2024 State of the Product Industry Report
Everyday I hear from product-based business owners who are curious about other people’s business models, their teams, their tech-stack, how much revenue they are earning and what other product business owners pay themselves.
And although we know that every business is different, it is natural to want to see behind the curtain of other brands in your industry.
But the interest stems from more than curiosity.
The physical product space has experienced major shifts the last few years. Supply chain issues, rising costs, shifts in technology and customer behavior changes have altered our business models, marketing strategies and more. Everyone has been pivoting and recalibrating trying to find their new normals.
So we decided to take an industry-wide temperature check.
925 product based businesses owners answered the call, anonymously sharing their personal business details with us for the 2024 State of the Product Industry Report.
Respondents include brand new product brands as well as established brands.
They shared details about their annual revenue, take-home pay, revenue streams, how much help they have, tech tools they can’t live without and how they are feeling about the future of business.
you’ll not only find the results of this survey interesting, but also impactful as you make decisions for your own business.
Thank you to everyone who contributed survey responses. Your generosity allow us to track trends, identify growth opportunities and better understand how product-based businesses are currently fairing in 2024.
Find a comfortable spot, grab your favorite ☕️ and enjoy this report!
-Katie Hunt
p.s. In addition to analysis, I also also provided some helpful links to resources in the report. Some are affiliate links.
p.p.s. This survey is a really good reminder that what works for one brand may not work for another. Everyone is working towards different goals, with different time, budget and energy constraints. Your path may look different than the details described here, and that’s okay. You do what works best for you.
IMPORTANT NOTE:
If you share this report or any statistics within the report, please be sure to credit Proof to Product as the source and link to https://www.prooftoproduct.com/2024survey. We want these survey results to help as many people as possible, but please do credit us appropriately when sharing. Thanks!
For press inquiries or interview requests about survey results, please contact Brittney Lynn at brittney@prooftoproduct.com.
Listen to the summary on the Proof to Product podcast:
Who Participated?
95% Product Creators. You develop, create and sell physical products that you dreamed up.
5% Product Resellers. You purchase products from other companies that you resell to others.
Where Do You Live?
Most respondents live in the United States but we had feedback from product sellers in Canada, Australia, Europe, Asia and South America.
How Long Have You Been in Business?
⇨ 50% of respondents have been in business for 6+ years with 23.4% of that segment reporting 10+ years.
⇨ 18% of participants have been in business 2 years or less.
⇨ The 3-5 year range was the largest contingency at 32%.
The pool of respondents was a balanced mix of new and established business owners.
How Many SKUs Do You Have?
Responses varied but the largest number of participants reported having 101 - 200 SKUs in their collections.
Not surprisingly, companies with 6+ years in business have larger collections, whereas younger brands had smaller collections.
I’d like to do a deeper dive comparing number of skus with revenue streams and revenue levels. Make sure you’re on our email list if you want the updated analysis.
Resources:
⇨ Podcast Episode: How & when to discontinue product with Katie Hunt
⇨ Podcast Episode: How to decide which product to manufacture next with Katie Hunt
⇨ Podcast Episode: Increase your profit margins with Katie Hunt on Product Powerhouse Podcast
⇨ Product Development Tools: Production Schedule Planner & Profitability Calculator
How many people are on your team?
Contractors
⇨ 63% have no contractors
⇨ 18.5% have 1 contractor
⇨ 10% have 2 contractors
⇨ 3% have 3 contractors
⇨ 3% have 5+ contractors
Employees
⇨ 71% of participants have no employees
⇨ 15% have 2 employees
⇨ 5% have 3 employees
⇨ 3% have 4 employees
⇨ 6% have 5+ employees
61.5% of participants are running their business alone without any support from employees or contractors.
Established brands with 6+ years of experience have the largest teams, which makes sense.
How many hours per week do you work (on average)?
⇨ 31% of respondents are working more than 41 hours per week
⇨ 25% are working 31 - 40 hours per week.
⇨ 9% are working under 10 hours per week.
People are working a lot. 56% are working more than 30 hours per week, with several reporting upwards of 60+ hours.
