Robert Kiyosaki, the author of “Rich Dad, Poor Dad“, the entrepreneur mindset classic, has a very powerful quote that we should all pay attention to. He said that if you don’t have a brand, you have a commodity.
Now you might be thinking to yourself, “What’s so bad about a commodity? After all, don’t people make millions of dollars selling corn, rice, and wheat on the market? Aren’t commodities like pork belly, beef steal and other products, multibillion-dollar industries? What is Robert Kiyosaki talking about?”
Well, here’s the problem. Sure, there are large markets for commodities and they are multi-billion dollar industries, but the problem is if you are a seller of a commodity, the only thing you can compete on is price. When people look at your pork bellies or your cattle, they don’t see a distinction. They just see a product that can be processed into other products or can be consumed directly. That’s all they can see accordingly.
The only way you could compete is whether your bushel of pork is going to be cheaper than somebody else’s. That’s how you compete. Let me tell you, competing based on price is a race to the bottom. It’s a dead end. As awesome, effective and efficient as your operations may be, believe it or not, somebody can come up with something cheaper. This happens all the time.
Producers would actually intentionally suffer a loss with one type of commodity so they can build relationships and costumes for another higher margin commodity.
Grocery stores do this all the time in the United States. Have you ever gone to a grocery store that had a Halloween cell? They would offer huge bags of chocolate candies for a dollar or something ridiculously cheap like that. Now the whole point, of course, is to get you to go to certain parts of the store where you can pick up other higher margin products. If you behave exactly the way they predicted you would act, they actually make money off of you. I know, you’re carrying around a bag of 1 dollar chocolates, how can they make money off you? It turns out that the other stuff that you bought has a higher profit margin.
That’s how the commodity game is played and it’s really depressing. Because let me tell you, I know where you’re coming from. You work hard for your money, you put in the time, you focus but there’s very little to show for. Welcome to the world of commodity marketing.
This is why you need to build a niche brand. It’s not enough to target the right niche. As important as that may be, you also have to create a unique identity in your niche. Believe it or not, niche content is pretty much like a commodity. When people go to your website and see the exact type of content that they could see from your competitors, they probably don’t want to come back. Why? They would think, “I see this stuff all the time. Why should I go to your website instead of the other sites that I already know about? These other sites are bigger brands and are better- known and are tried and proven. Why should I waste my time with your little website?” You have to answer and confront these questions otherwise, you are just going to continue to struggle.
You have to build a niche brand. There are no two ways about it. Your niche brand has a unique selling proposition. It must have nothing to do with price. It has something to do with your skills or your vision for the life of your costumes, maybe it has one thing to do with your global consciousness. Whatever it is, come up with something that people can identify with and can develop a loyalty too.
If you develop a niche brand, you can charge a lot more money. With commodities, you can’t. If you turn your content into commodities and treat them like such, don’t be surprised if you make cents on the dollar. On the other hand, if people seek you out because you are a niche brand in your industry, you can expect them to pay a premium. I hope you understand how this works because your profit margin lies on the balance.