How much ammo do I need to approach a major retailer?

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How much ammo do I need to approach a major retailer?

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bigPhil

posts: 35

Jul 25, 2009 5:23 PM ET Quote Report Abuse

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How much ammo do I need to approach a major retailer?

My idea for an initial strategy is to sell my product directly to the end customer first. I was planning on using evidence of this success to approach smaller retailers as potential licensees, and then hopefully approach major retailers assuming the product is good enough to have made it this far. Is this a good strategy? Does anyone have any experience licensing inventions to major retailers/industry giants? Any insight would be greatly appreciated.

Cheers,

bigPhil

nevadascul

posts: 640

Jul 25, 2009 7:25 PM ET Quote Report Abuse

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You need to be careful on your pricing structure for all your target markets. You have to make your initial pricing to the end user high enough to accomodate pricing discounts to retailers. Then you can give your retailers a substantial pricing discount so they can sell your product at or slightly lower price to the end users and still meet their profit margin goals. Also, all retailers are not the same nor should they receive the same discount.

I was a parts manager for a company that sold to end users for example. But, we also had a tiered pricing structure for the various retailers we sold to. Their discount was partially based on the amount of our product they were likely to move. A contractor doing piece work received the lowest discount, 10 percent. A distributor on the other hand received a 50 percent discount off of the retail price ( what then user would pay). Without this tiered pricing system, there is no reason for a retailer to handle your product.

If you would like more information you can contact me at culshaw@spcfreelance.com

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The older we get, the more excuses we make for not chasing after our dreams. But truth is, goals are attainable at any age.

bigPhil

posts: 35

Jul 26, 2009 5:20 PM ET Quote Report Abuse

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Nevadascul,

Thanks for your reply. I read that independent inventors with a single product line often have trouble licensing a product. One question was really do I need to have documented proof that the product sells before I approach a major retailer? I was initially planning on selling directly to customers to document success to go to small retailers, and then use the sales from the small retailers to approach the bigger ones.

Thanks.

nevadascul

posts: 640

Aug 06, 2009 1:27 PM ET Quote Report Abuse

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Do what big businesses do, set up a focus group of people that might buy your product and get their opinions. Or, you could set up a small test market. Then use the information to market your product.

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The older we get, the more excuses we make for not chasing after our dreams. But truth is, goals are attainable at any age.

Jeffkitchenware

posts: 32

Aug 13, 2009 3:08 AM ET Quote Report Abuse

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I am in kitchen equipment supplies. If someone has proven the product in the market I would definitely feel more favorable towards it. The strategy appears to be right but you will have to unroll it fast, imitators are lurking everywhere.

Ashton

posts: 25

Aug 14, 2009 3:42 PM ET Quote Report Abuse

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Two blog posts/resources which may be of interest/help to you regarding things to know about selling through mass market through major retail channels:

http://www.fashion-incubator.com/archive/selling-to-department-stores-pt1/

http://blog.productgss.com/2009/08/selling-to-mass-market-through-big-box-retailers-and-department-stores.html

bigPhil

posts: 35

Aug 14, 2009 4:36 PM ET Quote Report Abuse

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Thanks Ashton, great resources.

Clay

PGAGE35

posts: 7

Sep 22, 2009 6:29 PM ET Quote Report Abuse

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Phil,

When approaching a major retailer, you need to have a sales and marketing plan in place. If you are able to include a sales history for your product that will reduce the risk for the buyer to purchase your product. You have to realize that a buyer is scared of purchasing an unproven product. The only exception is if you have a unique product that the buyer is sold on because of the support you offer in your marketing plan. I helped my friend take his new product to market and we sold it to walmart and QVC plus thousands of c-stores with zero sales history. Our product was an exception because we had a killer marketing plan that the buyer bought into. The buyer is responsible for purchasing new products that fit their overall objective and that their consumers want. If you can show the buyer that the consumers will want your product or show them that you have already sold your product to other retailers with success, then they will really consider purchasing your product. The key take away is you must be prepared with a sales and marketing plan showing how you are going to get consumers to purchase your product and have money to support the retailer with in store promotions or in store advertising. You can visit my site for more information about selling your product to retailers and distributors.

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