What student companies can sell
Many YE student companies find the initial task of settling on an agreed product or service idea as their first big challenge.
There are some tools to help with this process on YE Online in Milestone Three – Generating the Idea.
We recommend that you review these ahead of facilitating the process.
- lots of good ideas are suggested but individuals are committed to their own ideas or those of close friends, so reaching a consensus can be a challenge
- a popular idea is agreed upon quickly but soon shown to be non-viable (e.g. due to up-front costs, legal issues such as copyright or trademarks, competition or long lead-times) or have too many challenges (then the process needs to start again which is frustrating for the embryonic student company)
- the team think they have come up with an original idea but soon find that a similar simple product is widely available online and they have no real point of differentiation
Here are some initial questions that might help narrow down ideas for products or services:
- Are the group clear on what they cannot sell? Certain products are excluded for insurance purposes – such as food items they have made/cooked themselves, cosmetics, alcohol, electrical goods, etc.
- Are there any notable talents in the group that could be exploited? For example, artists, photographers, musicians, modellers, website developers, writers, etc
- Are the team interested in developing and delivering a service (rather than make or source products)? Service delivery can be more labour intensive but also rewarding and can be more innovative
- Are there upcoming events which could create opportunities? Christmas is an obvious one for many but also consider Valentine’s Day, Mothers’ Day, religious holidays, school productions or open days, community events, etc
- What social cause might they want to promote or help via their chosen product or service? Environmental causes are popular, e.g. via ‘up-cycling’ or products with a green or other ethical theme. Is there a particular community or special needs group they wish to help in some way? Is there perhaps a good reason to establish the student company as a social enterprise? Remember that YE student companies are not permitted to raise money for specific charities as their student company purpose
- Who might their target customers be? There is more on this later but it helps to consider the likes of fellow students, friends and family, local primary schools, etc. as possible customer groups – perhaps allowing more focus than just considering the ‘general public’
- What might the sales channels be? Again, there is more on this later but it helps to think about how and where they will sell their products or services – at school events, via YE Trade Fairs and markets, online, via business partner organisations, or perhaps a combination of these
It’s natural for students to be product-led in their early discussions but good business practice tells us that they must consider the who and the how as well as the what, ideally in parallel. Some consideration of customers and sales channels can help to unlock the debate around the core product/service.
The table below shows some common types of customer group and sales channels for YE student companies:
The students are likely to be under the age of 18 so there are strict rules about selling online. The only approved way for YE student companies to sell online and to be covered by Young Enterprise’s £10m insurance is through YE Trading Station.
YE student companies are not permitted to use alternative electronic payment such as PayPal, CashFlows or a card machine. YE student companies are not permitted to use any other online sales platforms, including eBay or Amazon, that require individuals to be aged over 18 to register.
If an individual over the age of 18 sets up an alternative sales platform or payment provision on behalf of the YE student company, then this person must be aware they will not be covered by YE insurance and that they are doing so independently from YE and that they accept the obligations that they are undertaking as individuals for any online sales or payment activity undertaken by the YE student company. They must be aware that YE will not take responsibility for using alternative payment providers. YE must be advised by the individual over the age of 18 that they are accepting the obligations by emailing [email protected]
If setting up a web-site, customers must be directed to YE Trading Station to place their order, and payments must be made offline following the provision of any invoice.
The students should be discouraged from over-stretching themselves and placing large initial orders. However, bulk discounts may make some purchases more affordable and increase the likelihood of achieving a profit margin. The students may need help in negotiating purchase prices and payment terms. Frequently, today’s internet generation will only consider online sellers, where negotiation of special terms may not be possible, rather than considering local physical suppliers. A local business may be willing to provide better prices and terms in return for some form of promotion. Most school/colleges have established suppliers for certain products who may be able to help.
Products which may have previously had high up-front costs (e.g. printing at low volumes can be prohibitively expensive) can now be delivered in much more cost effective ways (e.g. online, through eBooks or apps).
- contravene any copyright or trademark, including use of images, music, printed text, etc.
- use business, internet domain or product names which are already in use
- follow relevant Health & Safety legislation, e.g. in production methods and quality control of the final product
- YE student companies operate under a YE Product and Public liability insurance policy of £10m however they must operate within the legal and insurance guidance outlined in the Operating Framework.
- Feel able to ‘close down’ flawed ideas but help the students to see the issues for themselves rather than simply dismissing them out of hand. Ask challenging questions or use the checklist from YE Online which helps the students see the drawbacks
- Identify where the ‘added value’ is in a product or service. Buying something for £1 and selling it for £2 may generate an easy profit, but is it really enterprising? What can be done to differentiate, customise or add value to a basic product?
- Be brave and make something useful from raw (or even recycled) materials – wine racks, remote control holders, jewellery, placemats, toiletry bags, cushions, picture frames, etc
- Devise a product that will sell at Christmas but is also relevant in the New Year with perhaps just minor modifications or a change of theme
- Bundling a load of related products into a ‘kit’ can be an attractive present for a family member (e.g. a car cleaning kit, a sewing kit, a gardening kit). The trick is often to source them from different places so you take the hassle out of the purchasing for the buyer
- Recipes are a popular theme for a book since copyright rules around recipes are much looser than for other printed content. Avoid using existing images or descriptive text though and perhaps credit the originator (e.g. “inspired by…” or even “taken from….”)
- Link a product with a service (e.g. healthy eating instruction with a cook book)
- Think about simple things that are required to make modern inventions easier to use – e.g. something to stop iPod earphones tangling up, somewhere to keep memory sticks, something for locating lost phones, etc
- Have the students think about something that their parents and grandparents would really want to buy – and therefore get their friends to buy too – not just buy to help them out because they are their child or grandchild!
- Personalising your product can be a differentiator (e.g. using photos or personalising a t-shirt) but make sure you work out how to make this affordable and not too labour-intensive.
- Develop a service (or even product) with a sample of your target audience (perhaps a ‘pilot’ group) rather than developing it in full and then trying to sell it.
- Build on popular trends (e.g. baking) to help drive the demand for your product.