As eCommerce becomes more and more competitive, the need for new and unique products is turning into an absolute necessity. Gone are the days of dropshipping or reselling items that other stores carry.
For years, Larry Camera has lead the way for eCommerceFuel members on how to develop, manufacture and white label unique proprietary products. He shares his experiences, what to look for in the development process and the pitfalls to avoid in a quickly evolving market.
Andrew: Today I’ve got Larry Camera, Lawrence Camera, as he’s also known as, from Brighttherapy.com on the show. Larry’s been a long time member of eCommerceFuel, has been to both of our eCommerce live events, and has a ton of experience manufacturing his own proprietary products. One of the theme from the even this year was really just the absolute necessity of having something unique that you are creating. I think the era of being able to thrive solely based on reselling items is quickly coming to an end or, at a minimum, getting infinitely more competitive in the coming years, something I’m going to be focusing on and talking about hopefully in the next six months in my own personal development and something that we’re talking a lot about in the community. Today I wanted to bring on Larry to chat about some of his experience there and also going to be bringing on in a future episode, Jeremy Toce, both of whom did great breakout sessions at eCommerceFuel live, Larry on proprietary product development, which is what we’re going to be talking about today, and Jeremy talking about how to create a proprietary product using involvement of your community. Really an iterative process with people who need it. That’s a little bit of a teaser for for a future episode, but I don’t know if two episodes is enough to merit being called a series. If it is, the worlds smallest series on proprietary product development. That being said, let’s go ahead and dive right into the discussion today with Larry Camera from Brighttherapy.com.
Larry, so I’ve got to ask, right before we started recording, you just off the cuff mentioned “I have never done a podcast, but I’ve been on Japanese TV before,” and left me hanging. What’s the story behind that.
Larry: Boy, I set myself up.
Andrew: You did.
Larry: I live in Kamakura, Japan, and if you’re down by the beach, there’s a famous surfing beach here called the Inamuragasaki and, on Google maps, it has my name in Japanese, Lawrence Camera, my full name. But to Japanese, they don’t know what that is, so this one program, they have a famous retired sumo wrestler going around looking for interesting things in my town. Kamakura is a famous town for tourists. They thought I was a camera museum. I live on a mountain, on the top of a mountain, and everybody hiked up there and knocked on my door, but it was my name. I did a little video shoot, we ended up instead going paddle boarding because we sell inflatable paddle boards, and after that wherever I walked people would stop and say “I saw you on TV” for about three to six months, the Japanese. But we never sold any more paddle boards, that was the weird part.
Andrew: Oh, shoot. Is there a link to that online we can link up to at all.
Larry: There is, it’s on YouTube. I’ll have to give you the link to that, but I think I have it on my YouTube channel.
Andrew: We will link up to that in the show because I for one want to see that.
Larry: Yeah he’s kind of a famous retired Japanese sumo personality.
Andrew: Very cool. So, Larry, of course, thanks for coming on and agreeing to do a deep dive on product design. We’re going to get into that in just a minute, but what’s the quick and dirty back story about how you got into eCommerce and what your background was before you got into the field.
Larry: Okay, well, it’s kind of an interesting storing. I guess you could call it eCommerce. I got a speeding ticket in Japan, boy, I think it was around 97 or 98, yeah, 97 or 98, and they’re not cheap, they’re like $600. I’d been building computers on my own. At that time you could throw a free ad up in the local English newspaper, so I just threw computer ads up there, and they started selling and I was able to make enough money to pay off the speeding ticket. That’s honestly how I got started, I was like “Hey, there’s something to this.” But you know, I fell into it via eBay after that. Then, eBay started our own site, it was mostly computers and electronics, and then I moved to beauty products because my father was in the healthcare industry.
Andrew: And Brighttherapy.com is your site specialized on skincare products. When did you start moving from reselling computer items to designing your own products, which is the majority of what you do today?
Larry: I got hardcore into it after the financial crisis. Before that, I was doing mostly white label products before that. I was doing it on the side, and we had a computer services company in Japan that we actually did storage engines and we had very big clients. Everything was going great, we had a big office and I don’t know how many staff at that point, maybe 20. The financial crisis hit and, man, all our contracts stopped. We coasted along for a year and we finally had to just lay everybody off and reinvent ourselves. We did hardware at that time, but the hardware business grew into software. Anyway, I was really sick of the margins, the poor margins on computers, between five and 10 percent. The beauty products is about…Sometimes it’s 10 times. That was a lot easier.
