Recently, we changed our homepage ‘tagline’ at Plum Deluxe from “making moments matter” to Home of the Best Monthly Tea Subscription Box. With tea subscribers in 34 states and growing (literally, every time I write the number down, it goes up), it seems like our tea business has exponentially outgrown any other initiative we’ve done before.

I’ve had many business questions about it, so I’d like to share some of my biggest lessons learned nearly 9 months into this new (ad)venture.

1. Photography and descriptive positioning are key for products.

In a service business, the names of my packages never really had an effect on their success – people really just wanted knowledge of their potential outcome.  In products, the names and descriptions of the products can make/break success!  On top of that, a good photo can make a product sell; last fall we had a cool pumpkin spice tea latte photo that ended up driving us to sell out of tea three times.

2. With products, invest in product quality/design as much as you invest in your marketing/sales channels.

In my experience, spending the time and money in product quality and design has actually driven more to the bottom line than just pushing our marketing and sales channels.  We’ve spent time lowering our per-unit costs and also making our products so good people can’t help but share them – that’s made our growth go faster than we could have done just trying to master an Adwords campaign, for example.

3. Customer service is marketing.

When you’re a service provider, customer service sort of seems to come with the territory since you are likely having regular interactions with your customer – you have to show up.  In the product business, customer service is marketing.  Good customer service can make even disappointed customers refer you to others.  Good customer service can drive up retention rates and repeat business.  It’s a skill you need to perfect – moreso than social media, I think.

4. Like services, product have their own business cycles.

For the service business I provided, I always found that everyone wanted time from me at the beginning of the year, and in the fall when the weather got cold.  Summer was dead.  In the product business, we’ve gotten swept away with the overall consumer marketing cycle – for example, we made 25x our typical monthly revenue during the holiday months.  Hard to look the other way on that!    We are also looking at things like valentine’s day, mother’s day, etc.  But – products are all different.  Services can be different too (think of plumbers in below zero days versus in the summer) so it’s critical that you learn the cycle of your customers and get in sync with that.   It doesn’t do you any good to have a 4th of July promotion that you launch 3 days before (unless your customers are super last-minute folks!).

5. Subscriptions are a beautiful thing… when done right.

Our organic tea of the month club is by far our most popular offering.  And people paying you ever month automatically, sounds great, right?  Well – it is – but you need to structure it correctly so that people feel like they are getting good value, and you need systems and processes in place to support it – all of which cost money.  I talk about on this podcast how I got it wrong the first time around, and had to re-do it.  Some businesses are natural fits for subscriptions/recurring billing, but make sure you plan ahead and get lots of feedback before diving into a monthly commitment with your customers.

 6. You should pick products you know and like, or at least don’t mind spending a lot of time with.

I see so many articles saying that products like electronics have the best margins and growth opportunities so start an ecommerce site with those.  What if you don’t like electronics?  Seems like a waste of time to me.  I really have encouraged folks to go with products they know and like, or want to get to know better.  Of course, good margins and repeat buyers is important, but I think you can make it work regardless if you have a product you’re enthusiastic about.

7. Products have their own unique challenges, namely: inventory and shipping.

Having enough product but not too much is a learned skill – learn it, especially if you carry seasonal or perishable product. Shipping is expensive and a pain in the ass – don’t forget to run tests and make sure you really understand your shipping costs and know how you will ship.  These things require diligent attention.

I’m in love with a product business after 15+ years in the services biz. But it’s not all rainbows and roses.  Do you have opinions about services vs product?  Questions? Share in the comments!