1/5th Rule For Manufacturing

0:01 hey guys welcome back we’ve done two podcasts this is our third back for more
0:07 yay guys thank you so much and welcome everybody to before you tank
0:13 survive in the industry that sucks with the new motto that we want all
0:20 things positive to come our way you guys I’m giddy I’m so excited about this
0:25 topic right I’ve been so excited for a week I’m sitting here so psyched and I’m
0:31 holding Dynamite because it is going to blow your boat you guys and I do apologize because
0:37 you know I do get over hyper but excited but this is so big so we told you last time we got together how to work
0:44 non-linear how to do all the functions together again we’re going to design it we’re going to get feedback
0:51 and then we’re going to patent the correct item that we designed that found feedback for and whatever so we’re
0:56 really excited and I am the queen of fake until you make it and we went into all that so I love that
1:02 but this rule is what’s going to make really solid decisions so I love to make
1:10 my decisions based on numbers in this industry for me that’s it so I work when
1:16 people hire me they pay me a down payment and then I get 10 of what I make them so I’m all about how do I make my
1:22 10 huge and so obviously we’re looking at your product in a way that’s going to
1:28 make huge success and so this one-fifth rule which is what I made up you guys I
1:35 don’t know what they really call it in the real world it is the game changer it is truly the reason you will succeed or you won’t
1:43 or how you’ll get a licensing deal or you won’t and this is and I know Keith will tell you the same thing it doesn’t
1:49 matter if you’re selling online or if you’re selling it through a retail store one fifth rule applies but what
1:57 do all of that you can fake all that but all when I say fake it you can gather all that information and have a an
2:06 answer to know whether or not you should run like heck or you should follow through with your product so drum roll
2:15 all right you guys the one-fifth rule I’m so the one-fifth rule is this when you have
2:24 a product you have this hot new product and you know that it is going to retail
2:29 for a hundred dollars when and we’re gonna talk about how you got
2:34 to that retail in a minute but you know this thing will sell for a hundred dollars you know that you’ve asked every friend you have hopefully you’ve asked
2:41 a buyer or what would it retail for it’s a hundred dollars we know it’s a hundred bucks now we know
2:48 one-fifth of that is twenty dollars which means you have to manufacture ship
2:53 it land it delivered for twenty dollars or less that’s it that’s as simple as it
2:59 gets right so for it to reach out for 100 it has to cost twenty dollars or
3:04 less you guys and I don’t mean twenty dollars to manufacture it and then you
3:09 add five dollars for shipping and twelve dollars for tariffs and because you guys I hear this all the time so I’m
3:15 being Germanic but it’s huge it has to be done Sealed Delivered at twenty
3:20 dollars it really is and I bet if you asked 10 people about their products like hey you know what what’s your
3:26 planned margin you know what do you manufacture and deliver for if this is your if it’s 100 price point I bet you
3:32 get 10 different answers right everybody’s got a different understanding of well it needs to be this or that but I’m shocked and I know
3:39 Pawan’s going to tell us this go ahead tell us what you what’s the big question that you ask when I come with my new
3:46 product to you how much you want to sell it for exactly so that you can build it
3:52 yeah because if I it’s like my favorite term why how much you if you
3:58 don’t know how much you want to get that product on the Shelf I’m not gonna design it because I can
4:04 design this thing for two dollars I can design this thing for 200 with all the
4:11 things but how much you’re actually going to sell it for right so I think that’s a very important question for any
4:17 product developer if he doesn’t ask you that how much a product is going to sell for you really need to discuss that or
