I’m sure we’re no different than any other business development group, sales broker, or industry consultant….call us what you will. Regularly we’re contacted by brazen and excited people who want to get their great new pet rock into the retail world. I usually try to respond to their excitability with my own form of idealism. Something like….Why?…or maybe….Are you nuts?….or if I’m really in a bad mood….Good luck! The reality is lots of good consumer health products are out there, have been out there…and will be out there tomorrow…that never see the light of day. The reasons are countless.
So, what does it take to make a product succeed in today’s challenging retail environment?
1. First and foremost you need to define YOUR idea of success. Not everyone needs to get their product into the major food, drug or mass chains to achieve success. I know that’s counterintuitive to many people but it’s true as long as it fits your vision.
2. Build a plan to fit your vision (and your budget).
3. It really, really helps to have a product or marketing advantage that has, as the advertising world puts it, a unique selling proposition. You don’t need to reinvent the wheel necessarily but if you find a new way to get new people to buy your wheel…well now you have something. Retailers only have so much space on their shelves. Give them something new to create REAL new sales (incremental sales), not just selling your item over someone else’s…now that’s a big win for them.
4. Get some money and spend it wisely. Salespeople, tradeshows, trade advertising, packaging, websites, slotting fees, advertising campaigns, TPR’s, insertion fees, co-ops, returns, etc. It adds up fast. Those that are underprepared can crash and burn fast.
5. Hire right. Hiring someone from the consumer health channel will help…whether it’s your own dedicated sales staff or one of the many business development groups….or you set up your own broker network. Half of the sales battle for a start up, and even non startups, is getting through to the decision makers at the right time. The other half is knowing how to structure the proposal to fit each retailers unique needs. Hiring a team (or person) with trade experience and connections can save you a lot of time, energy and money….and if they’re honest they can tell you up front if your plan has a chance to succeed, and if not, what changes they think should be made.
6. Price right. See point 4. There are a lot of hidden expenses in this business. Make sure you’ve identified as many as you can before developing your price points. Competitive analysis is critical in positioning your retail price point and understanding your retailers profit needs and hidden expenses will help you create your selling price.
7. Be careful what you wish for. Everyone wants to get into the biggies, but if you don’t know what you are doing they can kill you before you get off the ground. Of course, much of this relates to pricing, budget, etc. But what I really mean is if you don’t REALLY know how your product will perform at store level, then a poor performance at the big boys will be a costly lesson. Perhaps a killer. It’s best to understand how your product will perform so you can understand if you are making a wise investment in their ad programs, slotting allowances, etc. Getting your feet wet at smaller regional chains will help you understand product performance and allow you to better gauge your investment with the big boys.
8. Be patient. While some companies/products get off to huge starts and find themselves in 30,000 stores quickly, a more likely scenario is slow, grinding growth. And after you’ve read point 7, you’ll understand that in some ways this is not such a bad way to go. Buyers typically only look to add/change products under their control once or twice a year (and in some cases not even that). If you miss out…or just haven’t made a strong enough case it’s a long wait.
9. Diversify. Just like the stock market. You can look at this a number of different ways…but in a nutshell…consider trying to develop multiple products instead of relying on just one. Consider finding other outlets for your product than just your current focus. So if you are currently focusing on food, drug, mass….will your product line also fit other channels? What about infomercials, convenience stores, gift stores, food service, independent drug stores, natural health, optical, etc? And don’t forget export.
10. Watch, listen, learn, network. This is a fairly small business community. Most people I’ve met are very friendly and open to discussions regarding their experiences. So get out there. Get involved. Meet people. Find out what’s worked for them. What has failed them. They can save you time and money, and steer you in the right direction.
Retailers are clamoring for opportunities to generate REAL extra business. Hundreds of new products and handfuls of new manufacturers successfully enter the market each year. It takes a lot of hard work, good planning, and a little bit of luck but the opportunity certainly is out there. So, get your idea, get your plan, get your 4 leaf clover and get to work!
– Jordan Stone, President
Great article Jordan! I really enjoyed it.
I love the way you have put this together. If companies take the time to review these 10 points and act on them, many more would come through the process with less scars to show for their hard work.