November 28, 2017 at 11:18Where to go after Kickstarter: the difficulties of promoting manufacturers of niche electronics
The idea of a decentralized trading platform managed by manufacturers and in the interests of manufacturers themselves came to the CEO of Hamster Marketplace LLP, Russian entrepreneur and electronics manufacturer Denis Bulavin, when he built sales channels for his main product - the PlayPad children's tablet manufactured in Russia . While working in the niche electronics segment, he saw a demand for a platform that would allow other independent manufacturers to find their customers and expand sales without devastating struggle for a limited number of shelves and storefronts with large vendors and manufacturers of non-original goods with which they can Do not even overlap target audiences.
Finding yourself trapped in a tight (market) niche is sometimes very uncomfortable
The degree of difficulty in promoting a niche product directly depends on the state of its niche in the market:
The hardest thing in this hierarchy is the producers of a unique product, which, as a discovery or invention, creates a previously non-existent niche that is in the "primitive broth" stage, when the target audience of the product is scattered, clustered, not connected. Marketers do not have centralized tools for interacting with her, and the search for their customer begins with solving the problem of maximizing PR coverage of the very fact of the emergence of a unique product and niche. This promotion work is impossible for a manufacturer if he does not have any exceptionally powerful and unique resources.
For a fresh niche, this equation often consists of many unknowns:
Novice products are experiencing the paradox of "lemon squeeze net": a product whose idea is instantly appreciated by almost everyone, but at the same time for marketing which basic marketing tools like SEO or context do not work - simply because no one knows about the existence of the net even for people it didn’t occur to me: “I’ll look for something that I wouldn’t give when I squeeze a lemon into tea and drop bones there.”
Vendors in a young niche are also quite difficult, since their target audience, although known, is scattered in other segments (for example, the target audience of PlayPad children's tablets is a percentage of the “parents with small children” market segment). The access tools to the segment as a whole are known and work, but “catching” their share requires either manual sorting or sifting the entire segment through a “fine sieve”, which means the cost of marketing audience coverage is many, tens and hundreds of times greater than the target. This is the price of niche formation. It is heavy for most indie projects. Therefore, many manufacturers in the young niche remain local - they simply do not have the resources to “bust” or “sift” on a global scale. Nevertheless, yesterday’s invention of a loner can already today become a global product.
Such a transformation usually occurs in the following ways:
Kickstarter for the first time centrally showed the scale of invention in the world: on this site alone more than 131 thousand successfully funded projects have already been accumulated. But to the same extent they can be considered a census of losers: how many of them have become viral and global products? How many of them have at least gone beyond the limits of deliveries of a single consignment of goods to their sponsors-backers? How many of them succeeded in global marketplaces?
Entering stable sales at a major online marketplace is a transition to a new level, and many beginner vendors simply cannot afford it. Even the entrance to the largest existing electronic sales platforms is not available to all projects.
Small and beginner vendors on Amazon are waiting for:
And on AliExpress they will drown among non-original, low-quality, of the same type of goods, dozens, hundreds and thousands of flooding almost any category.
For buyers, the situation in the e-retail market translates into 35–300% markups of intermediaries for goods, a smaller choice of new manufacturers on the market, a lack of information about interesting, useful new products if their manufacturers could not leave the level of invention on Kickstarter or somewhere else .
In this market niche, between Kickstarter and Amazon, still the former limb for good ideas, the Hamster Marketplace will take its place.
At the start, the Hamster Marketplace will focus on indie electronics manufacturers (starting with DIY, exclusive handmade assemblies, the demand for which is potentially as high as the cost of promoting such a niche product) and gadgets. In the future, it is possible to expand the profile of the site due to non-electronic products, demonstrating a clear potential for growth when promoting to the Hamster Marketplace audience.
Projects “between Kickstarter and Amazon” may have different scales, but a common problem: a ceiling that they cannot overcome.
Some could not switch from a “garage startup” to a functioning production, while others did not master the entry into global markets, remaining local players.
The Hamster Marketplace will help both of them thanks to its unique concept of a decentralized global trading platform without intermediaries, managed by the manufacturers themselves, which offers something useful to both producers and customers:
Because it is a platform:
In order to finance the creation and launch of the trading platform, Hamster Marketplace LLP organizes and conducts a crowdfunding campaign through the placement of tokens.