4:24 you really need to look for something else because as a product developer it’s very important for me to develop for the cost
4:32 and and that’s something that is so important because that’s that’s a cost that you can you do have a lever for
4:37 right like you could actually change that whereas if you went to somebody and you’re like hey I’d like you to change shipping rates for the entire game you
4:44 can’t change They’re Gonna Change yeah exactly you’re gonna have to deal with it but you can design it’s not only
4:51 shipping Network people don’t understand like I think you mentioned it very well everything is one fit like there is a
4:59 fees because once you send the product to like I believe that you mentioned that Amazon of the mothers like they
5:04 chart their fees separately so that that bites under your profit margin so I
5:10 think it’s like every single thing you need to be really careful so One tip is a really perfect rule to design product
5:16 it’s tough but I think it’s a really good stuff it’s so it’s so profoundly simple but I’m now gonna Define them so
5:23 we’re gonna explain it so everybody can kind of understand it better and why so
5:31 first I think the best way to address it is let’s determine what the retail is okay because I and I hear those all the
5:39 time well I would pay 100 for my product
5:45 but everybody else we only pay 29.95 I mean I’m just saying reality is that again buyer feedback is huge because a
5:52 buyer will tell you right on the Shelf but what I like to use it’s kind of what I coach my clients to
5:59 do is I like Walmart because you guys if you can get in Walmart you can’t
6:04 make that thing cheaper than Walmart right I mean Walmart has it down to a science the cool part about Walmart
6:10 though is that they take a lesser margin okay so we’ll talk about a margin in a minute so you understand what that means
6:17 but we’re going to talk about that price so I like to use my fishing pole rule
6:22 and I don’t know why I got excited about fishing pole but if you go into the fishing pole section at Walmart
6:28 you’re gonna see six of them okay and you guys there’ll be some that are the high flute and it sells for 199 dollars
6:34 and then you’re gonna see some that are sell for 29.95 right and then there’ll be some variation in between sometimes
6:41 the variation is just company brand but most of the time it has a better feature
6:46 or it’s got something added I think we all agree we understand that so we’re looking at a fishing pole and your
6:52 fishing pole has a piece of mechanics that’s added to it that the second it
6:59 hits the water the fish go I mean that’s just freaking perfect right so you know
7:04 that it’s better than anything on your shelf okay but I know that you now want to say to me
7:10 that mine’s 799 dollars because everything can but it’s not okay can we all agree that
7:16 it’s not because your value of your incredibly incredible piece is not
7:23 relevant to non-excited non-emotional purchasing right so in real life it’s
7:28 199 for the last great thing you might be 249. right do we all agree we’re kind
7:34 of you’re going to be a little bit better unless you’re like a Chanel you guys are not saying that you can’t do high-end but let’s ask Chanel what they
7:41 spend on marketing okay how much do they spend to Brand their products so they spend you guys are kind of making a joke
7:48 but the point being is you’re going to spend it somewhere so you want to put a product on the Shelf that’s going to be
7:53 valued at what somebody truly truly will pay for it okay so I like Walmart cheapest products on the planet they
8:00 have low margins so let’s talk margin so when I say a margin is when you guys when you sell a product
8:07 to an average let’s say a ma pa Boutique you’re downtown most retail little
8:14 locations they Mark your product up 100 for a 50 margin so that means that if you
8:22 sell it to them for fifty dollars they’re going to sell it to the retailer for a hundred okay so now you’ve sold it
8:29 for 50. that’s your wholesale price well what if your cost was 50.