Andrew: And you mentioned you started white label, are you, on Bright Therapy, the products you make, I’m guessing you’re not doing a whole lot of that anymore.
Larry: I would say about a third of the products now are white label, but we’re moving everything over to our own design. What happened when I was selling white label products, first I did it under the company, I would test market under their brand, just to see if it would move, and then I would brand it myself. I really got into branding purely for protecting myself from other people selling the exact same product. That’s why I branded it under my name.
Andrew: So white label going forward, obviously the last year or two, tons of interest and courses and people doing whitelabel on Amazon.
Larry: It’s amazing, exponential growth.
Andrew: Is that something, do you think, is that something where…Is there still opportunity there for people to jump in? Do you think the opportunity is quickly drying up? What would you say the people…
Larry: It’s there. It’s just going to be harder and it’s going to get harder. At your event I think there was six people selling the exact same item that I sell, that I still sell.
Andrew: At our event?
Larry: You know, at the event that I spoke at.
Andrew: Oh, eCommerceFuel live?
Larry: Yeah, I showed people on Amazon…I just looked up my product and there’s six other versions of the exact same item.
Andrew: Oh, I see, okay.
Larry: So, yeah. Branding a white label product was easy, especially when I really started getting started selling on Amazon, I think we started heavily in 2012, 2013, and it was really easy then, but there’s so many people popping on with the same items. In fact, it just happened to me yesterday. I also sell toys for my son. We take professional photos and somebody just popped on our listing. It’s branded under my sons brand name Monotoy and somebody just popped on and started competing with us. It’s like “Ah,” I don’t even know…I can’t tell if that’s exactly the same product or not but that’s the one that she always have when you’re doing white label products and the toys I have are white label.
Andrew: In terms of ideas, and obviously you’re moving over into proprietary design because it’s so much harder to rip off. You had a great session at eCF live in Nashville. When we got done I was like “We’ve got to rope Larry into coming and doing this on the podcast” because I enjoyed it so much. You handed out a bunch of the products that you do make and walked through that. I would love to work through the process there and, from the outset, maybe this is a silly question, but how do you come up with ideas for things to design proprietarily? Is it classic look for pain point with products and niches that you already know? Is it just kind of they come out of the ether to you unexplainably? Do you have a process for it or is it just kind of all over the place?
Larry: You know, I wish I said I had a process, but it’s mostly just evaluated pain points. Usually a customer will come to us, especially in the skill care industry the products I sell are mainly light therapy products, and the biggest issue we had with those were people would buy them, use them for a week, put them in a drawer and forget about it. We would come up with products that people would want to use. One of the products we have is called a bright pad and it has a stand so that you don’t have to think about it. We promote it as keeping it on your desk, using it when you’re on a computer. We made it very simple to use. It was one of the pain points that we saw that our customers had that we would try to address with our new products.
Andrew: When you say light products, do you mean a beauty laser product you can use to remove fine lines or wrinkles?
Larry: Yeah, that’s exactly right. It’ll use either lasers or LEDs, and they both have what’s called monochromatic light, which is the thing that would stimulate the mitochondria, where you get the photo…There’s a bio-stimulation effect, the photo effect.
Andrew: So you get the idea, and then in terms of getting in on paper and starting to come up with a concept, sketching it up. I love them, and you talked just at the event, a lot of times you don’t have to have a CAD degree or have to know SolidWorks. You mentioned a lot of times you’ll just sketch something up on a napkin or hire someone on fiver and then send it over to a factory. Is that how most of your early renditions work out?
Larry: Yeah, it is. Actually, we’re making a new bright pad, and it really started on a napkin. We were in Hong Kong talking with the factory about a new production, because we had an old version. How we got started on the old version was we took an existing product and modified it. The old version we changed the stand and we changed the types of lights it used. Before it was white LEDs and we changed to blue and red and a certain frequency. Then we test marketed with that, because it’s very easy and cheap to do that because you don’t have to make new molds. Then, after we ran…I think we did 2,000 of those and then after they sold out we were like “Okay, there’s something here,” and we went and redesigned the whole thing. It started with just a box and the person next to me had an iPad and I said “You know, that would be a perfect size for our new product.” So we just started with a napkin, drawing boxes. Then from there I actually went and sketched it on PhotoPaint, and then we passed it on to the factory I work with, one of the factories based in Hong Kong, and then we passed it on to their designer. There was a lot of back and forth on the initial drawings because I wanted very narrow bezels and things like that which they couldn’t do in production cheaply.