The proceeds from the collection of funds will go to:
Being focused on the sale of indie goods, the Hamster Marketplace plans to attract customers through the most effective channels for the appropriate audience segment: readers, visitors and active users of crowdfunding sites like Kickstarter, Indiegogo and others. Attracting “warm leads” from there to the Hamster Marketplace will cost no more than $ 5.6–7 per buyer; and through its own audience of projects that hit the Hamster Marketplace. The average number of backers - users who have funded the product on Kickstarter is ~ 1,400 people per project. By moving to the Hamster Marketplace, the projects will bring their own customer base, which we will already see other interesting projects.
If you want to get more first-hand information about the Hamster Marketplace, welcome to our Russian-language channel on Telegram .
Finding yourself trapped in a tight (market) niche is sometimes very uncomfortable
What to do when you find yourself in a niche
The degree of difficulty in promoting a niche product directly depends on the state of its niche in the market:
- an established niche is open, known, the main target audience is collected in it, the tools for its coverage are known and work. Usually busy with a more or less constant set of competing manufacturers;
- the young niche is open, limitedly known, the target audience is known, but not structured, the tools for its coverage are known. The product mix is dynamic; new manufacturers constantly come with competing products;
- fresh niche - open, unknown or little known, the main target audience has not been studied, the tools for its coverage are not yet working or are not created. May be occupied by a single manufacturer whose product / invention has opened / created this niche - or by a pair of quick followers / authors of parallel inventions / discoveries.
The hardest thing in this hierarchy is the producers of a unique product, which, as a discovery or invention, creates a previously non-existent niche that is in the "primitive broth" stage, when the target audience of the product is scattered, clustered, not connected. Marketers do not have centralized tools for interacting with her, and the search for their customer begins with solving the problem of maximizing PR coverage of the very fact of the emergence of a unique product and niche. This promotion work is impossible for a manufacturer if he does not have any exceptionally powerful and unique resources.
For example, Apple did not cost anything to get the maximum coverage, which immediately allowed to pull the main target audience into a niche that arose with the invention of the iPhone. The reason for this was the unique market position obtained thanks to the success of the previous product - iPod. Even global vendors may not be able to do this, like Apple with Newton PDAs 14 years before, not to mention small independent (indie) manufacturers and “garage startups” of 1-2 people.
For a fresh niche, this equation often consists of many unknowns:
- even the target audience of the product may not be known - a lot of cases when the new invention is started to be used not by those for whom it was intended;
- unknown or outreach tools
Novice products are experiencing the paradox of "lemon squeeze net": a product whose idea is instantly appreciated by almost everyone, but at the same time for marketing which basic marketing tools like SEO or context do not work - simply because no one knows about the existence of the net even for people it didn’t occur to me: “I’ll look for something that I wouldn’t give when I squeeze a lemon into tea and drop bones there.”
Vendors in a young niche are also quite difficult, since their target audience, although known, is scattered in other segments (for example, the target audience of PlayPad children's tablets is a percentage of the “parents with small children” market segment). The access tools to the segment as a whole are known and work, but “catching” their share requires either manual sorting or sifting the entire segment through a “fine sieve”, which means the cost of marketing audience coverage is many, tens and hundreds of times greater than the target. This is the price of niche formation. It is heavy for most indie projects. Therefore, many manufacturers in the young niche remain local - they simply do not have the resources to “bust” or “sift” on a global scale. Nevertheless, yesterday’s invention of a loner can already today become a global product.
How inventions achieve global success
Such a transformation usually occurs in the following ways:
- the product has become viral. The origins of the viral promotion of almost any invention are usually followed by early followers - people who are easy-going, with whom a new product at some level has resonated so powerfully that it began to cover everyone around with waves of attention, up to covering the whole globe. For example, what happened with the Pebble watch as a result of a successful crowdfunding campaign on Kickstarter. Largely thanks to Pebble, the niche of smart watches is now confidently moving from the young to the established category.
Of course, inventions acquired a viral effect even before the Kickstarter site appeared, and even before the very concepts of “crowdfunding” or “viral effect” appeared. But the concentration of the early followers of various projects in one place - such as Kickstarter and others - gives a powerful synergistic effect that increases the chances of any project to global fame instead of total oblivion.
- the project fell into a global storefront or marketplace. In the biographical film “Joy” of 2015, the effect of the marketplace is well shown using an example of a variant of the global storefront of the time: a telemarket. The main character’s invention, a self-squeezing mop, is first defeated due to improper positioning (the first problem of a fresh niche is ignorance of the target audience), and only after the second attempt does it gain instant demand nationwide, thanks to a more successful presentation in the telemarket. As TV shops and large retail chains used to be, now the largest online marketplaces can display a homemade mop of one housewife into the foundation of a multimillion-dollar business empire with a single screen impression, placement on shelves or the main page.