8:34 you have no profit so that is why we’re still happy because we’re at 20 and now
8:41 you have thirty dollars to make so that is what we call margins some
8:48 which Keith is going to tell us people think that you don’t when you sell wholesale on an average I can get from
8:55 retailers anywhere from 42 to 62 percent so you guys if your margin is 62 percent
9:01 my 55 and I can’t do the math right now the 50 just went down to 42 but you’re still at 20. so you’re still making
9:08 money Keith what is it on Amazon oh man so that’s that’s the interesting thing
9:14 that I run across a lot of times everybody’s like well I can’t get my cost down I’m just going to sell it online
9:19 which is which is great in a sense that you know you don’t have that wholesale step in the middle sure but
9:27 what you do have to consider is yeah but what are the channels you’re using Amazon’s a perfect one and your payment
9:33 processing right everybody takes a cut Amazon can be I mean there are some people that are losing 40 of their
9:40 revenue to Amazon I’ve heard 42 to 60 too crazy others are doing a little bit better it’s it’s a lot of details right
9:46 a lot of buyers and sellers on Amazon will tell you like it’s great because of all the exposure but you know
9:54 it really cuts into that it’s just like selling wholesale right even if you didn’t then there’s okay well I’m just
10:01 gonna sell it Direct that’s awesome now you get to keep the margin but you also have to Market to get in front of
10:06 everyone who you want to sell it to so you have this cost of okay now I’m managing inventory and now I’m marketing
10:13 and I’m building you know a huge audience and what are they spending for ads buys oh man I mean it your
10:20 pricing is just you know going up and up and up right exactly every platform gets more expensive so you know what used to
10:27 be you know a two dollar ad on Google is now an eight dollar ad on Google so it’s
10:32 just really interesting especially if you’re in a competitive market right we talked about earlier making products
10:38 that are a little bit better than they were before right well you know who your competition is right but they’re they’re
10:43 established they’re probably running ads right so now you got to compete with them oh yeah yeah right so so what we’re
10:51 saying you guys is this hundred dollars it doesn’t matter whether you take it online on Amazon or you take it into a
10:58 retail store you are paying you’re getting Wholesale in reality for this product so now I want to tell you about
11:05 something that shocked me the first time I did retail I’m so excited I got my product it’s going to retail for 100 we
11:12 all agree now I’m gonna wholesale it for 50 and we got to agree which sometimes that would have been 55 but I got really
11:18 lucky so I’m at 50. then they said to me okay well we can either deduct 10 percent for
11:23 your buyback or you have to buy back what doesn’t sell I’m
11:28 they’re like oh yeah we’re gonna take this huge purchase order we’re going to buy only 6 000 so you have to take back your
11:36 4 000 units or we can deduct 10 percent well of course we’re going to take five dollars
11:41 off our 50 because there’s no way in the world you guys want to set yourself up to have to buy that 4 000 units so you
11:48 automatically now just lost 10 percent then your buyer is going to go well listen what about marketing what are we
11:54 going to do about you guys marketing how much are you spending well we want to take 10 percent off so that we can make sure
11:59 that we’re marketing for you as well so now you’re down to forty dollars okay so
12:06 we’re so excited because we know you built it for 20. ship delivered every last penny is it 20. you still have
12:13 twenty dollars and I know every person out there is going damn I want to be the guy that got it wholesale and made it 50
12:19 bucks off of it but you guys understand they are building their brand they have
12:25 a lot of expense to get to that so they’ve earned that 50 off of you so let go of that because I hear that all the
12:32 time because that is not real so the reason you do one-fifth is because now you still have 20 dollars to succeed so
12:40 it can sound discouraging right when you start adding up oh all these fees and everybody takes their cut but in the
12:46 reality if you take a step back for a second and just say well now that I have this knowledge I don’t need to be
12:51 discouraged about it I can go in the right way first I can talk my product developer I’m going to nail that price
12:56 because when I get there I’m already prepared and by the way if I sell a million products at 20 bucks yeah I’m
13:03 okay with that and because the alternative is you guys
13:09 you won’t tell anything because you’re at 35 dollarsand you can so now but you’ve
13:14 spent 85, 100 000 getting to find out the one-fifth rule that we could have known
13:20 going out the gate one thing I think maybe you can explain that a little better but