Andrew: And you kind of have, of course, the benefit here. You’re in Asia, you don’t have a completely opposite time zone from your supplier. That makes it a little easier to go back and forth. One thing I’ve had a problem with, iterating on a completely custom design for a product we’re creating is just the back and forth time between samples that we get is probably six weeks because there’s just so much back and forth and we’re using an intermediary and I think by the nature of the beast it’s made me, if I was going to do it, probably from scratch, and today I would probably work with someone locally at least to iron out the prototype to iterate on it more quickly and then send it over for production in China if that made the most sense. If you weren’t in Asia, do you think you would still do that, or do you think, if you were based in America, do you think you would still iterate on the products with the Asian factories or do that more locally?
Larry: I actually…The first product that we designed, which was way back in 2006, I was working with my father then, and I was actually based in the U.S. at the time for about a year and a half. I know your frustration, but it’s so much easier now that I’m in Asia. I would try to do it locally if I could, it just makes it so much faster. What we’ve done is sometimes we will come up with all the functionality and we’ll just make it a mock out of wood or something like that. This is a good way to test one of the products that we’re currently designing. We just made it out of wood, we carved it out of wood to get the basic shape and then we realized that the angle that we wanted, the person to hold it up wasn’t actually viable, it was an uncomfortable angle, so we had to go redesign it. Just basic things like that you can do yourself. Some other products, what we did is we would take the electronic out of something else and then try to rearrange them into a different casing or the wood molding or the wood mock we made or things like that. That gives you a good idea of what can be done, but yeah, we’ve done that. We’ve had some really scary crap that we just usually photograph and then pass on to the factory. We usually go back and forth, but yeah, if you can get it locally I think proto labs is a site that can do 3D designs for you. If you can get as much as you can get done locally, it saves you a lot of trouble and delay.
Andrew: What was that called, photo labs?
Larry: Proto labs do 3D prototypes.
Andrew: Okay, protolabs.com.
Larry: Yeah, I think it’s protolabs.com.
Larry: We better check that before you put that on the website.
Andrew: We’ll vet it out and find where we can get it on. Larry, one thing we were mentioning is here in this phase, obviously you can work direct with a factory and they have different levels of sophistication and in-house abilities. You can work with an intermediary one-stop-shop that does the design, that can do the sourcing, that can farm it out to the factories for you. You’ve done both, and if you work at the factory it’s cheaper of course. If you work with an all in one shop, kind of a middleman, they can project manage and do all these things. It’s more expensive, but obviously they take care of a lot more of the details. You have both options. Most of the time do you think that the margin that you lose using a middleman is worth it in terms of the value you gain, in terms of efficiencies, their expertise, having one point of contact. All those things.
Larry: It usually is for beauty products, because if they’re sold too cheap people think they don’t work. If I was doing it for computers I’m not sure I could make a living, because it’s such a competitive industry or an iPhone case or something like that where there’s so many people offering it. It depends on the product. I wish I could say definitively which is better, but if you can work with the factory, it’s usually cheaper. The companies that we found in Hong Kong are very good. They’re very good at design and sourcing and getting stuff done quickly. They have engineers on staff and designers on staff as well that really can take your napkin sketch and change it into a viable product. I was going to add that with the…The main thing is finding the companies. A lot of people I know can’t get started because they can’t find the companies, and I usually find my companies via trade shows or I’ll find them on Alibaba. Alibaba’s a great source if you want to make products in China. What I’ll do is I’ll go to Alibaba, I’ll find somebody, and I’ll get quotes from them. Usually you ask for at least 1,000 pieces initially. Somebody that offers less usually doesn’t make the product because it’s expensive to do a production run, so they usually make at least 1,000. Some companies require 3,000. But then I’ll get pricing that way, and then from there I’ll ask them if they’re going to do any trade shows, and that’s usually where I’ll try to meet them, at the trade show. In fact, every company I work with I’ve met at a trade show. Some I’ve met in Las Vegas trade shows and some I’ve met in Hong Kong, some I’ve met in Germany at Medica. These companies usually go all over.
