is exciting, but too often many of us want to start designing it right away. That’s not where the journey actually starts and we’ll explain why. 


Phase 1: Research & Planning

Before you can begin the design phase of your product, you need to do a marketing report. This is a collection of data from different sources that will help you decide if the product idea is something worth pursuing. 

Here are just a few factors you’ll consider before knowing if you have a good idea. 

Competition

Is your product a completely new invention? Probably not. There’s nothing wrong with creating something that already exists, but you need to look at how many other companies out there are solving the same problem. In marketing, this is referred to as Points of Similarity. 

If there the market is oversaturated, you will need to ensure your product has important points of difference that will make it stand out. Not surprisingly, this is referred to as Points of Differentiation in marketing. Looking at these different things helps you position your brand in the eyes of your consumer. 

Target Audience

Who are you trying to sell your product to? Often people like to think their product is for everyone because that means you have a larger audience. This isn’t the best strategy because people won’t have a clear connection to your product. It’s better to have a focused target audience so you can market to them personally and speak the same language. 

Would you sell pens to people who work in an office the same way you sell pens to an artist who works at home? Not likely. Different target audiences will have different needs and concerns. To be the most successful, you want to focus on who your audience is and how you will market to them. 

Cost

How much will it cost to make your product? Let’s say you have an idea for an amazing new rain jacket that has a ton of features. You’re going to sell it to sailors who need the best gear for their watersports. It’s waterproof, lights up, has tons of pockets, and even a built-in life jacket! Well, that’s probably going to cost a lot more than a normal rain jacket. Is this justified enough that your target audience will buy it, or are they going to stick with what they already have for cheaper? 

After looking at all the different variables of your product idea to see if it’s viable, you’ll know what to do. Sometimes, you won’t pass phase one. That’s alright. It’s better to scratch a bad idea before investing too much time and effort into it. 

According to a study from Harvard, there are 30,000 new products designed and sold every year, but over 95% of them fail. That’s why product research is so important. Many people skip this step which can affect their success in the long run.  

Approximate Timeline: 1 – 4 weeks

Phase 2: Prototyping

Everyone loves this step, and you might have even started putting things together in your garage if you’re an inventor. At this point, you’ve decided you want to pursue your idea and create a fantastic new product. 

If you’re a small business owner, it might only be you and a small team creating the prototype. If you’re a large corporation, then there might be a whole team of developers and designers collaborating to create a new product. 

In either scenario, you’ll create the first prototype and then some iterations of it until you finalize the product. Depending on the complexity of your product, it can take a short amount of time or a longer amount of time. If there are many electronic components, then you will likely add an extra 2-4 weeks to this stage. Of course, it can take a lot longer than that, the Dyson vacuums are an example of that.

James Dyson spent 15 years perfecting his vacuums until he was satisfied.  He made over 5000 prototypes throughout the product design process. While that’s an extreme example of how long it takes to design something, it does happen.

At Ventrify, we try to do this step efficiently so you’re able to move forward quickly. Many companies can take a lot longer to do this step. 

Approximate Timeline: 1 – 8 weeks

Phase 3: Sourcing & Logistics

At this stage, you have a solid prototype and you need to start contacting factories that will take your product and scale it up. If you’re working with a company like us, we’ll have plenty of contacts in the industry that we can recommend. We will always help you find the best factory to work with.

Then, they take your product and find out how to create it on a factory line. They’ll customize their machines to create your product. At this stage, you need to make sure you have the funds to pay the factories to create your product. If not, you aren’t going to get very far. 

Often while this is going on in the background, your team is sorting out logistics and pricing as well. Many factories exist overseas in other countries. While it might seem simple to bring over your product in a shipping container and start selling it, it’s not that easy. 

With tariffs, imports fees, and taxes on certain types of products, this can get complicated quickly. Even importing something as simple as shoes has its drawbacks. Because of that, you might decide to change certain aspects of your product. Many companies have found creative solutions to address issues like this. 

Have you ever wondered why Converse shoes have a thin layer of felt on the bottom? It wears off after a few weeks outside and you can’t see it while walking, so the felt serves no practical or aesthetic function. Converse does this actually because of taxes. By adding a small amount of fabric, the sneakers are technically categorized as slippers. At some point in the design process, the brand discovered that slippers have lower import tax than shoes, so they added felt as a workaround. 

Approximate Timeline: ~ 4 months 

Phase 4: Production

After you’ve chosen a manufacturer to create your product, you have to wait for it to be produced. Now, you might think that a large project takes longer than a small project, but in our experience, the amount of product you order doesn’t affect the timeline as much as you think it does.

If you think about it from the manufacturer’s point of view, they have to change all their machines each time they create a new product. Regardless of producing 1000 or 10,000 copies of your product, the set-up time is likely to be the same. 

For a larger project, the manufacturer might start on your project sooner to get it done quickly as they’ll make more money. For a smaller project, you might be added to the queue until a day when they have time to do small batches all at once. 

