You’ve developed a great product, ran a successful crowdfunding campaign, have investors, positive feedback, received some retailer or distributor interest, and have even nailed down mass-production.
Your team is comprised of mostly product engineers, developers, and perhaps some online marketers. Maybe you yourself are heavily involved with helping to create the product.
It’s time to take your business to the next level by starting to expand into channels besides just your own website and Amazon. This means retail, distribution, or other verticals like hospitality.
Using existing media attention and leads from earlier activities has enabled you to establish conversations with several promising retail distribution channels.
Things are looking pretty good… but here’s where things turn sour.
1. Those who never make it into the door
For some of you, converting initial interest from retailers or distributors into actual purchase orders and signed contracts is the main challenge.
If you’re like many hardware/consumer good startups, you have a strong grasp on the development and manufacturing side but probably don’t have much experience with retail and the processes involved.
And for many like yourself, acquiring this retail experience comes with its fair share of mistakes, costs, and backtracking.
Not understanding the nuances of how to sell to retailers, how to prepare a complete strategy, or the retail process in general blocks many would-be retail success stories.
There’s a lot of work that goes into being “retail-ready”. Retail buyers expect you to have everything in place before taking up their time to pitch your product – and you don’t often get a second chance at a first impression.
But wait, can’t I just hire some sales reps to do all this?
Sales reps or agencies can play a pivotal role to get your foot in the door with buyers.
Having motivated, competent sales reps is a challenge all by itself, and sales reps also can’t do their jobs well if they aren’t equipped correctly (i.e. buyer presentations, samples, marketing materials, retail marketing strategies, etc). Reps are for executing an already defined strategy.
2. Getting kicked out the door
If you’ve managed to acquire some retail or distributor channels, congrats! But the work is just beginning.
Many innovative product companies get overzealous with the sell-in side of retail (meaning sales reps and acquiring new channels) and forget where the real value of retail is derived from. The consumer.
The difference between short and long-term success for your company will be determined on sell-through and how you manage your channel partnerships.
I put “partnerships” in bold because you need to treat your retailers and distributors like a partner as opposed to just another customer. Work with your channels on marketing programs, product management, customer support, and similar daily activities.
At the end of the day your channel partners need to make money from your products (as do you of course). If they have to wait a long time to hear from you or hold your hand through every step, then you might not last very long as a vendor in that channel.
Sell-through strategies can vary depending on the retailer (online & offline), and it can take quite a bit of time to develop and manage specific marketing strategies per channel.
I can’t tell you how many intelligent product entrepreneurs I’ve spoken to who’ve had their hopes shot down due to not allocating enough efforts towards sell-through and proper channel management. It doesn’t matter if you’re selling in 5 channels or 5,000 channels – it’s all about end-consumer sales.
3. What can you do?
If you’ve got plenty of retail experience and a thorough strategy in place for both sell-in and sell-through then you’re probably doing all right.
If either scenario 1 or 2 from above sound eerily like your situation then perhaps it’s time to seek out some additional expertise before you invest time and money going in a particular direction.
There are a lot of potential options for an up-and-coming product companies like yourself such as: doing it yourself, hiring an employee, sales agency, or an outside contractor.
Your options are all a different balance of time vs money. It depends on which stage you’re at in pursuing retail, your existing team, budget, and other factors.
I hope you’ve enjoyed my blog post…if you’d like to learn more about potential options to grow in retail feel free to email me at bertl@retailbound.com