Andrew: Can you get a pretty good sense in just a five, 10 minute meeting between the quality of the booth, the quality of the people, and especially the quality of the product, who’s going to be a great partner and who’s not? When you look back at your track record of vetting suppliers that way, can you get a good gut sense from that or sometimes is it misleading.
Larry: Usually you can get a pretty good sense. Sometimes there’s just not that many people that have the product that you’re looking for to choose from, so you don’t have much choice. You don’t have a choice between two factories that make a product. Usually it’s the people you get along with, but in China, if you’re working in China, a lot of times there staff are being turned over quite quickly, because the economies growing and there’s inflation. In some companies, I’ve worked with like four or five different people and every year or every six months it’s somebody new that’s my point person.
Andrew: Say you’ve got the idea, you’ve made some sketches, maybe some very rough prototypes, got a factory lined up. Then you start the prototype process. Obviously it’s going to vary based on the complexity in each individual product, but just a real rough average of how many prototypes do you usually go through back and forth with the factory before you get something in your hand that you say “Okay, this is good, let’s use this for the production run.”
Larry: If you’re lucky it’s two.
Larry: Usually it’s two to three. I have a business partner by the way and we make inflatable paddle boards, his name’s Bret, and he designed a fin box and boy I think he’s got about six of them that he’s done.
Larry: So out newest version is just finished and in production, I think he’s finally happy with this one.
Andrew: From the time you get that first design til that one that second or third, fourth prototype is being finalized. Does that, before you can start that production run, safe to say you’re probably looking usually, roughly six months at a minimum?
Larry: Yeah, minimum. Realistically it’s nine months to a year. A lot of people do the Hong Kong Electronics Asia trade show or Canton Fair in April or March or May, some of the shows. They’re gearing up for Christmas. Usually that’s when people will find something they like and then they’ll ask to have it slightly changed or altered. They’ll usually go to these trade shows, find something that they like, and then have it slightly altered so it’s ready for Christmas.
Larry: Yeah, so the production usually ends by August to get it on the ships to get it to the U.S. by the second week of October.
Andrew: Once you move into production…Can you talk about a little bit some of the things that you need to watch out for in terms of quality control, tweaks on mold, looking through the very early production samples and tweaking, because I’m guessing just like the prototyping process, that first…You know, once you make the molds for the production runs, those first couple ones that come out, they’re probably not spot on, you have to tweak those before you start really ramping up volume. Is that right?
Larry: Yeah, usually the factory will make a silicon mold, and then they’ll check them but they always send them to me and I’ll double check them to make sure that everything winds up and it looks correct.
Andrew: Do you check the mold or the actual output from the mold?
Larry: I check the output of the mold. It’s a silicon mold. They’ll have a CNC machine that will make the molds essentially in silicon, so it only make one or two pieces, but it’ll be identical to the mold that they’re going to make. That way, you can actually vet if there’s any problems before you go into production. I’m dealing mainly with injection molding, injection molded products, that’s why I’m making products in China, because it’s…We’ve tried to do it in the U.S., but it’s about five times the cost to get that mold made in the U.S.
Larry: But once you’ve got the mold made then it’s the same cost to output the mold itself, the product, because it’s basically you’re buying plastic, it’s the same price in China as it is in the U.S.A.
Andrew: Larry, there’s so much work going through this whole process. From the time you come up with the idea to when you have the production version on the shelf ready to sell you’re looking, a lot of times, a year plus. So much work and investment for one product, do you have any way of trying to validate the ideas that they’re going to work before you do that? You kind of touched on briefly maybe branding an existing product and adding a few little accessories or tweaks or repositions to it. Any other strategies for trying to make sure that you minimize the chance of dumping a year of your life and a five-figure investment into something that just doesn’t work?
Larry: Basically I always look for a product similar and test market it. That how I always do it. I’m usually wrong if I think in my gut “Oh, this products going to sell,” and it usually doesn’t. The best selling products we have are all products that I didn’t think would do well, but I test marketed them and they just took off and I was like “Woah, I clearly don’t know what I’m talking about.” Then I would run with that, I would use the pain points that we, from selling that white label product to modifying it to make it a little better.
