Great Business Ideas: Produce an Infomercial

Great Ideas for your Small Business: Produce an Infomercial

If you think marketing your product via an infomercial is a quick and easy way to make mil- lions—think again. Industry experts say only one product in twenty actually hits the big time.

Although consumers bought more than $1.5 billion worth of products via infomercials in 2000, it remains an “imprecise science,” according to Chris Ourand, spokesman for the National Infomercial Marketing Association, based in Washington, D.C. Ourand said infomercials (which first hit the airwaves in 1984 when Congress deregulated the television industry) fall into a few broad categories: health and beauty products, exercise equipment, motivational programs, and household products.

One big success on the housewares front was the Smart Mop, designed and manufactured by Santa Monica–based Smart Inventions Inc. Cofounder and president Jon Nokes, a former biology teacher from England, began selling his super-absorbent rayon mop on the county fair and home- show circuit about seven years ago.

Although retailers expressed strong interest in the mop, Nokes decided to market it directly to the public. When three established infomercial producers turned him down, he and a team of out-of-work actors and models hit the home show circuit, selling enough $29 mops to raise the $65,000 needed to shoot their first infomercial. They then bought about $15,000 worth of air time on a few stations to test consumer response. The mops took off, and in nine months they sold millions.

Nokes, who started the company in a tiny apartment and stored the mops in rented garages, said the secret of making money is to make something easy enough for an eight-year- old to use. It has to be cheap to make but have a high perceived value. In his case, the mops cost under $5 to manufacture, but they sold for six times that much (including refills) on the air.

READ:  Business and Personal Finance: Which One Is Best for Your Business?

Another surprising secret, he said, is that a truly successful infomercial sets the stage for dynamic retail sales. “We went into retail stores and during the first three months we sold one million mops a month,” he said. “The following year we sold almost four million units.”

Nokes, whose company also sells the Smart Chopper and Quick Sand easy-cleaning cat box, said he believes infomercials are a great way for entrepreneurs to introduce new household products. “It doesn’t matter how good the product is if the public doesn’t know about it,” he said. “When you have a new product, you need to educate the public.”

Tips from the National Infomercial Marketing Association

  • Do your homework. Find out what worked for successful infomercial producers.
  • Pick the right stations, market, and time to air your infomercial.
  • Offer strong money-back guarantees to boost consumer confidence.
  • Believe in your product.