I've seen quite a few threads on ecommerce and selling your product on Amazon, eBay, and your own site. Inevitably, many of these threads turn to discussions on how to get that product into a brick & mortar (B&M) retail store. I own a small B&M store with annual revenues of over 1.5m. I get dozens of contacts every week from companies trying to get their product onto my shelves. Although I can't speak for every type of product in every industry, I can give you insight on what has and has not worked on me in the past.
1. Make sure you have product-market fit.
This is the #1 reason I turn down potential vendors. If you have developed a great line of dog treats, contacting a health-food store or sporting goods store won't get you the best results. You might get a few interested people, but your efforts will be better applied focusing on pet stores and veterinarians. I once had a salesperson try to sell me fixtures for a physicians office. Sure, a state-of-the art exam table would be cool, but as I'm not a physician you've wasted my time and your time. Similarly, be aware of the market the store is in as well. I had a very good pitch on a product that I could see me carrying in my store. However, their wholesale price was around $45 with a MSRP of $90. I could get a similar (albeit not as luxurious) item for around $6-10 wholesale. My location is in a smaller, more rural location, and there is no way I was going to find enough buyers for this product to make it worth my while. Pass.
And be sure you understand that I am NOT your customer. I sell tons of stuff that I would never use, personally. You need to understand my customers, then sell me on how your product is perfect for them.
2. Make sure your product looks good on my shelf.
I have 1500sf of retail space, so I have to pick and choose what makes it on my shelf and what doesn't. If your product looks like you dropped it into a ziplock bag and slapped a UPC label on it, don't expect me to buy a dozen units from you. Become familiar with the different types of retail store fixtures and plan how to properly display your product on it. Is your product in a bag? Make sure you either provide a display box or have punch a hole in it so I can hang it on a peg. I found a great product that my customers loved, but it came in a hard plastic cylinder with no display case. If I placed them on the side they rolled off the shelf. If I placed them on end, they got knocked over all the time (and then rolled off the shelf). Found a competing product that came with a display and switched to that. Also, if you provide a free display, you can end up selling higher quantities. I went from carrying 4 units of 4 different SKU's (16 total products) to 6x6 (36 total) so as to fill up the display.
I recently went to a major industry trade show in Chicago. I was looking for a particular product line that I had been having difficulties finding at the wholesale level. And while I did find three companies that produced what I was looking for, I did not order from any of them based solely on their packaging. Two of them were extremely plain (think white label with black block letters). The third was so ugly that I told the booth rep that I would never even consider carrying their product with the current packaging.
3. Pick up the phone.
E-mails from unknown vendors get deleted with a minimal glance about 99% of the time (those that make it past the spam filter, that is). Direct mailers hit the recycle bin in under 30 seconds 9 times out of 10 (if you do choose this route, postcards are better than letters. I hate having to break out my letter opener for a sales pitch). You call me? I'll give you 60 seconds nearly every time. Sure, some retailers might be rude, but as a general rule we're in this business to make money. So if you have a product that can make me money I'll hear you out. But remember, my time is money too. One sales pitch sounded good so I wanted more information. They gave me a date and time of a 1 hour webinar to go visit. Sorry, but I don't have time for a 60 minute sales pitch. If you can't convey your USP and value proposition to me in a few minute conversation then I'm going to give you a hard pass and don't call back. I hate having my time wasted.
When you do call, ask for the owner. I've been referred to by many different titles by sales persons, but I always had the best feelings when I was addressed as the "owner". "The person in charge of buying" sounds more like a 9-5 that makes me yearn for the weekend. Smile when you talk on the phone (it helps, trust me), and engage me. You burn through your 300 word script in 15 seconds and I'll "thank you for time but it doesn't sound like it's the right fit for me" you every time.
Bonus points: If you were to take the time and ask me if I have any customers with XX problem who's needs aren't being met (and just so happened to be solved by your YY product)... as long as you've met the right product-market fit for my store I will most likely buy ZZ units from you on the spot.
4. Strategies that have, have not, and might work.
I read a post from a member here who was trying to get their product into a retailer and was told they would carry the product... if they paid an up-front fee and provided the first case free of charge (although most likely it was net-90 terms and not free product). While some industries might require this (it's called a Co-op and is most common in bookstores), some, including mine, don't. So while I have never been offered a co-op, you can bet if someone did I would take them up on their offer (even if it was a poor product-market fit) to see if it would sell.
If you have an untested product or brand, I'm going to be a little more hesitant in giving you shelf space. Most newer companies offer me either net-90 terms (I don't have to pay for the product for 3 months) or a 90-day money back guarantee. These have different effects on your balance sheet and cash flow, so choose the appropriate one. But if you offer me something ridiculous, like a 15-day guarantee, I'm going to pass. There's just not enough time for me to determine if a product is going to move or not.
Follow-Up! It's amazing how many sales persons will call me once, fax/email me a product sheet, and then never call me again. One company offered a product that I had a few concerns over. The rep called back and answered most of my concerns regarding the product. I thanked him for the information and told him I wanted to think about it for a couple of days. He never called back. If he had, I probably would have gave him a trial run to see if it would sell.