This step can get messy for various reasons: 

  1. Laws & Random Factors—This is often outside your control. With Covid-19 we have seen a lot of disruption in the shipping industry, not to mention the Suez Canal incident which cost an estimated $400 million per hour in goods delayed. 
  2. Product Certification—You can’t sell your products until they pass certain testing and certification requirements which also add time to this step. 
  3. Customs—Some countries are a lot stricter with their customs than other countries.

This phase can be quick, but it can also last longer than you expect. You also design the actual packaging for your product and optimize it to fit in the shipping containers when you’re bringing it over. While it’s at the factory, you will still have a lot to sort out. 

Approximate Timeline: At least 6 weeks

Phase 5: Shipping & Distribution

At this point, the product has been designed, produced, and is landing in a warehouse. After it’s in the warehouse you’ll now be in contact with a distributor who will then get your product in stores or in your consumers’ hands directly. 

Once you’ve made it this far you are going to focus on selling the product and marketing. At Ventrify, we’re no longer involved anymore. You’ll be working with your distributor to make sure shipping to your customers and buyers goes smoothly. 

***

Now, to answer a complicated question, your total timeline from an idea to going to market can take anywhere from 3 to 16 months. Problems can arise as well lengthening the process even if you’ve planned it out from the start. There are a lot of decisions to be made which is why it takes so long. 

While there are a lot more steps including marketing and selling your product, we wanted to focus on the product design process itself.  

We believe in transparency and sharing practical advice to help entrepreneurs and inventors be successful. If you’re looking for more information on product design and development then make sure you’re subscribed to our newsletter.

About the Author

Ventrify is a product design and manufacturing firm that helps entrepreneurs bring product ideas from concept to market. We take in fledgling ideas and bring them through our iterative design process to create products our clients are proud of. Then, we work with manufacturing facilities worldwide to bring our clients the highest quality products at competitive prices.

If you have questions or want to discuss going remote, reach out to us through our Website, Facebook, or LinkedIn.

Article by Victoria Fraser

So you’ve got an idea for an awesome new product and you’re ready to make it into a reality. You’ve started the product design process and the prototype is looking good. Now you’re ready to start manufacturing it—or so you think. Before you can actually start selling your product, it needs to undergo testing and certification. This process is known as Product Certification and it’s important for a lot of reasons.

First, let’s look at the definition of product certification and why you need it. Then we’ll look at the different markings and how they work. It’s important to certify your products as a sign to people that it is safe, reliable, and of a certain quality. 

What is Product Certification?

Product certification is the process by which your product is tested to meet regulatory standards in a specific market or industry. For example, if you were selling a medical device, it would need to meet the minimum standards in the health industry as regulated by governments and businesses. 

Beyond that, product certification is often a requirement in particular industries where a failure could have serious consequences. Let’s go back in time to find an example of this.

If you were around in the 1980s, you probably recall that there was a string of murders involving Tylenol. Various packages were tampered with which caused a number of deaths. As a result, packaging requirements changed for over-the-counter pills. The government then passed laws to enforce “Tamper-Resistant Packaging Requirements.” That’s why over-the-counter packaging can seem a bit cumbersome today.  

Product Certification exists to prevent events like this from happening again. While that’s a noble cause in itself, there are still other reasons for your products need certification. 

Why Does Product Certification Matter?

For one, it helps your product stand out in the eyes of the consumer. Let’s say I’m choosing between two coffee brands at the supermarket. Do I want the ones that have a stamp showing they are ethically sourced and use sustainable business practices? Or do I want the ones without those certifications? There might be a taste difference, sure. However, if my primary concern is safety and sustainability, I could be willing to compromise on the flavour of my morning coffee. 

Another important reason for product certification is to indicate safety and reliability. After all, no one wants to buy something of low quality or that is dangerous. Many certifications are used to show that your product passes performance tests as well as quality assurance tests. We’ve actually been doing this for a lot longer than you think. 

In ancient Rome, archaeologists discovered ancient loaves of bread with specialized stamps on them. This was because many bakers were cutting costs on flour by adding cheap ingredients like wood shavings. Since it was a common issue, the city started inspecting bakeries. Then they used bread stamps to indicate to customers that particular baker sold bread that wasn’t full of wood shavings. In a way, we could think of those old stamps as an early kind of product certification. 

Another reason product certification matters is because governments have purchasing standards that they have to enforce. Businesses and schools will often follow in their steps and recommendations. These days, it’s perhaps easier than it should be to create low-cost products and rush them to market. Because of that, it’s as crucial as ever to ensure your product is certified to outperform your competitors. 

Finally, the last reason to have your product certified is to guard against liability. While you aren’t always obligated to have your product be certified, you still should because showing that your product is tested for safety reduces the risk of legal action. 

What are the Steps in Product Certification?

Now that you understand the importance of product certifications, here’s a quick overview of how the process generally goes. Don’t feel too overwhelmed, if you’re working with a good product development company they will guide you through this as well.

