Let’s Set the Stage
You’ve built a unique product, can financially handle POs, have a well-defined retail strategy to minimize risk, and have established interest from some key retail partners. You’ve made it further than most product entrepreneurs and it’s time to start executing your way towards scaleable channel revenue.
And here’s where this article begins…
Execution Blind Spots
Most product (hardware) CEOs, CMOs, and founders I talk to have done their homework on retail. You can’t get past the manufacturing stage without making due diligence a habit; however, strategy and research alone cannot prepare you for the unknown variables of retail execution. While you can’t eliminate every unknown variable – such as new PO forecasting or competitor activities – the most dangerous execution variables are the ones you don’t know exist.
You can have a perfect pricing strategy, channel strategy, top-notch sales reps, logistic management, etc and can still get bogged down in the nuances of day-to-day activities with retailers or distributors. Additionally, achieving sales traction online or establishing initial reseller channels does not qualify your company to push further into additional channels at scale.
Rather than simply accepting that risk exists in retail, we need to reduce the risk wherever we can.
Common Blind Spots
Here are a few of the most common mistakes and blind spots that I see from young product companies who are getting into retail for the first time. Often times these companies will end up contacting me once they’ve tried retail by themselves first only to realize that it’s harder than they realized.
- Expecting retailers and distributors to market your product for you. Think you have the “next big thing” that will sell itself? Probably not.
- Underestimating the amount of time it takes from first contact with a buyer to seeing revenue from a new PO (online or offline).
- Overestimating the scope of work that sales agencies or distributors provide.
- Underestimating the time commitment required for daily retail operational activities (i.e. MAP control, inventory management, marketing implementation, etc).
Again, the reason why many product companies have difficulty with these challenges is because they are difficult to understand if you’ve never bought or sold in retail before; plus every product and company is different and one size does not fit all.
Achieving Scaleable Retail Growth
Going from “startup” to “scaling” doesn’t just mean placing your products in big box channels. If that were true I wouldn’t be writing this article, instead I’d be rolling in cash on my yacht – and so would many other product entrepreneurs.
Because the challenge of placing products in national big box channels seems so daunting, many believe that achieving this is the end of their worries. Acquiring a new retail or distributor partner simply starts the opportunity to grow and scale.
Scaling any sales channel opportunity requires an execution team who understands how to treat channels as partners and understands the nuances of day-to-day channel activities. This is especially true for smaller, newer brands trying to pioneer something new onto the marketplace. Scaleable growth is achieved through repeat POs and long-term retail relationships allowing you to more easily integrate future products into pre-existing channels.
Spending 8 months to get into Best Buy stores only to get kicked out 3 months later due to poor sell-through is not a great way to spend your limited resources and time.
Testing, gaining feedback, and more testing
The more data, customer insights, buyer feedback, and testing you can do in the early phases of bringing your product to market the less mistakes you’ll make when trying to scale. Whether that be in the product development stage or actually launching your products in retail.
The better you can justify going after attainable milestones with data and logical moves, the less risk you’ll have and the more cost-effective your approach will be.
It takes many years to be an overnight success. At Retailbound we refer to this as the “slow burn” in terms of your sales channel strategy.
This blog was written by Benjamin Ertl – Director of Business Development at Retailbound – representing a new retail growth model for innovative product brands to leanly prepare, establish, and scale a retail presence. You can contact him at email@example.com for more information on how to grow in retail.