For the love of God, DON'T INSULT THE OWNER. One sales rep stopped by in person with his product line. When he asked what I currently used, I told him and he responded with "Ew, and people like them? Those are stupid products". You're not my boss and I don't have to justify my purchasing decisions to you. And if you insult the products I currently use, through the transitive property, you are insulting my ability to choose products and myself directly. You call my decisions stupid and it's no different than calling me stupid. That salesperson has stopped by a few times since then and is probably wondering why I don't give him the time of day. So instead of insulting the current inventory, try congratulating the owner on picking a good product, but why not replace that good product with a great one!
5. Pricing
I've seen several references stating that your wholesale price should be 50% of your retail price. And while 100% markup on all my products would be great, I'm willing to accept a lot less on products that will move. I have a few products with a slim 33% markup (wholesale for $10, retail for $13), but I know I'll move a couple hundred units per year so I'm willing to accept lower margins. This may be industry specific though.
I can be persuaded to buy extra units if there is some incentive. I try to keep 30 days (or less) of inventory on my shelf. So if I'm selling 6 units per month of Product X, I typically will only keep 6 on the shelf at one time. But, if you offer me a free display, 10% off, or a free unit if I buy 12 at a time, you will probably get a lot of takers. After all, if I know it will sell, then that 10% or extra unit is pure profit. And I like pure profit.
6. Don't Steal My Sales
This may be hard if you get your start online, but if you're actively pushing your sales through your own funnels you'll more than likely get a pass from me. I want a partner, not a competitor. This is not to say that you should discontinue all online sales if you want to move to a wholesale model, but at least try to push a few of the local sales my way. How many of us have gone into Best Buy to look at TV's only to turn around and buy one on Amazon? I don't want to be the Best Buy in this situation. Give your wholesalers exclusive SKU's or have your B&M partners listed prominently on your website. If I know you're letting customers in my zip code know there's a physical location they can get your product I'm more likely to forgive a high number of online sales. But if you treat me like a customer instead of a partner, it will be a very short relationship.
Also, be prepared to tell me how you are marketing your product in my area. While I will buy your product, display your product, and direct customers to your product, I'm not going to spend my $$ to sell your stuff. If all you're doing is AdWords and some SEO you will get a much smaller initial order from me than if you offered to do an EDDM in my zip pointing customers to my location. If you offered to do that and backed it up with some statistical data, you'll pretty much get a blank check from me.
The bottom line is that it is much easier to get your product into a B&M store than you realize. As long as you take the time to properly set up your product and sales strategy you'll get results. And remember every industry is different, so some of this may not be as applicable for your business as other parts. Thanks for reading!
1. Make sure you have product-market fit.
This is the #1 reason I turn down potential vendors. If you have developed a great line of dog treats, contacting a health-food store or sporting goods store won't get you the best results. You might get a few interested people, but your efforts will be better applied focusing on pet stores and veterinarians. I once had a salesperson try to sell me fixtures for a physicians office. Sure, a state-of-the art exam table would be cool, but as I'm not a physician you've wasted my time and your time. Similarly, be aware of the market the store is in as well. I had a very good pitch on a product that I could see me carrying in my store. However, their wholesale price was around $45 with a MSRP of $90. I could get a similar (albeit not as luxurious) item for around $6-10 wholesale. My location is in a smaller, more rural location, and there is no way I was going to find enough buyers for this product to make it worth my while. Pass.
And be sure you understand that I am NOT your customer. I sell tons of stuff that I would never use, personally. You need to understand my customers, then sell me on how your product is perfect for them.
2. Make sure your product looks good on my shelf.
I have 1500sf of retail space, so I have to pick and choose what makes it on my shelf and what doesn't. If your product looks like you dropped it into a ziplock bag and slapped a UPC label on it, don't expect me to buy a dozen units from you. Become familiar with the different types of retail store fixtures and plan how to properly display your product on it. Is your product in a bag? Make sure you either provide a display box or have punch a hole in it so I can hang it on a peg. I found a great product that my customers loved, but it came in a hard plastic cylinder with no display case. If I placed them on the side they rolled off the shelf. If I placed them on end, they got knocked over all the time (and then rolled off the shelf). Found a competing product that came with a display and switched to that. Also, if you provide a free display, you can end up selling higher quantities. I went from carrying 4 units of 4 different SKU's (16 total products) to 6x6 (36 total) so as to fill up the display.
I recently went to a major industry trade show in Chicago. I was looking for a particular product line that I had been having difficulties finding at the wholesale level. And while I did find three companies that produced what I was looking for, I did not order from any of them based solely on their packaging. Two of them were extremely plain (think white label with black block letters). The third was so ugly that I told the booth rep that I would never even consider carrying their product with the current packaging.
