Have a product you know people will love? Is it ready for retail? Many new brands think that getting into retail is all about contacting the right retail buyer: “If the buyer just gets to see my product, then I’ll get the order and a life of riches and leisure.” Unfortunately, this is a myth that fills landfills with once-promising entrepreneurial products. Going directly to the buyer with a do-it-yourself mindset sounds compelling, but it will probably end in disaster. You need to be well prepared and you’ll need a partner with expertise in retail distribution. Stores may love your product, but if they think you may fail to fulfill large orders or skimp on process management, then you won’t have a chance.
The reality is that the retail machine was built for Procter & Gamble and Unilever, and not for innovative startups. The good news is that this is changing. With the rise of the Millennial and Gen-Z generations, the majority of consumers now favor entrepreneurial brands over last century’s conglomerates; this is why the majority of consumer product growth is coming from early-stage brands. In addition, there are great new software tools that can make the retail gauntlet less daunting. We’ve put together this list of tips to take the mystery out of retail distribution, and we hope you can use them to become the next great global brand.
1) Hire a manufacturers’ rep. Don’t be fooled into thinking you can get into retail without a professional. Beyonce and Pearl Jam needed an agent to make it big, and you need one, too. If you go to a buyer without professional sales and distribution expertise, you’re unlikely to get an order, and if you do, you may end up agreeing to terms that can bankrupt your business. The agents that help brands succeed in retail are typically called “manufacturers’ reps”. The good news about manufacturers’ reps is they are paid through commissions on sales, which means your selling costs are minimal until they get your product flying off the shelves. Reps also tend to have existing product lines with key retailers, so your new product can piggyback off the success of other, complementary brands. Reps typically spend their entire careers working with the same retailers in a specific category, and you should leverage their deep relationships and expertise to accelerate your growth. You can find the best reps for almost any category at Abound.com where you can post your product and start connecting with reps in about 2 minutes.
2) Beware of Direct-to-Buyer Spam Traps. The internet is all about cutting out the middleman, right? So why not take a shortcut and find a website that promises to show your product directly to all the big retail buyers? If you do this, you might as well purchase an ad in the yellow pages too. Just like the moldy, decomposing phone book that’s been sitting by your mailbox since last September, no one will see your brand on the direct-to-buyer websites. Some overwhelmed retail buyers tell startup brands to stop pestering them with emails and calls and post on one of those websites instead; in other words this is a nice way to say “unsubscribe” to well-meaning and determined entrepreneurs. Don’t pay your hard-earned money to join a spam folder.
3) Retailers will judge a book by it’s cover. It’s incredibly common for entrepreneurs to skimp on product packaging, assuming that the product will speak for itself. This just isn’t reality. Packaging is not only important for luring consumers to your product, but also for convincing buyers it can efficiently fit into their scarce shelf space. More important, it shows retailers that you’re serious and ready for success. Skilled designers and packaging printers are a must. There are several websites, such as crowdspring.com, that can help you get started here.
4) Build a polished website and a press kit. If you’re trying to build the next great consumer brand, there is absolutely no excuse for not having a website. Purchase a domain name, hop on Squarespace and get it done. In addition, if you’re really serious, hire a professional photographer to take pictures of your product and offer a press kit on the “About” page of your website. While you’re at it, make sure your email domain is the same as your website (you can do this through Google or your domain provider); if you email a retailer with a yahoo or hotmail domain, you might as well change your email address to “firstname.lastname@example.org”.
5) Data and buzz sell products. If you’re a new brand, you’ll need to convince retailers that you have a budding consumer fanbase. This is a bit of a chicken-or-egg problem since it’s difficult to show sales data without a retail presence. Crowdfunding campaigns and direct e-commerce sales from your website can be helpful for getting some early momentum. In addition, a growing social media following on Instagram or Facebook can serve as low-cost mediums for generating buzz. Consumer feedback on your product from these sites can also help you with targeting the right demographic, pricing, and designing version 2.0 of your masterpiece.
6) Know your product’s value proposition. Just like a screenplay writer you’ll need a good elevator pitch for your product. Retail buyers are generally dealing with finite shelfspace, and even e-commerce giants need to limit the brands they will actually promote to consumers. As a result, your product has to fill a need for the retailer with a unique “value proposition”. Will it expand the retailer’s customer base? Does it satisfy a need that the retailer’s typical customer will have? Is the product a superior substitute for a product currently sold by the retailer’s main competitor?
7) Make sure your product is retail-ready. You’ll need to make sure your product is UPC/EAN compliant and you should be prepared to connect with an EDI system. If you don’t know what any of these things are, don’t panic, but definitely hire a manufacturers’ rep to help you. UPC/EAN compliance is simply obtaining barcodes for your products, and you can start here. Manufacturers’ reps can also help you with EDI preparedness. EDI stands for “electronic data interchange” and it is a standardized data exchange format that allows the retailer to automate order flow, and while it makes life easier over the long-term, it can be a real short-term hassle.
8) Know your category and target customer. Are you focusing on haute couture consumers or tourists looking for travel gifts? Is your product really a tech gadget, or should it be marketed as a sporting good? Do your research and make sure you understand which consumer category your product belongs in and what types of customers you are going after.
9) Trade shows are still necessary. Trade shows were once the only way to meet the gatekeepers of retail, but with sites like Abound this is not the case anymore. With that said, trade shows can still be a helpful way to hear about the latest industry and retail scuttlebutt, and it doesn’t hurt to meet as many players in your industry as possible. These shows can be expensive, however, so make sure you research the show before you commit. Also, make sure to bring your manufacturers’ rep with you, as they can use this as a forum to get you in front of new buyers and obtain new orders.
10) Be prepared to scale production. If you follow all of the tips listed above, your chances of landing a retail order are very high. With that said, this is meaningless unless you can meet wholesale demand for the product. You need to make sure your manufacturing partner is ready to ramp production quickly, and you’ll need to be honest about your production capability when you meet with the retailer. If funding is a problem, showing a verified retail order to a bank may allow you to obtain a line of credit to get started. Manufacturers’ reps tend to know all of the tricks for manufacturing and procurement, so be sure to keep your rep involved in the process.