Given how many people are running their businesses solo, I’m not that surprised by the responses. However, friends, please take care of yourself. Working 40-60+ hour weeks consistently is not sustainable and you will burn yourself out. 🫶🏼
Noteworthy: As the years of business experience and annual revenue rose, the number of hours worked per week dropped below 40 hours per week, specifically for those who reported having employees and/or contractors.
Resources:
⇨ Podcast Episode: Scaling without employees with Beth Roszkowski
⇨ Podcast Episode: Updates on Independent Contractor guidelines with Kira LaForgia
⇨ Podcast Episode: How to have tough conversations with your team with Tatiana O’Hara
⇨ Free Workshop: Deciding what to delegate in 3 simple steps with Katie Hunt
PARTICIPANT SUMMARY:
⇨ 95% of respondents are product sellers who ideate, manufacture & sell their products.
⇨ Large majority of participants are from the United States.
⇨ Over 82% of respondents have been in business for 3+ years, 50% for 6+ years and 23.4% for 10+ years.
⇨ 61.5% of respondents are running their business alone without any support from employees or contractors.
⇨ People are working long hours.
⇨ It is unclear how many participants are working full time in their business and/or relying on their business for their only or main source of income. We know from the comments that some respondents have full-time or part-time day jobs, in addition to working in their business.
As you continue reading through this report, keep these demographics in mind.
Sales Channels:
⇨ 79% of respondents sell wholesale
⇨ 98% of respondents sell direct to consumer
⇨ 87% of respondents utilize 6 or more revenue streams
Wholesale online, retail online and retail in-person markets were ranked the three most profitable revenue streams.
Licensing, white labeling, classes and consulting were the lowest ranked revenue streams by profitability by survey respondents.
Resources:
⇨ Wholesale Audio Series: Is wholesale right for you?
⇨ Podcast Episode: Changing landscape of retail markets with Emily Chiang, Danella McKinnon & Kate Pinto
⇨ Podcast Episode: Expanding into licensing with Betsy Garcia, Bloomwolf Studio
⇨ Wholesale Coaching Program: Join the waitlist for the 44th round of Paper Camp
learn what wholesale buyers want & need from wholesale
brands
Annual Gross Revenue:
⇨ 48% report annual gross revenue less than $50k per year, with the larger segment earning less than $25k per year.
⇨ 36% bring in over six figures in annual revenue.
⇨ 3% report annual revenue over $1M
Among business owners who have been in business for 6+ years, 15% report an annual gross revenue of $50k or less.
31 businesses reported earning over $1M in annual gross revenue and all have been in business for 3+ years.
Noteworthy: Our Paper Camp Alumni had higher representation in the higher revenue brackets. For example, our alumni accounted for 63% of the brands earning $300-500k in revenue. Our alumni were less represented in the lower revenue brackets (under $50k).
Take-home Pay:
There is a direct correlation between higher gross revenue and higher take-home pay, which makes sense. In addition, as the annual gross revenue increased we saw a wider variance in terms of what people are paying themselves.
At revenue levels under $50k, most business owners are paying themselves the same amount that the business is earning.
At higher revenue levels, participants report having more money invested in team, product and tech systems. Therefore, their take-home pay varies more than younger businesses with less expenses.
For example, those reporting over $1M in annual revenue paid themselves less than $25k all the way up to $500k+, with the biggest group being $100 - 200k.
Overall, 59% of respondents are paying themselves less than $25k annually.
CLOSER LOOK AT BUSINESSES REPORTING $100K+ REVENUE:
Because I was curious, I collected all the data for participants reporting over six figures in annual revenue ($100k up to $1M+) to see how take-home pay varied.
36% of participants bring in over six figures ($100k+) in annual revenue.
Here is how their take-home pay breaks down:
⇨ 62% are paying themselves between $25k - $100k a year.
⇨ 15% are paying themselves less than $25k a year.
⇨ 15% are paying themselves $101 - 200k a year
⇨ 6% are paying themselves $201 - 300k a year
⇨ 2% are paying themselves more than $300k a year
FINANCIAL SUMMARY:
⇨ 48% of participants report annual gross revenue less than $50k per year.
⇨ 59% of respondents are paying themselves less than $25k annually.