Andrew: Can you dive a little deeper there? How would you, because, again, you don’t have the exact product if you’re designing something that’s proprietary, has features a, b, and c that aren’t on the market, you don’t have that yet of course. How do you actually do that? How do you do a test market of something to validate a idea that doesn’t yet exist?
Larry: I’ll look for a product that’s very similar. I’ll test that product. An example would have been the bright pad. I found the product, I didn’t like it, but it had a stand. It looked like a vacuum cleaner head with a bunch of lights on it. I was like, “Okay, I’ll test it,” and I bought 50. Then I just threw them up on my website, because until 2013 my website was the main point of sale, but I also threw them on eBay and then eventually on Amazon, and they sold, but people would complain about the quality, the brightness wasn’t bright enough, and then the stand. So then we made…That’s when I decided “Okay, there’s something here.” I went and I bought a second run and I think we ended up buying like 200 of them and I said “Okay, there’s something here.” That’s when I went and I redesigned the bright pad, and we used and existing…another product that had a very similar shape that we were looking for and we modified that. That kept the mold cost down to about $4,000. We had to pay for molding, a change for the molding, and new motherboard designs and tweaking…and some tweakings…and some tweaks I should say. It wasn’t that expensive, because some of the products we’ve made from scratch, like our SL50, that was…I think we have about $20,000 invested in that product, because that one was purely from scratch from motherboard on up. Did I actually answer your question there?
Andrew: No, it did, absolutely. It made a lot of sense. You roll your sleeves up to a point where you are maybe calling customers who bought the product as very similar to what you were looking to iterate on and kind of dig for pain points, or do you just wait for people–
Larry: Oh, absolutely. I’ll always ask. It’s always good to ask.
Andrew: Larry, one last question for you here. There’s so much work that you put into these products when you’re creating them from scratch or at least something proprietary. Any tips for protecting your IP or your design or your brand for people looking to either rip it off and try to have it made without authorization in China or trying to maybe resell it on Amazon as counterfeits or even buying it from you and selling it cheaper on Amazon, undercutting your prices. Any thoughts on how to protect your brand once you get it up and running?
Larry: Yeah, first of all definitely trademark your brand name. That’s really easy. I use Legal Zoom because I’m just busy, but it’s so easy to trademark and I think it’s between $350-$400 to do that, but definitely trademark your brand name. Then, all your photos, it’s very easy to copyright them. You go to copyright.gov and it’s $35 and you can do a batch of photos. When we get our products, we use a professional photographer and I’ll choose usually 6-8 photos and I’ll just go register them at the copyright.gov. That’s also really easy. That way, if somebody is popping on your product or stolen your photos you can go after them, and then the trademark is the same thing. Anybody popping them onto a listing that’s not selling your real product, you can go after them that way. Those are the two easy ones. I can keep going.
Andrew: Yeah, you mentioned…One that I thought was interesting is making sure your molds that you actually put your brand name or some kind of identifying logos so that makes it harder if people somehow get a hold of those molds, then it’s harder for them to crank out a product that doesn’t have your brand on it.
Larry: Yeah, definitely get your brand name on your mold. We had, and I think I explained before, we had an issue with our thin box that it was copied in China, and they even copied our brand name, which gives us ammunition to go after anybody who uses it.
Andrew: Larry, well, awesome stuff. Thank you, first, for again doing the breakout session in Nashville and for letting me drag you back on and repeat a bunch of the same stuff live for podcast listeners. I really appreciate it, thanks man.
Larry: No, that’s my pleasure. I could keep going and really put your listeners to sleep.
Andrew: We will have to do a version 2.0 after I’m all the way through my product run and have made all the mistakes in the book and you can come give me a little more knowledge on how not to mess up.
Andrew: Awesome, thanks, Larry.
Andrew: That’s going to do it for this week. If you enjoyed the episode, make sure to check out the eCommerceFuel private forum, a vetted community exclusively for six and seven figure store owners with over 600 experienced members and thousands of monthly comments, it’s the best place online to connect with and learn from other successful store owners to help you grow your business. To learn more and apply, visit eCommerceFuel.com/forum.