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What Is A 'Product'?

Products are self-contained units of economic value. To make money using Products, you must:

1. Create something that people want.
2. Produce it as inexpensively as possible while also having an acceptable quality.
3. Sell as many units as possible, at the highest price possible for the market.
4. Keep an inventory to deal with future orders.

Products can be duplicated and multiplied, and therefore scale better than other forms of value.

Josh Kaufman Explains 'Products'

A Product is a tangible form of value. To run a product-oriented business, you must:

1. Create some sort of tangible item that people want.
2. Produce that item as inexpensively as possible while maintaining an acceptable level of quality.
3. Sell as many units as possible for as high a price as the market will bear.
4. Keep enough inventory of finished product available to fulfill orders as they come in.

The Personal MBA book is a good example of a product. It had to be written, typeset, printed, bound, and shipped to bookstores in sufficient quantities before reaching readers. Leave out any of these steps and readers wouldn't be able to buy a physical copy of the book. To make money, the book must be sold for more than it cost to create, print, and distribute.

Products can be durable, like cars, computers, and vacuum cleaners. They can also be consumable: goods like apples, donuts, and prescription medications are products as well. Products don’t have to be physical—even though things like software, e-books, and MP3s don’t have a distinct physical form, they are entities that can be sold.

Providing value in Product form is valuable because Products can be Duplicated. The Personal MBA was only written once, but individual copies can be printed and delivered millions of times to readers all around the world. As a result, products tend to Scale better than other forms of value, since they can be Duplicated and/or Multiplied.

Questions About 'Products'

• Does delivering value as a product make sense for your business idea?
• If so, what do you need to plan for to make it successful?

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"Business is not financial science... it's about creating a product or service so good that people will pay for it."

Anita Roddick, entrepreneur and founder of The Body Shop

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