⇨ 36% bring in over six figures in annual revenue.
⇨ 3% report annual revenue over $1M
⇨ Wholesale online, retail online and retail in-person markets were the three most profitable revenue streams.
⇨ Among the business owners who have been in business for 6+ years, 15% report an annual revenue of $50k or less.
There’s a lot more than I want to dig into with these revenue and take-home segments. For example, I want to look more deeply into how these numbers correspond to revenue streams, years in business, team size and/or product lines. Make sure you’re on our email list if you want the updated analysis.
Resource:
⇨ Podcast Episode: How to pay yourself as a business owner with Katie Hunt
⇨ Podcast Episode: Budgeting & Forecasting for Product Development with Katie Hunt
⇨ Podcast Episode: Bookkeeping strategies with Greg Higdon
Technology:
Private DOMAIN websiteS
⇨ 66% use Shopify
⇨ 14% use Squarespace
⇨ 5% use Wordpress
⇨ 5% use Wix
⇨ 7% use “Other”
⇨ 3% do not have their own website
“Other” website platforms included Showit, Big Cartel, Big Commerce, Etsy, Square and Weebly.
Noteworthy: The 3% without a website surprised me given that online retail and online wholesale ranked as the two of the most profitable revenue streams. Upon closer look, these folks are utilizing third party platforms like Faire, Etsy, Amazon and social media shopping platforms in lieu of their own website.
Third-PARTY SALES PLATFORMS
In this question, we asked participants to select all of the third party platforms they utilize for their business.
⇨ 69% sell on Faire
⇨ 50% sell on Etsy
⇨ 31% sell on Instagram / Facebook Shops
⇨ 7% sell on Amazon
⇨ 6% sell on TikTok Shop
⇨ 13% do not sell on any third party platforms
Many folks reported selling on multiple third party platforms.
Noteworthy: If you’re selling on multiple platforms, I want to encourage you to do an audit. Review your sales data for each platform and identify which platforms are delivering the highest quality clients and highest volume of sales — then focus your efforts there.
If selling on multiple platforms is working for you - great, keep going! But, sometimes we can spread ourselves too thin. And, knowing that 61.5% of respondents are working alone — I want you all to be careful about where you’re allocating your time and energy.
Utilizing too many third party platforms is an area where I commonly see brands over-extending themselves. Focus on the sales channels and sales platforms that are driving the most revenue and the highest caliber customers. 💰
EMAIL SERVICE PROVIDERS
⇨ 24% use Klaviyo
⇨ 20% use Mailchimp
⇨ 16% use Flodesk
⇨ 9% use Shopify Email
⇨ 2% use Convertkit
⇨ 1.5% use Constant Contact
⇨ .4% use Zoho One
⇨ 15% don’t do email marketing 😮😰. I’ll come back to why this is a huge opportunity in a minute!
for every $1 you spend on email marketing, you can expect an average ROI of $42.
INVENTORY MANAGEMENT SYSTEMS
⇨ 38% do not use an inventory management system
⇨ 30% use Shopify
⇨ 7% use Airtable, Google Sheets, Excel or other spreadsheets
⇨ 5% use Square
⇨ Under 2% use Crafty Base, Quickbooks Plus or Zoho One
The 9% that reported using “other” inventory management systems included a mix of Cin7, Katana, Lightspeed, Finale Inventory, Sage500, Brahmin Solutions.
Those who do not use an inventory management system spanned all levels of business, measured by years in business and annual gross revenue.
PROJECT MANAGEMENT SYSTEMS
For this question, we asked participants to select all project management tools that they are using. Respondents are using a wide range of tools and systems, as detailed in the chart below.
Many shared that they are utilizing multiple project management systems to manage workflow, data management and more.
Those who do not use a project management tools spanned all levels of business, measured by years in business and annual gross revenue.
Marketing:
We asked participants to note all marketing methods that they are utilizing in their business. The highest utilized marketing methods were reported a follows (in this order):
⇨ Instagram
⇨ Email
⇨ Facebook
⇨ Pinterest
⇨ SEO
⇨ Collaborations
Yet, when asked about #1 source for new leads the top three responses shifted to Instagram, Email and Referrals.
