Working with a physical product can create many unexpected problems. Even companies with a lot of history in their specific markets sometimes run into problems that they could not have prevented. However, as long as you take the time to study your market and have a viable long-term plan, you should be able to avoid most of these issues. In some cases, it comes down to knowing who you can call on short notice. In others, you just need to plan ahead properly.
Supply Chain Issues
Supply chain problems can quickly block your entire production if you’re not careful. It’s important to have backup plans for most of your suppliers and other relevant partners. Make sure to study those backup plans in detail so that you don’t accidentally end up using inferior materials in your product. It’s a good idea to work with a specialist who understands the global market as well. This can help you anticipate upcoming issues and prepare for them more appropriately. Keep in mind that you won’t always be able to see every problem coming, even with the help of someone experienced. You need to be ready to take an unexpected hit.
Production Optimization
Utilizing your available resources to their full potential is important. You don’t always need to make the maximum possible investment into new resources in order to boost your production to an optimal level. Having a good understanding of your production operations and their specific requirements is important for making the most of your resources. Using modern technology like machine learning can help you analyze your current situation and figure out if you have any bottlenecks or other issues that need to be addressed. It can also help you make sure that every single resource is being utilized properly and nothing goes to waste.
Legal Obligations
Physical products tend to come with more legal obligations than digital products or services. You need to be careful with that if you don’t want to run into any tricky situations. Net Contents Control is a good example of something that surprisingly many entrepreneurs are unaware of. You can find out more in this article by Hertzler Systems. And that’s just one example – potential problems like that are lurking around every corner. You need to have competent legal assistance to ensure that you don’t run into any issues down the road.
Failing to Meet Rapidly Growing Demand
If you strike unexpected success, you might soon find your stocks dwindling and your production failing to meet the ever-growing demand. This can be a difficult situation to navigate. Ramping up production isn’t always possible on short notice, and you also don’t want to get yourself into a situation where you are stuck with a large volume of products that you can’t sell or do anything with. You need to have a plan for approaching these situations. Keeping it flexible is a good idea because you never know when some of the required conditions will not be available.
Not Diversifying
A big problem with physical products is that you only have a limited market to work with. There is a finite number of people in the world who would be interested in buying your product. If you’re making something consumable, you’re in a better position than those who produce items meant for one-time purchases. But you’re still vulnerable in this regard, because people have a finite capacity for consumption.
The bottom line is, you need to diversify as early as possible if you don’t want to eventually get stuck. Explore new product ideas and other options for getting more of your current lineup. Sometimes introducing premium services can be a good approach to this problem.
Not Adapting to Competition
If your product gets popular, it will no doubt attract hefty competition. One of the biggest mistakes you can make in this case is to become complacent and assume that you have the advantage of being first. In many cases, that advantage might actually end up working against you. Your competitors will patiently study your progress to figure out what your biggest challenges are. And then they can just launch their own version of that product in a much safer, more controlled manner. Or worse, they will identify opportunities for cutting corners and release inferior versions of your product. This can have a negative impact on your own reputation, even if you have nothing to do with those competing products. For example, if a competitor starts making their knock-off with a cheaper plastic that’s later linked to health issues, some people might start to associate those reports with your own product too.
Inventory Management
As your business grows, managing its inventory will become both more important and more challenging. At some point, you will want to work with a competent specialist exclusively focused on that. Otherwise, you will run into various problems that will drain your finances quickly. You might lose products because you don’t know where exactly they are, you may suffer from delays along your supply and production chain that end up impacting your entire operations – the list goes on.
Long-term storage is another specific issue that requires your full attention. Your products will degrade over time, and you will need an appropriate solution for dealing with this problem. This is another thing that usually comes down to good planning, but also knowing what resources are available on the current market. Storage specialists can help you identify problems and plan a good, long-term solution.
Remember what we said earlier though. Even if you do everything right, there’s still a risk that you’ll run into some of these problems sooner or later. Being prepared for that is as important as trying to prevent the problems in the first place. Utilize your resources correctly, have a backup plan for everything (where appropriate anyway), and make sure that your company doesn’t rely too much on one particular source of income. With a little bit of luck, you can easily stabilize on the market.
