The product business model involves making and/or selling a product for a profit. You can make the product yourself or you can buy and sell the product. There are thousands of products to choose from. The appropriate product to sell is the one which has an existing effective demand. Effective demand means people are willing to pay a reasonable price for your product.
The idea is to buy low from a certain place and sell high in a different place at a different time. For example you can by kids toys from China and sell them down town in Kampala at a profit.
You can operate at different scales in the product business model. You can own a large factory or you can make cookies from your kitchen. You can have a big supermarket or you can have a small shop. You can even have an online shop where you don’t own any inventory or rent out any space.
You can also provide auxiliary services in the product service model. For example you can provide warehousing or transport services or marketing services.
The sophistication of the product can also vary. For example you can trade in simple merchandise like beans and maize but you can also sell things like electronic equipment and drugs. The higher the complexity of the product the higher the margins. The more complex product ideas need lots of specialized knowledge and require some kind of patenting. For example a new human drug will require approval from national authorities before it can be allowed on the market. You may also need specialized degrees to invent such a product.
You can create a new product using just your imagination. This idea can be brought to life through a prototype. The prototype can be tested and improved. The idea can be commercialized with the right support.
The key to success in the product business model is to make things people actually want and are willing to pay for. You can invent the most creative product on earth but if no one actually needs it, then you’ll be stuck.
The product business model is available to everyone with some bit of imagination and creativity. Since we are all creative beings, we can opt for the product business model to build wealth.