Forums: Discussions for entrepreneurs and small business.

Hello,
I have heard that traditionally it`s the product manufacturer who`s responsible to pay for the Point of Sale (POS) displays (some are simple a cardboard tray, some are more elaborate free-standing racks and such) at the retailers.  Have you heard or experienced differently? 

If you`re the manufacturer, do you encounter small retailers being more welcoming of your POS or being hesitant?

Has anyone tried to negotiate having the retailer share some of the cost of the POS display if it`s a very elaborate one (i.e qualify as permanent display)? 

Any feedback is greatly appreciated!

It`d be helpful if you mentioned the industry because I only know about apparel related business and our industry is weird. Rules that hold in other industries are different in ours.


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~Nurture people, not products~
http://www.fashion-incubator.com

Hi  kathleenfasanella,

The industry I`m curious about is the pet apparel/accessories area.  What have you experienced in the apparel business in general? 

Thanks!   

Oh boy. That`s a whole other ball of wax because you`re likely talking about big box retailers. There`s a whole host of issues well before you get to worrying about display. Selling to big box stores will necessarily involve factoring and as such -with the cost being 20% of invoice- you`ll need to offshore production to make those tiny itty bitty margins. To say nothing of vendor compliance, EDI, chargebacks, returns of unsold product etc. Maybe I know too much but this isn`t a model I`d launch with. My unquestionably opinionated opinion is to soft launch, sell yourself and to independent stores and if it takes off, become acquired UNLESS you have the skill sets to proceed further. Sorry, you probably didn`t want to hear that.

Regarding product displays, a given vendor`s compliance handbook should provide clues. Selling to independents, you can go either way. Some want the displays and will pay for it, some won`t. Generally, if you can, have the buyer buy the display. However, in this increasingly competitive market, your product is going to have to be really hot to get them to fork over for it. Maybe you can offer a free one with a minimum initial order of X units.

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~Nurture people, not products~
http://www.fashion-incubator.com

kathleenfasanella,

Our initial strategy is exactly what you suggested - approach the small retailers first, so I`m most curious about how receptive they are w/ who`s providing the POS displays.  Your tips really shed some light.  It sounds like you have some battle scars negotiating w/ big box retailers.  I think many of us would love (and maybe hate) to see that day!  Would you care to share some battle stories for those of us who hadn`t made it? 

... Being acquired, well, that may not be a bad turn of event, if it`s like how Jibbitz was acquired by Crocs! With success stories like Soap Works and Baby Einsteins, it`s really a different type of happy day when acquired!

In the technology field, many startups begin with the sole objective to be bought out by larger companies and they position themselves that way.  I think we can certainly apply that principle in the non-tech field too, wouldn`t you say?

I couldn`t begin to post that here, with over 1400 entries on my website (http://www.fashion-incubator.com) I wouldn`t know where to start. It`s probably better to read up and then ask questions from there. We also have a forum for more targeted (privlidged) information on this topic but I hesitate to mention that as it`s not public and only open to members. Not that it`s hard to join, just that it`s not public for legal reasons. In any event, there`s plenty content that`s accessible and free. I`d suggest starting with some of these:
http://www.fashion-incubator.com/archive/importance_of_product_identification
http://www.fashion-incubator.com/archive/importance_of_product_identification_pt_2
http://www.fashion-incubator.com/archive/fulfillment_centers_pt1
http://www.fashion-incubator.com/archive/fulfillment_centers_pt2
http://www.fashion-incubator.com/archive/hangtags_labels_domain_names_competing_with_your_customers
 http://www.fashion-incubator.com/archive/adhd_dump_factoring
http://www.fashion-incubator.com/archive/adhd_dump_factoring_2
http://www.fashion-incubator.com/archive/factoring_invoices_financing_a_fashion_line
If you read the one below, be sure to read the three above this.
http://www.fashion-incubator.com/archive/financing_fashion_10_mistakes_designers_make
http://www.fashion-incubator.com/archive/vendor_compliance_handbook_1
http://www.fashion-incubator.com/archive/vendor_compliance_handbook_2
http://www.fashion-incubator.com/archive/why_i_dont_write_about_apparel_manufacturing_overseas

And like I said, there`s info on our forum on this topic I can`t publish publicly. Basically more of the downsides of selling to big box retailers. Lastly, I`d be remiss if I failed to mention the book I wrote about how to navigate these waters. It`s _The Entrepreneur`s Guide to Sewn Product Manufacturing_.

Good luck!

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~Nurture people, not products~
http://www.fashion-incubator.com

Hey-

I have bought from a vendor before who had beautiful POS displays.  They had two options.  You could pay for the display and buy a small amount of product or get the display for free with a large order.  You may be able to do this, just figure out how big an order you would need to cover the cost of the display and make that one option and then also offer the display separately as well.

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Tracy Barnhart, Owner
Giverny, Inc. / Mini Me Geology
http://www.GivernyOnline.com
http://www.MiniMeGeology.com

In the food industry, a retailer can frequently get a cardboard display  for free if we buy a larger amount of food. Usually this is a 3-4 case variety of one product. Generally buying it this way is cheaper per unit, so it makes sense to buy them if there is room to use the product and display. For higher end displays, like wire racks or wood shelving, they are generally for purchase, but usually at a large discount for buying enough product to fill it.

If this were a permanent display that looked nice, I think I would be very inclined to pay a reasonable amount for a display because it would help my sales.


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http://www.ifancyfood.com

Thanks everyone, it sounds like the cost of POS displays is negotiable with small retailers.  That`s great, it does offer more incentive for small product manufacturers to invest in POS design and production so it benefits both sides.  These things could be so expensive if they`re elaborate, but can add so much more pizazz to the product line! 

What are some of the sample cost and display types that you guys have come across?