Specialising In A Cluttered Market

Specialising In A Cluttered Market

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I’m the owner of a promotional products company.  Our company is different to other promotional product companies.  We only sell two products.

I’ll be honest, we stumbled in to this strategy of specialization but it has seen us grow within 3 short years from an ultra-small business of just ‘me’ to Australia’s number one supplier of small run custom paper cups and promotional banner pens.

Where It Started

Like many entrepreneurs my journey is not one that started out immediately successful.

Three years ago I was desperately trying to find a way to make money via ecommerce.  I had spent a number of years plugging away at EBay and even flew to China to source some product to sell, but for a number of reasons – none of it was really working for me.  I was getting caught with excess stock and much larger competitors willing to undercut prices to a point it just didn’t make sense to do.

I then came across drop shipping as a business model.  This looked great – no need for upfront inventory or a requirement to hold any stock.  The question was – what market do I look at to take this on?

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Promotional Products – Great Market but Way Too Many Competitors

A business associate/friend suggested I check out the promotional products industry as a version of ‘drop shipping’.  I was intrigued by the idea.  It gave me the ability to run the business online without the need for pre-purchasing stock or having any capital requirements and it meant I was targeting business customers who were spending a reasonably high amount (compared to most ecommerce products) on each purchase.  My only concern was that there were literally thousands of promotional companies already offering thousands of products.  How an earth was I going to stand out!  The last thing I wanted was to end up competing on price again against all the big guys.

I started looking on Google Analytics at the number of different searches there were for all the most popular promotional products – promotional pens, caps, t-shirts, mugs, etc. – add them all together and there were so many – but there was just as many promotional product businesses fighting for them!

Differentiate Yourself via Specialisation

Frustration was something that came upon me pretty easily at this point.  While I was busy expressing my frustration with my friend about how great a business this could be – it’s a massive market but it was completely overrun with other promotional product businesses already offering every product under the sun and there is no way for me to stand out – he simply said ‘specialise on one product and become the industry expert at it.  Don’t do what everyone else is doing.’  That intrigued me.

He advised me to find a product that was popular in the industry but one that no-one was really positioning themselves online as the expert on.  What can you specialise on and become the ‘best supplier’ of and the biggest wholesale customer of that will help drive down your costs.

I love my job

After spending as much time as I had looking at Google Analytics and grouping all the different ‘promotional product’ type searches together I could see that – some common product groups were really big, some were a good size and others were tiny.

What I Looked For

I knew that the first things I’d need to work out were:

  1. Is the market big enough? Look to see if there enough Google searches for a group of common keywords that make it a large enough market to go after.
  2. Is it a competitive market? Look at who is found on the front page of Google for these search terms and determine how competitive their offering is.
  3. How easy would it be to claim a front page listing in Google for these keywords? For this I used Market Samurai to look at how long the competitor websites had been around and how many backlinks the website had pointing to them.
  4. Can I make any money from this? I started contacting manufacturers to determine what my wholesale costs would be and what profit margin I might make.

What I Found

It was after doing this research for about a month that I came across ‘promotional paper cups’.  It was a market dominated by manufacturers that had really bad or no online presence and traditional promotional product companies that offered promotional paper cups along with a million other products – not remotely specialized.  There wasn’t anyone in the online market who looked like an ‘industry expert’.

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We took the plunge and decided to become the best and biggest ‘promotional paper cup’ providers in Australia.

Our Business Grew

Our website – mypapercups.com.au – was all about custom paper cups and was regularly updated with fresh content, our business was focused solely on delivering promotional paper cups in to the market.  Custom paper cups were all we did.

The enquiries took a while but then they began to grow and within 12months were ranked #1 in Google in Australia for all of our targeted keywords, we became the largest supplier of small run custom paper cups and were getting the lowest wholesale buy rates available.

We had customers call and tell us that they wanted to go with our company because they could tell that we were obviously the experts.  I often wondered if their opinion would have changed if they knew at the time ‘our company’ was just me and I was taking the call from the office I had set up in our spare room.

Specialization achieved a number of things for our business:

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  1. Made us focus. All our marketing and business activities are centred around this one product – we’re not stretching ourselves across a wide range.
  2. We don’t look like all our competing promotional product companies. When people choose to deal with us they perceive they are dealing with the ‘promotional paper cups’ experts.
  3. We know more about this product – what works and what doesn’t – and we have built systems that the business runs by specifically to deliver this product to market.
  4. Our team has got very good at delivering this product and is able to go the extra mile for customers because of this.
  5. Google loves it when a website is focused on a particular topic/product.

Three years in to the MyPaperCups business and there are now a group of six of us that work on the business – and none of us are working from my spare room.

Could That Work Again?

About six months ago we started looking for way to increase the size of our promotional products business outside of custom paper cups.  We started looking for another product that we could undertake the same philosophy of ‘specialization’ on and become the ‘industry expert’ for.  We had spent the last couple of years perfecting the systems that we had implemented for MyPaperCups and believed we could replicate those systems with another product offering.

Would it work again?  Was it a fluke the first time?  Could we find another product to do it again?

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In my search I came across a promotional products business that was for sale.  It specialised in of all things – banner pens.  Banner pens are these wonderful promotional pens that have a banner in the middle of them that can be pulled out and on it you can print all sorts of different advertising or helpful resources for your customers.  It wasn’t a product that I had seen myself personally but as a product it has been in the market for some time.

The banner pen business had been running for 8 years and already had a number one ranking in Google Australia for the main keywords – banner pens and scroll pens.  The promotional pens business in Australia is huge.  The Banner Pens business in Australia however is small – too small to make it really worthwhile by itself so we had to look at how we could expand the market size.

Back to Google Analytics we went and discovered that in the USA and the UK the market was ten times the size of what it is here in Australia.  All banner pens are made and shipped from China and upon purchasing the business our strategy became to specialise in just banner pens and become the ‘industry experts’ for not just the Australian market but also the USA and UK.

We’re Underway Again

We’ve set up new websites for both the Australian and USA markets now for banner pens and are at the beginning stages of taking the business overseas.  We’ve built websites that are the most comprehensive and specialised ‘banner pens’ websites anywhere in the world that position us perfectly as the ‘banner pen experts’.  We’re now very focused on an SEO strategy for the USA market and have bought someone on full time to help us with that strategy.  We’ve had sales already in to the USA market but honestly it’ll be another 12 months before we can tell if our next ‘speciality promotional product’ will truly come to fruition the way we hope it will.  We’ll face challenges along the way no doubt but while we are focused on this niche we’re confident that we can use specialization again to help us standout.

Russell Johansen

Owner – MyPaperCups & Banner Pens

After years of treading the corporate treadmill Russell successfully started and built his own ‘Speciality Promotional Products’ company that has enabled him to now enjoys the lifestyle he’s been working towards for a number of years with his wife and two kids living near the beach on the Sunshine Coast in Australia.  Using a strategy of specialization, Russell has been able to position his businesses – MyPaperCups and Banner Pens – as the ‘experts’ in the field.