13:26 to get that dollar per product for twenty dollars you already spend a lot of money before your product development
13:33 your Market say research your attorney is a fees and everything so you have that expense happen in the past so you
13:40 have to consider that’s already there so when you say making that twenty dollars per product after selling it part of
13:46 that is you recovering from your cost that happened in the past oh yeah so you’re saying what you’re trying to say
13:52 is like let’s say you guys you have this incredible product but you still have tooling so you got a hundred thousand
13:59 dollars in tooling so if you spread that over your first purchases this twenty dollars now to twenty four, twenty five
14:06 so I want to pull it back home so that we can kind of simplify it again because
14:11 we’re still at faking it till you make it because if you listen to our last podcast you will you remember all the
14:18 tips that we gave you but if you haven’t listened to it go back to understand faking it till you
14:24 make it because we taught you know how to do this without spending any money okay so we taught you to get all the way
14:30 through the phase so now when you go back to your product developer after you’ve found the right product you’ve
14:36 got your buyer feedback you’re back to your product developer with this price that you know it’s going to retail for
14:41 and you know it has to come in under 20 dollars he can tell you
14:47 it can’t be done there’s no way because your materials that you have to have and Pawan has told me this but there’s
14:55 sometimes certain materials that you’ve laid out just will not make that margin they will not happen now if
15:04 you’re product developer has asked you from the start you don’t have to go back because he already knew but he could
15:12 look at it and he’s going to say things like Pawan will tell me well let’s look at other materials can we make it out of
15:18 no instead of injection molding it can be really expensive for tooling and stuff could we do aluminum or whatever
15:25 it is and I could be saying the wrong affordability but you guys get what I’m trying to say is that now you sit down
15:31 and you develop the product with the materials that work with the right
15:37 design style that now I just want to remind you this you’re going to put in your patent okay so I just want to make
15:43 sure because remember we haven’t patented yet we’re now putting it together and he’s going to come back and give you a real life quote and if his
15:50 quote can’t make 20 and he’s like gosh Pawan I’ve worked so hard but the best I can do is 38. we’re done case is over
15:57 it’s done now if you wanna if you don’t trust Pawan and you want to use the
16:02 second developer or a third developer please do that but you haven’t spent any money so you’re just working with them
16:08 to get to the number so that you know does my product have the ability to make
16:14 profit and to scale right guys imagine you’re at that point and you’ve spent you know a
16:19 couple hundred bucks to get the materials you need to get to the folks you need you’ve made the phone calls you’ve spent your time and you get to
16:26 that point and you realize that well that’s actually great news if you confirm that that period like hey this
16:33 isn’t going to work because what if you’d already spent eighty thousand dollars on tooling and development and inventory and then you find that impact
16:40 exactly then you realize it’s only going to retail for us right and you and I have a product together where it was and
16:46 I love this product and I’m not going to share what the product is but I love the product and I came to Keith and I said
16:52 oh my God I love it I can manufacture for this price and tell me how we’re going to Brand it and get it going he
16:58 goes oh Lillian we are not going to be able to sell that product for that price and I’m like no I think I’m borderline
17:06 with my retailers but we’re not quite there and he’s like I’m just telling you perceived value is going to make this
17:12 really really really tough and I told my inventor from day one it doesn’t matter
17:18 if my buyers like it if they won’t retail it for the price that we have we have to get manufactured down he’s
17:25 already in it for hundreds of thousands of dollars and we came up with a strategy to take it to Market using
17:32 online direct because you know every bot every inventor’s answer is also a direct
17:38 and that way I’ll have all that money margin and now he’s got influencers and
17:43 even the influencer says I’m not backing that price it’s to expensive and now
17:49 we’re starting completely over and that hurts because like you said he’s in it
17:54 for a hundreds and probably years of time right imagine if you had
17:59 had that feedback early enough to be able to say I’m gonna change something now about my product or I’m gonna you
18:06 know take a different approach and so having that from the very beginning could have been life-changing in my
