I interviewed Bruce Rubin who discussed Sourcing and Product Development.
Can you provide a brief background of yourself?
Yeah. My background — I've spent over 30 in the industry working mostly for medium-sized consumer products companies, starting out in inventory management and inventory control and forecasting. Eventually, we got involved with product development, which led to global and sourcing of product and going around the world looking for new products as well as looking for new sources.
I've spent the last 10 years of so in my own consulting company, working with companies and entrepreneurs [inaudible 00:01:00] products, focusing on the consumer products that would be into the retail market, so helping my clients source product.
And then, through a network of independent salespeople, help them get the product in front of the retailers and understanding what it takes to make the supply... Once you source the product, what you need to do to maintain the supply chain so that the product can be in stock when the customer, the client, needs it.
I've got a college education, etc., and of working in a number of different areas in manufacturing from injection molding, metal working, cutting and selling, and a little bit in electronics, which allows me to help a client with any type of product that is sourced.
So that's my background. Most of the companies that I've worked for were in the $30 to $50 million sales range.
How do you get the best value enough you source products, either domestically or overseas?
What we look for and work with are people either that I've worked with myself directly for a number of years. So we've made sure that the vendors we're working with are reputable and do produce a quality product. And if the vendors that I've personally worked with do not, cannot supply the product at the right price at the right quality, then I've got a network of contacts globally that will be able to point me in the right direction.
So the best value is typically deciding on a cost, what the perceived value of the product to the... Looking at a consumer product, the value that the product needs to be sold for at retail and then working back and coming up with a target, and then seeing if that target is reasonable, and then going back and saying, "To make this kind of product at this price, can it be made and be made well?" And then working backwards with the vendor saying, "Okay. We want to make a product." Let's assume a $10-retail item should cost the original manufacturer somewhere around $3. And if we can't find... If the product, the ways it's designed, cannot be made for $3, then we either have to redesign the product or change the focus on how it gets to market.
But it's developing the right sources so that you'll end up with who can make a quality product and then work backwards into a cost that makes sense for the product and the quality you need.
I hope that answers your question.
Can you talk about the best practices when you're doing product development? And sourcing and product development, are they done together?
Well, product development, depending on the product, they are done sometimes, the product development gets done first and then you go out and get the product. But in many cases, it's done in junction with the supplier so that what you end up with is a product that can be made at a cost you need it to be made at. As an example, a number of years ago, I found a product. Actually, I was traveling in England and found a product that the company I was working for at the time, the owner had an idea that a product like this would be successful in the US. And it was not in the US at the time.
So I brought some samples back and we came up with concepts to Americanize the product, versus what was being sold in England and then worked with the vendors to come up with something that could be made at the right price. Sometimes it's done upfront. And then working with the vendors, you tweak it, or you work with the vendors to help you do product development. So it's a combination. But you cannot, in today's environment, develop a whole product internally and then say, "Here. Do it," because in some cases, if you don't design the product properly, it may not be able to be made. And that doesn't do anybody any good. So you need to have... It's got to be a partnership between the vendors and the product development team to be able to, at the end, come up with a product that can be made and made at a reasonable cost.
Do you have any final recommendations on sourcing and product development?
The one thing about product development is, if you wait until you have a "perfect" product, in many cases, you'll never get the product to market, because it's hard to say this is exactly perfect. So when you get a product to a point where it should be producible, then you go ahead and make it. And then, as you go along, you can make adjustments. But depending on...some products are relatively simple, but if you don't have, like I say, a simple one-piece metal stamping, or a simple injection molding part, that you need to get the product to a point where it's producible and then go make it and tweak it later than waiting to get it, "perfect." So product development is a process, and as soon as you're ready to make something that is saleable, make it, and then worry about fine-tuning later, not wait until you get it 100%, because in many cases, as I'm saying, you'll never get it to 100%. And you'll find the product on the market by one of your competitors.
Thanks for sharing today, Bruce.
Not a problem. My pleasure.
About Bruce Rubin
Partner at Nenko Advisors International, LLC