TL;DR: Started a manufacturing company. None of my competition has been able to service the largest retailer in the field. I know I can. I have a meeting with them on Wednesday to demo my products (they reached out to me, VP product management & commercial sales saw my Insta ad) and potentially roll me out to 100+ stores. Need advice on what to prepare for a meeting like this and how to handle negotiations.
A while back I made a post about a manufacturing company I started going after a specific niche. Two days ago I was contacted by the largest retailer in the market to meet on Wednesday to present my products and potentially rolling me out to all 100+ retail locations.
The market:
The opportunity:
What Happened Over the Phone
- When the VP called me, she told me that they've been wanting to get these products in their 100+ stores but have only been able to sell the Chinese products "which suck" because of the above reasons.
- She called knowing that I'd solved the logistics problem for the $17 and hopeful I knew how to solve the scalability issue of the $55.
- Conditional on a successful product demo on Wednesday, she very briefly mentioned they'd be willing to "help me scale" and not to talk to the other retailers b/c they want exclusivity.
My Situation (Need Advice Here!!!)
- The exclusivity condition is a poisoned apple in my opinion. I'm willing to settle on retail exclusivity as long as I maintain rights to selling through online channels (how I'm currently selling) because I know I can eventually grow online to keep me from relying on any one source of sales.
- Helping fund me to meet their demands is MAYBE a poisoned apple as well. This company has a history acquiring similar companies to me, gutting them, then outsourcing to China. I have no doubt if I let them even get a vague of how I've solved the manufacturing problems they'd find a Chinese manufacturer to replace me in a heartbeat. On the other hand, if they want to eventually buy me out once my products have proven themselves, then take it to China, then heck yeah!
- I DESPERATELY WANT but don't need this deal. Manufacturing has ridiculously high barriers to entry with a winner-take-all effect due to economies of scale, much less a small market with established players like this. The cash injection from a deal with them would solve 99% of my problems. I know I can still pull it off without them so I am prepared to walk away from a bad deal, but my health has taken a significant hit just getting the business to this point.
I'd appreciate any advice on how to prepare for the meeting on Wednesday and what to expect.
A while back I made a post about a manufacturing company I started going after a specific niche. Two days ago I was contacted by the largest retailer in the market to meet on Wednesday to present my products and potentially rolling me out to all 100+ retail locations.
The market:
- Chinese manufactures: Wholesales @ ~$2-3 and retail at $7. Quality is bad.
- US manufacturer: Retails at $55 and has had a monopoly for about 2 generations for the premium stuff. Has a cult following for his products.
- EU manufacturer that created a budget premium version at $17 retail about 8 years ago and has had an uncontested monopoly at that level since.
The opportunity:
- US ($55 product) manufacturing process is inherently not scalable after a certain point for that product. Only sold in limited quantities.
- The EU ($17 product) are not currently being sold retail because of logistical issues.
What Happened Over the Phone
- When the VP called me, she told me that they've been wanting to get these products in their 100+ stores but have only been able to sell the Chinese products "which suck" because of the above reasons.
- She called knowing that I'd solved the logistics problem for the $17 and hopeful I knew how to solve the scalability issue of the $55.
- Conditional on a successful product demo on Wednesday, she very briefly mentioned they'd be willing to "help me scale" and not to talk to the other retailers b/c they want exclusivity.
My Situation (Need Advice Here!!!)
- The exclusivity condition is a poisoned apple in my opinion. I'm willing to settle on retail exclusivity as long as I maintain rights to selling through online channels (how I'm currently selling) because I know I can eventually grow online to keep me from relying on any one source of sales.
- Helping fund me to meet their demands is MAYBE a poisoned apple as well. This company has a history acquiring similar companies to me, gutting them, then outsourcing to China. I have no doubt if I let them even get a vague of how I've solved the manufacturing problems they'd find a Chinese manufacturer to replace me in a heartbeat. On the other hand, if they want to eventually buy me out once my products have proven themselves, then take it to China, then heck yeah!
- I DESPERATELY WANT but don't need this deal. Manufacturing has ridiculously high barriers to entry with a winner-take-all effect due to economies of scale, much less a small market with established players like this. The cash injection from a deal with them would solve 99% of my problems. I know I can still pull it off without them so I am prepared to walk away from a bad deal, but my health has taken a significant hit just getting the business to this point.
I'd appreciate any advice on how to prepare for the meeting on Wednesday and what to expect.
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