18:12 first month with him I knew all of that so I I want to talk about this because
18:17 this is how I put a product together and what it doesn’t matter what stage I’m at I have an incredible doctor that I’m
18:24 working with right now who’s been at it for seven years it’s about a half a million dollars and I’m still doing the
18:30 same process because we have the same problem and Pawan is helping me going I’m sorry what problem are we solving
18:36 how is this unique and so we’re pulling together so I just want to Hash this so
18:42 everybody gets it you’re gonna think of something that’s amazing you’re going to
18:47 Google it and when I say Google we’re going to Google Patent search it so
18:52 we’re going to look to see if any other patents if you want to go to the U.S patent office you can just type in US
18:58 patent office under search put what your product is and see what everything else comes up there will always be what they
19:03 call prior art download it call on an attorney and talk to him about do I have
19:09 Claims can I get it patented am I not infringing don’t spend money ask the questions and then one day we’re going
19:16 to talk about patents more specifically now that you know that you have something worth patenting and you got a
19:22 really cool idea that’s first because if you don’t you’re done right I can’t tell you how many inventions I’ve thought of
19:27 that have been done a thousand times so you’re done so now you got past that now you’re gonna go to I prefer buyer
19:34 feedback or prototyping either guys first you can make either call probably prototype because you want
19:41 to know if it can be made so now you’re going to ask Pawan can this actually be made
19:47 you don’t even have to know your feedback on the dollar amount exactly to start but you guys we know how to guess
19:54 so we can guess we talked to Pawan, Pawan says yeah I think I can actually make that happen now we’re really
20:00 excited we’re probably gonna buy a sell sheet do some kind of something cheap 55
20:05 to 100 dollars you’re gonna have a sell sheet you’re gonna send a buyers buyers are going to confirm you’re going to ask them
20:12 they don’t care to be honest I have this really cool product you know would you be kind enough to give me some feedback
20:18 do you like it do you think it would sell for this price this is what I think I say this with love
20:24 please please be honest and open and realistic when you’re sending over your
20:31 199 fishing pole yours is 249 please don’t ask if it can sell for 7.99 please
20:37 be respectful ask them what they think it will sell for do they like it do they think it will sell get your
20:42 feedback as much as you can that’s what I’m here to do if I can help in any way I will
20:48 so do that get your feedback come back and say oh my God they love it and
20:54 they want to see it in the future go back to Pawan no money spent except
20:59 for your sell sheet come back to Pawan and say listen I want to pursue now what
21:05 do you think my real cost to manufacture is and that’s the scariest question of
21:11 all I’ve gotten to the point I’ve done this for so long I will just turn I know pretty much right off the bat when I
21:17 think it’s going to retail for I’ll call Pawan and say what do I have a fighting shot What’s it gonna cost for me to get
21:23 it fixed on my prototype get it prototype and what per unit because he’ll tell me right that based on that
21:28 information I already know guys we got a fighting shot or we don’t or we come to
21:34 Keith and we go Keith this is what I’m up against okay I’m borderline you guys I say this if you’re
21:41 borderline if your product’s supposed to be 20 and it’s 25 we’ll have a
21:46 conversation if you’re something up near 30 you guys you gotta give up you gotta walk away don’t expend any
21:53 more money you have a hundred dollars in it you had a lot of fun but say you’re 25. now we can come to Keith who does
21:59 growth strategy who can help you make the right decision I might do I start at Etsy do I start at Instagram do I start
22:05 direct right am I correct on the way you would go definitely right because you gotta step back and look at that plan
22:10 and really understand okay if I don’t have a channel in retail what what are the other options right you hear a
22:17 lot of them there’s kickstarters there’s Amazon there’s all these different ways you can go and so at that point you
22:23 really start looking at what the other strategies are and your costs may be different but there still are costs and
22:28 so instead of a buyback cost well now you’ve got you know an inventory holding cost somewhere right you’ve still got to
22:34 have that inventory probably less than you think to kind of get going especially but you still have tooling do
22:40 you still have tooling to get the inventory yeah and you know you’ve got packaging because you’ve got to put in something especially if you’re shipping