Noteworthy: Instagram & Email were at the top of the charts for both marketing questions. Which brings me back around to the 15% of folks who are not utilizing email marketing in their business. As a reminder, participants ranked online wholesale and online retail sales as two of the most profitable sales channels. Online sales rely heavily on digital marketing, which is largely driven by email marketing.
If you are not emailing your customers regularly, you are leaving money on the table and missing out on sales. This is an opportunity for those of you who are not currently utilizing email marketing or those that want to expand their email marketing strategy for customer retention, acquisition and sales.
Participants mentioned the following marketing methods under “other”, when asked about their #1 source of new customers:
⇨ Direct mail
⇨ Text messages
⇨ Online events
⇨ In-person marketings & events
⇨ Private Facebook groups
⇨ Press mentions
Referrals, paid ads and SEO stand out as marketing methods that are utilized by less survey participants but ranked stronger for lead generation abilities. These may be avenues to explore if you’re looking for additional layers of outreach and visibility.
Noteworthy: This is a good reminder to track your customer data and understand how and where people are finding you. Then, we can use that data when deciding where to allocate your marketing dollars and time.
For example, Facebook was not highly ranked as the #1 source for new leads and customers. But, many participants seem to be putting time, effort and energy into Facebook because it was a top 3 marketing channel.
No shade to Facebook, but if that’s not where your customers are hanging out, then let’s not spend our time there. Instead, let’s find out which platforms or methods are bringing in the most new customers and spend more time there!
Based on survey responses this is a major opportunity area for many participants.
Resources:
⇨ Podcast Episode: SMS & Email Marketing Strategies with Arianne Foulks
⇨ Podcast Episode: Utilizing Abandoned Cart Emails to Drive Sales with Katie Hunt
⇨ Podcast Episode: Market Trends for Product-based Business Owners with Jessica Totillo Coster
⇨ Podcast Episode: Using SEO for Product Forecasting & Development with Jessica Freeman
Get your products on the shelves of stores big & small!
Current Industry Challenges:
What is your current biggest struggle in the business?
Acquiring new customers was the biggest pain point that respondents are facing, followed by cash flow and project management / keeping up with everything.
Noteworthy: I was surprised to see customer retention in the middle of the pack. This could mean that survey participants already have their customer retention strategies in place OR it could be an area they are overlooking.
As I shared with our LABS members during a training on customer retention strategies, it costs 7x more to acquire a new customer than to retain a current customer. Yet less than 20% of companies focus their marketing on customer retention.
If you are not currently focused on nurturing your existing customers this is an area of opportunity.
What is your current biggest personal struggle as CEO?
When asked about their biggest struggle as a CEO, work-life balance took the top spot with 34% followed by burn-out / mental health (22%), decision fatigue (20%) and then confidence / imposter syndrome.
Noteworthy: Although it wasn’t included an option, several folks mentioned care-taking being a personal struggle in their comments. Survey respondents are primary caregivers for children, parents, partners and pets, all of which factors into their work-life balance struggle.
Resources:
⇨ Podcast Episode: Normalizing the hard stuff in business with Tammie Bennett
⇨ Podcast Episode: Task Management vs Energy Management with Ashley Brown
Future of Business:
I felt a little uncomfortable including these next two questions on the survey because I worried what the answers would be. We know that the online space is a highlight reel, showcasing the highest of highs and the lowest of lows. My intention with this section of questioning was to capture real, honest feedback and shed a light on the mindset of business owners right now.
BUSINESS GROWTH TRAJECTORY
When asked about their business growth patterns and trajectory, respondents were positive. 81% of participants are holding steady or experiencing growth. Whereas 19% state they are in decline.
⇨ 4% Rapidly Growing
⇨ 27% Growing at a good pace
⇨ 50% Steady
⇨ 17% Declining slowly
⇨ 2% Declining rapidly
NotEworthy: Of the 38 businesses that said they are rapidly growing, 58% noted wholesale sales and 42% noted retail sales as their most profitable revenue streams.
DO YOU THINK YOU WILL BE IN BUSINESS IN 5 YEARS?
