Since Retailbound was founded in 2008, we’ve seen thousands of products launch, fail, succeed, and everything in between in the retail space. There’s a lot to be said about a brand’s likelihood of success by how proactive or reactive the team is in developing and executing retail strategies.
- Do you treat your retailers and distributors as customers or partners? Proactive / reactive marketing, communications, sales training, and inventory allocation are all a part of this. Make your retail partners’ jobs easier – they’ll prefer doing business with you over others.
- Does your pricing and profit margin account for added retail costs? Many brands price themselves so low on Amazon that they end up pricing themselves out of retail. The problem is that most product startups don’t fully understand the costs of doing business at retail. Plan proactively – don’t react to retailer’s demands as-needed.
- What’s the next product? Companies who don’t have a product road map will quickly find themselves replaced as competitors crop up with better features or lower price points. Be proactive and keep planning ahead.
Scaling Means Earning Repeat Purchase Orders
Most new products don’t survive at retail – regardless of innovation or funding. The statistics are stacked against new products and brands. Diving into the “why” behind product failure leads to many possibilities: product issues, not enough money, strategy mistakes, or not enough consumer demand.
These common “failure” reasons mention nothing about placing product with retailers, distributors, or sales agencies.
Finding the right retail contacts isn’t easy but there’s a lot of resources out there to get in touch with a retailer – trade shows, “risk free” sales agents, or online platforms like Range.me. The larger the retailer, the more difficult finding a buyer can be. In fact, buyers change locations and jobs often to avoid vendor bias (not playing favorites on brands).
As a manufacturer, you’ve only made money once an end-consumer buys your product and doesn’t return it. Scalability doesn’t have to mean selling in 10,000 physical locations across North America. In fact, doing so can be too costly to operate. Selling through retailers is simply a way to leverage pre-established sales channels, audiences, and the retailer’s brand. That’s it. If the costs, audience demographic, or terms of dealing with various sales channels do not match your criteria then don’t pursue the opportunity.
Being Proactive for Repeat Purchase Orders
Having the right price, packaging, and product are a necessary component to scaling sales at retail; however, it’s the after-sale activities that most brands have little visibility on that creates stagnation and challenges.
- Proactive on strategy: Don’t sell ice to Eskimos. It’s crucial you have an end-to-end understanding of which retail channels are the best fit for your product, the marketing (and cost) each retailer uses, the terms these retailers work on, and their expectations for vendors.
- Proactive marketing: Do you propose marketing ideas preemptively for key times of the year – or do you wait for the retailer to suggest something? How often do you connect with your sales agents or distributors to improve sales tactics, explore new opportunities, or update product training?
- Proactive management: Do you assume that your retailers, distributors, or sales agents are pushing your brand for you? How quickly do you respond to end-consumers and retail partners? Most importantly, do you understand the retailer’s job and take steps to save him / her time or frustration?
All of this is necessary if you wish to scale. Repeat orders often lead to larger orders, greater shelf space, and added marketing opportunities. It’s not just about which products have the best features. It’s about how you collaborate with your channel partners and how easy (or difficult) you make their jobs.
Retail is a competitive space. Everyone thinks they have a “cool” or “innovative” product. Go beyond the mindset of just selling a product to a retailer. If you don’t compete on the post-sales / proactive level, someone else will and take your spot in the sun.
For more clarification, examples, or to discuss retail strategies don’t hesitate to reach out to Benjamin Ertl, Director of Business Development at firstname.lastname@example.org or 715-820-3057.