22:45 it direct right you’ve got to figure that piece out you’ve got the shipping and you’ve got the marketing I think everybody wants to just instantly jump
22:52 past that and be like I’m gonna make a website everyone’s gonna come it’s like you know if I build it they will come
22:57 exactly but the reality is there’s billions of other websites out there and
23:03 so how do you get your website in front of the right people right get my product in front of the right people so there’s
23:09 all those factors to consider and the costs are going to be there no matter which way you go but if you look at the
23:15 kind of product you’re making the kind of audience that it resonates with and the kind of margins that you might be able to expect and how you position it
23:22 then you can put together a plan of which channel you should pursue first try to get growth in a meaningful way
23:27 that is not you know spending millions of dollars and then build on that growth exactly and that’s what we were saying
23:34 we’re going to have a podcast on budgeting because what I’m saying to you is that what I want everybody to get the
23:40 mind-blowing moment here is that one fifth rule if that one’s a thrill because you guys when I take a product
23:47 to be licensed that’s the first thing they do their team just looks at it and goes is it at one-fifth rule okay we can
23:53 make profit and then they determine how much profit right that’s what we’re all going to do and when you hit that but
23:59 I’m here to tell you the mind-blowing part is to run when you don’t hit those numbers do not keep forcing this round
24:06 peg into the square hole because that’s what inventors do so when my buyer feedback and I’m just going to touch on
24:12 this really fast because that kind of overlaps when my buyer feedback comes back and I tell my client they’ll go
24:18 well did you tell them this did you tell them how it works like this did you tell me how cool it is and I’m like we did
24:23 all that in the beginning when a buyer speaks you don’t resell them the exact same information you go oh my gosh thank
24:32 you for the help because when you thank them for the help and the guidance they’ll give you more which means
24:37 they’ll let you come back when the product is finished so so now you’ve got something to do so
24:42 the next step that I think we need to have a podcast on is then how do you do it when you’re when you are at the
24:48 one fifth rule and you win but I again mind-blowing you have no money but a
24:55 sell sheet maybe a hundred bucks and a new product and you now know the highest
25:01 chance of success and a two percent success industry you guys is that not even the coolest thing ever like I can’t
25:08 even tell you like I’m Gonna Save something like a lot of money I mean that’s that’s your goal please you guys
25:13 please email us please share information that you got this and you were able to do it because there is how many parties
25:20 have you been to I mean I’ve been doing this 30 years I don’t care where I’m at somebody’s an inventor and then I end up
25:26 talking to them and they’re always in it for thousands of dollars I’m gonna tell
25:32 my one great story because you know I always have one I had it I had I went to a party
25:37 I think it was a Christmas party I went to a party of course like I said I have people always sometimes I feel like
25:43 I’m a little bit of a rock star because they’ll be like come here Luanne tell them about what you do for a living because I do a weird business and I’m
25:49 there in this at this party this woman who I’ve known for a little while tells me that her son has a product that he’s been working on
25:56 for 11 years and he wants to borrow 50 000 do I have an investor for that and
26:02 of course you know we all have investors in this industry so I was like well can I take a look I’ll take a look and see
26:07 I call the son has this really cool military product so it’s really cool
26:15 and inexpensive to make I think he wanted the 50 000 because it was 35 000
26:20 for tooling to get them up and going and then he wanted the 15 000 for marketing
26:26 and I was like all right cool do you mind if I just take a look at it for a few weeks and see what I think
26:31 and so I immediately did what I do and so I grabbed it I took it to
26:37 Distributors that work with the military because I got it set up
26:43 pretty quickly you can apply to sell to the military but it takes a year or so so I said well how do I whip that so I
26:50 went to companies that distribute products to the military and I literally got lucky one was close and I went in
26:56 the front door I had gotten two on the phone that said this is really cool we would carry this for you now he still
27:01 has to Tool it and he has to make it but they were like we’re in sign us up we’ll distribute it and if you don’t know what
27:07 a distributor is we’ll talk about that I promise in another show but they are such a great way for you to get your product out I walk in a door of a
27:14 distributor locally they’re like this is the coolest thing we’ve ever seen we would do this we could sell volumes of