⇨ 72% said yes
⇨ 2% said no
⇨ 26% said maybe
22 businesses reported that they do not think they will be in business in 5 year. Yet, 42% of this segment described their current business growth as “growing at a good pace” or “steady” and 58% stated their business is currently in decline.
⇨ 81% of participants are holding steady or experiencing growth
⇨ 72% expect to be in business in 5 years
both of which are encouraging stats.
General observations:
⇨ The money comes when your business foundations are strong. And, that can take time and patience. Established businesses (6+ years) with larger teams and diverse revenue streams skew higher in annual revenue, take-home pay and sustainable work hours.
⇨ Wholesale and retail are the anchor sales channels for product based business owners that completed this survey followed by freelance / custom work. Most brands are successfully diversifying within the retail and wholesale channels by selling online, in-person, brick & mortar and/or with sales teams.
⇨ Email marketing is an under utilized marketing method for survey participants. Online retail and online wholesale were ranked as the two of the most profitable revenue streams, both of which rely heavily on digital marketing for sales. Brands without websites and/or those who are not sending emails are leaving money on the table and missing out on sales.
⇨ Referrals, SEO and paid ads were utilized by fewer survey participants but ranked stronger for lead generation abilities. These may be avenues to explore if you’re looking for additional layers of outreach and visibility. However, please see the note below about not over extending yourself!
⇨ Business owners are working a lot and alone. There could be many reasons for this - lack of budget, reinvesting funds back into the business in other areas, unsure what or how to delegate, or maybe it is an intentional choice to work alone. Not everyone wants a team.
⇨ It is unclear whether participants are working full time in their business and/or whether they are relying on their business as their main source of income. We included the question about working hours as a way to determine if folks are full or part time in their business, but I would like to get more specific in the next round of this survey and ask whether they have other income sources outside their business.
⇨ Business owners are overwhelmed and having trouble “keeping up with all the things”. Leveraging people and tech could reduce work hours & overwhelm while also enhance productivity and profitability. But, investing in people, processes and tech tools can be tough when budgets and time are tight.
⇨ Business owners are utilizing a wide range of sales & marketing platforms and many are using multiple systems at the same time. It is unclear whether this is effective. Auditing these these platforms to identify where your best customers are coming from & which platforms are bringing in the most sales will ensure you’re focusing your time, energy and efforts in the right areas.
⇨ Our Paper Camp Alumni had higher representation in the higher revenue brackets. For example, our alumni accounted for 63% of the brands earning $300-500k in revenue. Our alumni were less represented in the lower revenue brackets (under $50k).
⇨ The industry outlook isn’t as grim as social media has us believing. 81% of participants are holding steady or experiencing growth. And, 72% expect to be in business in 5 years.
There are a million ways to grow a product based business and this survey is a really good reminder that what works for one brand may not work for another. Everyone is working towards different goals, with different time, budget and energy constraints. Your path may look different than the details described here, and that’s okay.
You do what works best for you.
If you’d like to receive further updates and analysis regarding the survey, please make sure you’re on our email list.
IMPORTANT REMINDER:
If you share this report or any statistics within the report, please be sure to credit Proof to Product as the source and link to https://www.prooftoproduct.com/2024survey. We want these survey results to help as many people as possible, but please do credit us appropriately when sharing.
For press inquiries or interview requests about survey results, please contact Brittney Lynn at brittney@prooftoproduct.com.
Connect with Katie Hunt
Katie Hunt is a seasoned business strategist with over 20 years experience coaching large corporations & entrepreneurs on sales & marketing strategies.
Since 2011, Katie has helped thousands of product brands successfully launch and grow their wholesale programs through Proof to Product. You'll find her client’s products stocked on the shelves of Target, Nordstrom, Container Store, Urban Outfitters, Starbucks and independent boutiques around the world.
With her guidance, Katie’s clients have…
» Increased wholesale revenue by 149% in one year
» Fulfilled a single PO for Barnes & Noble to the tune of $160k
» 10x wholesale revenue in a single month
» Hit yearly sales goals by October & took a month OFF!
She values simplicity in business and has a knack for breaking down complicated strategies into simple steps so that you have stronger sales, higher profit & more support.
Podcast: prooftoproduct.com/podcast | Instagram: @prooftoproduct