  1. Application – This involves the testing of the product and sending an application to the agency responsible for provided certification. 
  2. Evaluation – At this point, you look at the test data to see if it indicates that the product meets qualification criteria.
  3. Decision – After it’s tested, there is a second review of the product application to ensure the Evaluation is accurate. 
  4. Surveillance – Once in the marketplace, it’s important to continue monitoring your product’s performance to ensure it still meets qualification criteria, especially since it’s hard to test out every possible scenario in a lab.

Once you’ve passed these steps, your product will proudly bear the certification mark and your consumers will know it has met those standards. Now, let’s explore some of the different types of product certification out there. 

What are UL, CSA, CE, WEEE, RoHS, and FCC?

There are a lot of different markings out there and they all mean different things. Often it’s because different countries have different requirements. That said, it’s also due to other factors like the process surrounding manufacturing as you’ll read later. Let’s look at a few and see where they come from. 

UL Certification

Origin: U.S. and Canada

Acronym: Underwriter Laboratories

Explanation: This is a third-party certification company that has been around for over 100 years. Their mark indicates products are safe for workers and customers to use. Think of them as a safety organization that establishes standards for new products across various industries. For example, electronic components are often UL certified to show that they can handle safe levels of electrical current as promised. 

There are some differences in requirements in the U.S. and in Canada, sp if there is “c” on the left the product meets Canadian standards, but it might not meet American standards. 

CSA Certification

Origin: International Certification

Acronym: Canadian Standards Association

Explanation: The CSA Group is another certification company that was founded 100 years ago in Canada; however, it is now respected internationally to indicate a product’s been dependently tested and certified. It shows consumers your product meets recognized standards for safety or performance in many different countries.

Unlike the UL certification, CSA is widely regarded and respected around the world. This means you could more easily sell your product in new markets. 

CE Mark

Origin: European Union

Acronym: Conformitè Europëenne

Explanation: Since 1985, the CE mark has been used on products. It indicates a product conforms with health, safety, and environmental protection standards across different industries. It’s often a requirement for many products sold in the EU. When applying for this marking, you’ll need to be able to provide the paperwork and documents supporting that your product met the standards. 

One confusing aspect here is that it’s not an indication of quality, it’s actually just an indication that you have the supporting documents to show you met certain standards. There is no testing done by a third-party that approves the CE marking, and in some cases, you can actually certify a product yourself.

WEEE Compliance

Origin: European Union

Acronym: Waste Electrical & Electronic Equipment

Explanation: This European Community Directive was created in 2002 to combat the excessive amount of dangerous and toxic waste created by electric products in landfills. Electronic waste is extremely hazardous and difficult to dispose of, so this directive places the responsibility of reducing that waste on companies and manufacturers. 

It basically indicates your product meets the standards for the separate collection, treatment, recycling, and recovery of electronic waste. This mark safeguards human health in the long term by reducing environmental contaminants.

RoHS Compliance

Origin: European Union

Acronym: Restriction of Hazardous Substances

Explanation: Similar to the WEEE compliance, this mark indicates the compliance with restricted use of specific hazardous materials found in electrical and electronic products. The RoHS Directive imposes a set of restrictions on European manufacturers in regards to the material content of new electronic equipment placed on the market. 

Both the WEEE and RoHS compliance relate to electronic waste, but RoHS focuses on the safety of the material components in the product whereas WEEE focuses on recycling and reducing electronic waste processes surrounding a product. 

FCC Certification

Origin: US and Canada

Acronym: Federal Communications Commission

Explanation: Finally, there is FCC which is the most common certification as it is mandatory for most electronic components in order to enforce communications laws and regulations. In essence, it makes sure your product doesn’t interfere with existing communication frequencies. 

While the FCC regulates certification in the US and Canada, they are referred to EMC/EMI certifications more broadly.


Summary

Product certification can be intimidating, but it’s an important step in the process of product design and development. It can be easy to get bogged down by jargon, but the important thing to note is the common theme of safety. Many of these markings demonstrate your product is safe. For your consumers, it’s important that you meet the ethical requirements created by governments and highly respectable certification companies. 

To stand out on the shelves, your product doesn’t just have to be useful and practical, it also has to be reliable. Consumer decisions are guided by that in almost every industry you can think of, which is why this is such a fundamental aspect of product development.

Hopefully, you found this article helped demystify product certification! If you liked this blog post, don’t forget to share it and subscribe to our newsletter for more useful content like this. You can also check out our article on Prototyping in Product Development Today or 5 Common Mistakes in Product Development!

About the Author

Ventrify is a product design and manufacturing firm that helps entrepreneurs bring product ideas from concept to market. We take in fledgling ideas and bring them through our iterative design process to create products our clients can be proud of. Then, we work with manufacturing facilities worldwide to bring our clients the highest quality products at competitive prices.

If you have questions or want to discuss going remote, reach out to us through our Website, Facebook, or LinkedIn.

Article by Victoria Fraser