27:19 this I always ask what does a volume mean because you guys you’re trying to offset tooling costs so if a volume is
27:27 10 000 units and tooling can be done for 10 grand then that’s a nice exchange but if your tooling’s three hundred thousand
27:33 dollars and they’re going to carry a thousand units are you still making numbers word maybe not so we don’t have
27:39 enough tasks to go but they were like oh ten thousand to start and we probably sell to all divisions they were really
27:46 pumped I come out the door feeling pretty excited that I can help my client and I swear to you I look out and there
27:53 I’m in this like little Industrial Parkway and there’s this guy in this little warehouse and he’s just sitting there and Al is popping these plastic
28:00 things well my product is a plastic tool that uses to to help out on the military
28:05 field so I Wander over we start having a conversation this guy’s semi retired
28:11 from manufacturing and now he has his own little thing I show my little toy he goes oh my God I can make this for 60
28:18 cents now first of all I don’t know if you remember but my last guy’s quote was a dollar eighty so now I got a guy who’s
28:24 just saved him more than half he can do it for 60 cents so now I’m I could not feel worse so now I got him down to 60
28:31 cents and so he had the tooling cost was probably just about the same as the other guy I can’t remember exactly what
28:36 it was so I said to the guy listen the guy is a really great inventor he’s had this product for a little while I’ve
28:43 got three Distributors that want it and before I could finish he said oh I’d do it I’d partner with him no problem I’ll
28:50 I’ll set up the tooling I’ll provide inventory you guys where in business I now have the manufacturer the
28:58 distributors in place I can’t call my client fast enough you guys my client quit his job and gave two weeks notice
29:05 they went in business and they are now selling this product I do have to chuckle because he was like Luanne I
29:13 think I invoice him for a nominal fee and he goes oh I’ve been out this 11
29:19 years why should I pay you for three weeks worth of work and you guys can only share that story
29:25 with you guys in the audience because I laugh because we listen to these kind of
29:30 things all day long and I get it I know money’s tight and blah blah blah but it is it is those are the moments that we
29:37 vet and we go but I got 26 years experience and I did it in three weeks
29:43 and you’re living your dream I wanted two grand or something it was so quick but it was nothing it was truly nothing
29:49 but I took nothing he went on with life and he has this incredible thing so one of the topics we really have to talk
29:56 about is making those Partnerships and how to get some free prototyping close your ears pull on and
30:02 and so I just want to share those kind of stories with you because you guys he had nothing literally nothing because he
30:09 wouldn’t pay me my two grand so and he’s in business today so you guys magic like that happens a lot if you understand the
30:15 path I always talk to Keith because he always clarifies everything for me did we make
30:20 it clear did I did I make that understandable I think so I think that was good I think we leave everybody
30:26 with just kind of a clear tip on how they go apply this right what’s their next step for this
30:31 what do you think Pawan I think the main thing I will say that
30:36 really you have to be understanding your product and
30:41 be smart from this beginning yeah be smart from the beginning don’t overspend it but be smart because once if you’re
30:49 smart from the beginning your product will be perfect in the win one-fifth of rule that’s what mindset you need to keep in
30:55 the mind and then you have a lot of chances to be success I’ll build on that too because I think you hit you know really really important to really
31:01 understand your product and also understand the go to market strategy for that product right because you know we
31:07 had a different channel that you picked up on and said oh man I don’t want to go direct to the military I’m going to go
31:12 to these Distributors and so if you’re you know if you’re looking at going to Amazon going to a buyer going to a
31:18 distributor selling a direct online know which one you’re going in for still the one-fifth rule the one-fifth rule one
31:24 fifth rule but know that and then have a backup right because let’s say exactly let’s say he wanted he was like no I’m
31:30 gonna sell direct to the military he you know he spent all that time and energy but having that ability to be flexible
31:36 to shift to like okay I’ve got this backup plan Distributors they’re going to be awesome in some cases it’s okay
31:42 the distributor is not going to carry it I’m going to go through Amazon if it works but if you have those numbers in
31:47 that plan up front you can apply the one fifth rule know that you’re good if you go direct and if you work within
