From Services to Physical Products

What my transition from selling a digital service to a physical product looked like.

Erick Arbe 5 minute read
March 27, 2018

I've always been in the service industry. In high school I was a bus boy at a fine dining restaurant. In college I caddied at a top 10 golf course in the world. After college I was a golf professional and taught people how to swing a golf club. I helped them to play a game - I "serviced" that person. The only thing I had to sell them was myself and my capabilities. I had to sell them trust and the promise that they might see results.

Fast forward a few years to when I started a web development company with my current business partner. We started selling websites - another service. This time the service consisted of writing code and designing pretty websites that helped our clients to look more professional on the internet. We never deliver a tangible "thing" - we deliver something you can’t touch, but you can see. A few more years go by, we gain more experience and knowledge and our depth of services has increased. We can now serve our clients with more offerings (marketing, consulting, apps, etc); but in the end, we are still selling our time in exchange for money.

If you've ever worked in the service industry, maybe as a waitress, server, ditch digger, whatever: then you understand there is a finite limit to what you can make. The more hours you put in, the more money you get out. But there are only so many hours in a day!

We also have the issue of.... clients. We all know what I'm talking about, right? If not, then let me make it clear - I'm referring to the occasional client from hell. The one who feels he has the right to call you on Saturday night because his word doc presentation for Monday doesn't look right. Or the customer at your restaurant who can't seem to find enough things to complain about during his meal. Now, don't get me wrong - working with people is great. It lets you form tremendous relationships that sometimes last a lifetime and lead to meaningful things. Client work can be a rewarding profession, yet it has it’s own unique set of challenges.

Over time these small issues made me wonder - what else is out there? What's it like to sell a product?

Enter Pillows.

My business partner and I had an opportunity to start selling a memory foam pillow. And not just any old pillow - a cooling memory foam pillow that the world had previously not seen. So we started down the path of selling an actual thing that you can touch and feel. What followed was the beginning of an adventure into the world of selling physical products.

It's always a good feeling to hand someone a "thing" and see the look of joy on their face. Or to have someone say they love the thing that you sold to them. When I hear stories of how a pillow has made a customer start sleeping so much better than they ever have before, it’s a wonderful feeling. Something that is hard to replicate in the service industry.

There's also the fun part of "making money while you sleep". A product, at least one sold via the web, can be sold at any time of day. I don't physically need to be in a store. And I don't need to personally convince someone to buy the product (that's what marketing and advertising are for). This was quite a mind shift when we started HIBR.

All the little pieces

So what’s it like selling a product? Well, first thing is you actually have to make the product. Or someone is making it for you and you’re the one selling it. Some products are simple, others are complicated. A pillow and a mattress don’t sound overly complicated, but there are still about 5-6 different components that go into each product.

All of these components need to be carefully ordered and shipped to the right place for manufacturing. In our pillow alone, we have a cover (which consists of fabric and a zipper - two separate suppliers), then you have the “sock” that goes around the foam (a separate company from the foam manufacturer), then you have the box company and finally the company that makes the product instructions insert. That's a grand total of 6 different suppliers to produce one single product.

Then you have fulfillment. Someone actually needs to put a label on your product and ship it once the order has been placed.

Lessons Learned

So what have we learned by making the shift from selling a service to selling a product? The service industry has it's challenges: getting clients, maintaining high levels of service, and the limitations of scaling your service. Yet so does the product industry: acquiring new customers, keeping your supply chain in check, and dealing with customer returns and unhappy customers. The transition from one to the other is a learning experience. Each situation is unique and mine was no exception. The end result is a greater appreciation for both industries and broader view of what it takes to run both. If nothing else, before you dive into either do your homework and your due diligence. It will pay off in the end.