3. Pick up the phone.
E-mails from unknown vendors get deleted with a minimal glance about 99% of the time (those that make it past the spam filter, that is). Direct mailers hit the recycle bin in under 30 seconds 9 times out of 10 (if you do choose this route, postcards are better than letters. I hate having to break out my letter opener for a sales pitch). You call me? I'll give you 60 seconds nearly every time. Sure, some retailers might be rude, but as a general rule we're in this business to make money. So if you have a product that can make me money I'll hear you out. But remember, my time is money too. One sales pitch sounded good so I wanted more information. They gave me a date and time of a 1 hour webinar to go visit. Sorry, but I don't have time for a 60 minute sales pitch. If you can't convey your USP and value proposition to me in a few minute conversation then I'm going to give you a hard pass and don't call back. I hate having my time wasted.
When you do call, ask for the owner. I've been referred to by many different titles by sales persons, but I always had the best feelings when I was addressed as the "owner". "The person in charge of buying" sounds more like a 9-5 that makes me yearn for the weekend. Smile when you talk on the phone (it helps, trust me), and engage me. You burn through your 300 word script in 15 seconds and I'll "thank you for time but it doesn't sound like it's the right fit for me" you every time.
Bonus points: If you were to take the time and ask me if I have any customers with XX problem who's needs aren't being met (and just so happened to be solved by your YY product)... as long as you've met the right product-market fit for my store I will most likely buy ZZ units from you on the spot.
4. Strategies that have, have not, and might work.
I read a post from a member here who was trying to get their product into a retailer and was told they would carry the product... if they paid an up-front fee and provided the first case free of charge (although most likely it was net-90 terms and not free product). While some industries might require this (it's called a Co-op and is most common in bookstores), some, including mine, don't. So while I have never been offered a co-op, you can bet if someone did I would take them up on their offer (even if it was a poor product-market fit) to see if it would sell.
If you have an untested product or brand, I'm going to be a little more hesitant in giving you shelf space. Most newer companies offer me either net-90 terms (I don't have to pay for the product for 3 months) or a 90-day money back guarantee. These have different effects on your balance sheet and cash flow, so choose the appropriate one. But if you offer me something ridiculous, like a 15-day guarantee, I'm going to pass. There's just not enough time for me to determine if a product is going to move or not.
Follow-Up! It's amazing how many sales persons will call me once, fax/email me a product sheet, and then never call me again. One company offered a product that I had a few concerns over. The rep called back and answered most of my concerns regarding the product. I thanked him for the information and told him I wanted to think about it for a couple of days. He never called back. If he had, I probably would have gave him a trial run to see if it would sell.
For the love of God, DON'T INSULT THE OWNER. One sales rep stopped by in person with his product line. When he asked what I currently used, I told him and he responded with "Ew, and people like them? Those are stupid products". You're not my boss and I don't have to justify my purchasing decisions to you. And if you insult the products I currently use, through the transitive property, you are insulting my ability to choose products and myself directly. You call my decisions stupid and it's no different than calling me stupid. That salesperson has stopped by a few times since then and is probably wondering why I don't give him the time of day. So instead of insulting the current inventory, try congratulating the owner on picking a good product, but why not replace that good product with a great one!
5. Pricing
I've seen several references stating that your wholesale price should be 50% of your retail price. And while 100% markup on all my products would be great, I'm willing to accept a lot less on products that will move. I have a few products with a slim 33% markup (wholesale for $10, retail for $13), but I know I'll move a couple hundred units per year so I'm willing to accept lower margins. This may be industry specific though.
I can be persuaded to buy extra units if there is some incentive. I try to keep 30 days (or less) of inventory on my shelf. So if I'm selling 6 units per month of Product X, I typically will only keep 6 on the shelf at one time. But, if you offer me a free display, 10% off, or a free unit if I buy 12 at a time, you will probably get a lot of takers. After all, if I know it will sell, then that 10% or extra unit is pure profit. And I like pure profit.
6. Don't Steal My Sales
This may be hard if you get your start online, but if you're actively pushing your sales through your own funnels you'll more than likely get a pass from me. I want a partner, not a competitor. This is not to say that you should discontinue all online sales if you want to move to a wholesale model, but at least try to push a few of the local sales my way. How many of us have gone into Best Buy to look at TV's only to turn around and buy one on Amazon? I don't want to be the Best Buy in this situation. Give your wholesalers exclusive SKU's or have your B&M partners listed prominently on your website. If I know you're letting customers in my zip code know there's a physical location they can get your product I'm more likely to forgive a high number of online sales. But if you treat me like a customer instead of a partner, it will be a very short relationship.
Also, be prepared to tell me how you are marketing your product in my area. While I will buy your product, display your product, and direct customers to your product, I'm not going to spend my $$ to sell your stuff. If all you're doing is AdWords and some SEO you will get a much smaller initial order from me than if you offered to do an EDDM in my zip pointing customers to my location. If you offered to do that and backed it up with some statistical data, you'll pretty much get a blank check from me.
The bottom line is that it is much easier to get your product into a B&M store than you realize. As long as you take the time to properly set up your product and sales strategy you'll get results. And remember every industry is different, so some of this may not be as applicable for your business as other parts. Thanks for reading!
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