31:54 one-fifth rule you’re going to work well online too exactly and you’re going to know when to get out which is really cool so if I had any great tip and and
32:01 we will teach this along the way is that having been around doing this for so long I do know angles to do things for
32:07 free so a distributor is a cheap way for people to get exposure to get your
32:13 product out that you don’t have an investment you still have to provide a product but they love your product
32:18 and they’ll take a percentage and you’ll have to have a front cost so I do want us to make sure that we
32:24 keep teaching those things and if I guess I think my other big
32:30 tip if I could give people one and Pawan’s probably said it but when you go to shop for a product developer
32:37 and I know Pawan would take everyone if he could but if you shop and he’s really
32:42 competitive I can’t even get over how competitive you are but if you are shopping please please
32:49 don’t tell them up front let your product developer ask you the question what are you wanting to retail it for
32:55 because if he understands that then you’re home free because you can you guys you can make you can prototype a
33:02 product really expensive and you can prototype it really inexpensive to fit your goals
33:08 and we’ll have a whole podcast on that if they don’t ask you that question I mean please you know ask them before
33:15 you leave but leave I mean please I mean I love product developers so much
33:20 but don’t you think that’s that’s what I think I said and be smart because yeah you but I mean it goes forever anytime
33:27 you go for shopping right you look for the quality same thing with the product developer you want to make sure the
33:33 person understand the product because he’s developing it so I think it’s a valid way to
33:40 it’s a really simple way to qualify yeah and I think yeah those are
33:47 simple questions like product development should be not like just okay this is my product and develop I will
33:53 develop this thing for 200 dollars and I’ll charge you for a hundred thousand dollars
33:58 that’s not where you want to spend your money right exactly just like be smart I think that goes along with that and I
34:04 don’t want to say it’s a tricky way to know if they get it but it is an interesting way to see it because if they don’t ask you that is the criteria
34:11 when they’re going down what you want just like when you ask a manufacturer if the manufacturer doesn’t say to you what
34:16 quantities you know that he’s not legit because manufacturers it has to make sense so
34:22 that’s my tip is to let him let him ask and if they don’t then you can leave saying in the future you need to know
34:29 this it’s your money you’re spending so spend it wisely yeah exactly because I
34:34 feel like they don’t ask that then they don’t know how to make it right and all right so I think that’s it you guys I think I hope we blew your mind I
34:42 really do in my world I feel like it’s that most important thing that we could ever share
34:49 all of all of this and now I think we could go from here like crazy but I hope you guys please
34:55 for us because we come to do this we have fun we’re not we’re starting to get the hang of it but we came together to
35:02 do this because we wanted more success stories on the good things like we took
35:07 the fake it rule and we didn’t spend a dime and now we are so confident that we’re
35:13 on to something what if you had a purchase order right you went to your feedback your
35:18 buyer said oh my God we love it if you can make it happen it fits all the rules do you know how easy it would be for you to get funding I mean your world will
35:24 change so we want to hear that or we want to hear you say my wife loves me because I spent the hundred bucks and
35:30 found out the product already exists so please I’m asking you guys please
35:37 write in please share your emails someday we’re going to figure out how you can actually call and we’d love to
35:43 discuss in be fun wouldn’t it to have a real product in front of us and be able to say this is what we would do next
35:49 and I’m going to leave on that note but at my last client I took yesterday I said to him what would you
35:55 I like to I like to use Partnerships and I was like look he wants to be wild and
36:00 cool and who would you how would you who would you Market that with who would you want to bring to the table he’s like when we have a vision of Tom Cruise
36:07 because he’s it’s so fits Tom Cruise and I was like done because I you
36:12 know me that’s my challenge in the world is I love to shoot for the moon and he calls me back and he’s like are you
36:18 serious because you got her so pumped and I’m like I know it sounds crazy but my daughter’s best friend’s roommate
36:24 just spent three months doing IVs for Tom Cruise so I have an angle in so you
36:30 guys dream big but do it smart everybody agree thank you guys thank you come see
36:35 us next time