- global change in market conditions. We will not consider this item because of its uncontrollability, uncontrollability and unpredictability. But it should be mentioned for completeness.
Where are the inventions that are not so lucky?
Kickstarter for the first time centrally showed the scale of invention in the world: on this site alone more than 131 thousand successfully funded projects have already been accumulated. But to the same extent they can be considered a census of losers: how many of them have become viral and global products? How many of them have at least gone beyond the limits of deliveries of a single consignment of goods to their sponsors-backers? How many of them succeeded in global marketplaces?
Entering stable sales at a major online marketplace is a transition to a new level, and many beginner vendors simply cannot afford it. Even the entrance to the largest existing electronic sales platforms is not available to all projects.
Small and beginner vendors on Amazon are waiting for:
- huge competition and a huge amount of goods;
- orientation mainly to the US market (instead of global);
- dependence on the number of positive reviews;
- the need to purchase advertising, otherwise the goods cannot be promoted.
And on AliExpress they will drown among non-original, low-quality, of the same type of goods, dozens, hundreds and thousands of flooding almost any category.
For buyers, the situation in the e-retail market translates into 35–300% markups of intermediaries for goods, a smaller choice of new manufacturers on the market, a lack of information about interesting, useful new products if their manufacturers could not leave the level of invention on Kickstarter or somewhere else .
Between Kickstarter and Amazon: where the Hamster Marketplace will take its place
In this market niche, between Kickstarter and Amazon, still the former limb for good ideas, the Hamster Marketplace will take its place.
At the start, the Hamster Marketplace will focus on indie electronics manufacturers (starting with DIY, exclusive handmade assemblies, the demand for which is potentially as high as the cost of promoting such a niche product) and gadgets. In the future, it is possible to expand the profile of the site due to non-electronic products, demonstrating a clear potential for growth when promoting to the Hamster Marketplace audience.
Marketplace as an incubator: from DIY to factory, from local market to global
Projects “between Kickstarter and Amazon” may have different scales, but a common problem: a ceiling that they cannot overcome.
Some could not switch from a “garage startup” to a functioning production, while others did not master the entry into global markets, remaining local players.
The Hamster Marketplace will help both of them thanks to its unique concept of a decentralized global trading platform without intermediaries, managed by the manufacturers themselves, which offers something useful to both producers and customers:
- the beginning and development of sales at the Hamster Marketplace will be available to small, niche and even novice manufacturers of innovative electronics and gadgets - from DIY to small factories;
- and customers will have access to unique products that they would never have found in the chaos of other marketplaces; at prices really from the manufacturer with the minimum margin possible for life and development of the platform itself.
Four Elephants of Success: Why We Believe in the Hamster Marketplace
Because it is a platform:
- Exclusive niche products i.e. working to expand the range of new ideas and proposals, but preventing it from clogging with the same type of hackneyed goods and all kinds of clones on the one hand;
- The platform, thanks to its specialization, attracting the right target audience, expanding the community of early project followers;
- Working on a non-profit basis, that is, costing vendors is cheaper than any other market place, at least the size of the margin laid down by the owners of the market place;
- It occupies a niche from which large marketplaces have already irretrievably grown.
Hamster Marketplace Fundraising
In order to finance the creation and launch of the trading platform, Hamster Marketplace LLP organizes and conducts a crowdfunding campaign through the placement of tokens.
The proceeds from the collection of funds will go to:
- launch and development of the Hamster Marketplace IT platform in the form of a website and mobile applications;
- Attraction of vendors of innovative electronics and gadgets;
- attracting buyers interested in purchasing unique products.
Being focused on the sale of indie goods, the Hamster Marketplace plans to attract customers through the most effective channels for the appropriate audience segment: readers, visitors and active users of crowdfunding sites like Kickstarter, Indiegogo and others. Attracting “warm leads” from there to the Hamster Marketplace will cost no more than $ 5.6–7 per buyer; and through its own audience of projects that hit the Hamster Marketplace. The average number of backers - users who have funded the product on Kickstarter is ~ 1,400 people per project. By moving to the Hamster Marketplace, the projects will bring their own customer base, which we will already see other interesting projects.
If you want to get more first-hand information about the Hamster Marketplace, welcome to our Russian-language channel on Telegram .