Lean Business Operations
Probably one of the most common questions asked by the product-based manufacturers that I speak with involves sales offline vs online. Many people say that offline sales such as with retail are dying and fading away, and to a certain extent that is correct. Amazon and the ease of eCommerce solutions puts a lot of pressure on offline outlets.
While there are benefits for both online and offline sales and marketing, many manufacturers find the costs, management, and general time needed for offline product sales to be too much.
Generally it`s a good idea to start online because of the lack of overhead costs and the ability to scale and market efficiently. Usually this is how most start-ups or crowdfunded businesses start because making sure there`s a market for your product and building up finances is essential.
When does offline becomes plausible?
The question of whether or not to sell offline really becomes apparent as online sales either become maximized or allows for enough profit to invest in further expansion into new sales channels and outlets.
The fact for retail and other offline sales channels is that they will open up new opportunities for expansion if you plan appropriately and target correctly. This is probably the most daunting tasks for a business used to selling primarily online with little experience dealing with the complexity of selling to distributors or retails or even hospitality outlets (restaurants, hotels, hospitals, etc).
It is at this stage in your business development when constructing a strategy, seeking help, or at the very least educating yourself on retail becomes crucial for the growth of your business. Many product-based manufacturers learn-by-doing
which can take much longer and be expensive relative to the costs of hiring professionals to help or taking the time to plan intelligently.
Confident in your ability to go offline on your own? Consider challenges such as supply chain changes, possible back-order fees, pricing strategy for retail, promotional activity consolidation and planning across online and offline channels, paperwork, time required to manage retail accounts, and more.
I`m not trying to scare you… rather sober up some conceptions of offline sales.
So you`re saying retail is dead?
Of course not. Have you seen what I do for a living?
Retail can be an outlet to sell much larger quantities and to reach buyers that would never have found your product online. Business revenue and growth can be achieved much quicker offline when you`ve established some strong relationships with several retailers or distributors. There`s a reason millions of people walk through the doors of Best Buy or Dick`s Sporting Goods and it has a lot to do with personally seeing and interacting with the product.
The key for selling offline is to start small and work your way up – to test your brand and supply chain against the new pressure on production and internal activity required. As a new entity in the retail scene, you wouldn`t go after Walmart or other large-chain stores.
For most manufacturers in this situation, finding someone with expertise in retail who can either handle operations for you or at least guide you to avoid costly errors is a no-brainer.
I`ve heard so many sad and frustrated stories of businesses who tried to make it into retail or even smaller stores but could not for one reason or another. Most of these businesses could`ve made their sale or seen success if they had more experience or guidance.
Asking the right questions – offline sales
If you`re thinking about going after some offline sales channels such as retail, distributors or hospitality then you need to be able to ask the right questions. If you can`t ask the right questions then how will you find the right answers?
- Am I ready to sell to retail?
- What kind of questions will store owners ask me?
- How expensive is it? Even to start small..
- How can I find legitimate expertise to help me?
- What future obligations does retail require of me?
- How much management time will I need to dedicate?
- Which retailers and distributors should I target?
- How do I price my product effectively to encourage sales?
There`s lots of questions, and the answers can be difficult to find on your own. If you have these types of questions feel free to comment or contact me and I`ll be happy to help.
Once you have these questions answered, it becomes a matter of execution which is a totally different challenge all together. It helps to have someone knowledgeable on your team to answer questions and issues as they arise or even outsource the retail marketing strategy.
Still considering offline sales – take action!
It`s easy to fall into the trap of trying to educate yourself but actually spending too much time doing so. Why not take action right now and do in a couple weeks what would otherwise take months? Spend some time reading some of my other posts and connect with me!
Working alongside former large-chain retail buyers and product-based manufacturers allows me to offer you full solution advice to make you, your business, and your time more profitable when selling offline.