Getting a sales rep to take you on as a client is one of the best ways to get your products in retail. With their connections and expertise, they can cut through red tape and get you in the rooms that matter.
However, this also means they need to be selective about which products they choose to represent. You may be excited about your product, but you need to excite the reps as well. Before you approach reps, make sure you’re not falling for any of these common pitfalls which will turn reps away from you.
1) Your Price Is Wrong
Pricing is a delicate dance with many moving parts. At minimum, your price has to cover all your costs. This includes your variable costs like materials, packaging, and salaries, as well as your fixed costs like rent and insurance.
However, if you simply cover costs you’ll never make a profit, so your price also has to include a margin on top of your costs. However, it can’t be too high, or else people will turn to your competitors.
Reps understand the tug of war between price and cost, and if your products are too high to be competitive, or too low to be sustainable, they won’t be interested in repping you.
What The Reps Say:
As someone who has placed thousands of products in retail chains, I can tell you that your cost can be no more than 20% of MSRP/retail. Therefore if your item retails for $6.99, then your cost can be no more than $1.40. You will need this much margin to pay all the expenses associated with retail placement and still make a decent profit for yourself.
The money you spend should fight into your budget, and you need to add the cost of packing as part of the product cost. Remember the most important thing: all costs to get your product to market should be passed on to the consumer. For example, if the cost to make the product is $10.00, the packaging is $1.00, shipping is $3.00, and marketing is $4.00, then the price of the product should be $18.00. From there you figure out your margin. So if you want to make 35% ($6.30), the wholesale cost to B to B should be $24.30. If you’re selling direct, it could be anywhere from $48.50 to $24.30.
2) Your Product Isn’t As Unique As You Think It Is
Have you ever been to an elementary school play? Did you enjoy the acting? Are you sure the quality of the performance is really why you had a good time? Would anyone ever go to an elementary school play unless they were close friends or family with someone involved?
As tough as it is to face, it’s as hard to be objective about your business as it is to be objective about your own child. Just because you loved Timmy’s performance in ‘Vegetables Come To Town,’ doesn’t mean anyone else will.
Your product has to have at least one distinguishing factor to be a success. Whether it competes on price, innovation, style, branding, or anything else; it has to stand out from the pack significantly. If your product doesn’t add value to the market, reps won’t be interested.
What The Reps Say:
Often people haven’t done their research. They think they have, but they haven’t. They say, ‘We’ve got this product that no one else has, and everyone loves it!.’ And I’m asking ‘Well how do you know no one else has it?’ And they’ll reply, ‘Well, I went into a Home Depot, and I didn’t see anything.’ So I explain ‘All right, well Home Depot doesn’t sell it, but I saw it in Walmart, or I saw it on Amazon.’ And they go ‘It’s a little bit different,’ and I go ‘Well I don’t think it’s much different and I’m in the industry. Consumers wouldn’t be able to tell, and a buyer won’t displace a current major supplier for this one item that isn’t much different than what they have today.’
So they don’t do the research, they don’t know price points, and then they’ll state that ‘Everybody loves it,’ and I’ll ask further, ‘What do you mean that everyone loves it?’ And they’ll reply, ‘Well it’s a mechanics tool, and mechanics love it.’ ‘Well, have you done a survey or have any research to back that up? how many have you sold?’ ‘Well, we sold 10,000 units over the last 5 years.’ That sounds great, but at retail that’s not really a lot. If you can’t sustain yourself as a living, that’s not a lot of sales.
Overall, people make generalizations because they’re excited and they’re passionate, and that’s important, but they’re not realistic about it.
3) The Packaging Is Bad
Whoever said ‘don’t judge a book by its cover’ wasn’t in sales. And by ‘whoever,’ I guess I mean author George Eliot because his novel published in 1860,The Mill On The Floss, is the first recorded use of that phrase.
Anyway, appearance judging is most definitely a part of what sales reps use to decide whether or not to rep your product. Packaging has to indicate to the customer a whole host of things, including price, branding, and the target market. If your packaging isn’t up to snuff, reps won’t be incentivized to work with you.
What The Reps Say:
The product has to look and feel like it could be successful, and a lot of that has to do with packaging and presentation.
So if the concept makes a lot of sense but they’re not presenting it well, it’s not high quality. Yesterday on our site we were talking about a cool concept, but the marketing didn’t explain the product, and the packaging was pretty dated and not representing what their target market wants to buy.
It was a cool concept, but they weren’t presenting it well, and I’m thinking, ‘This is going to be a tough sell.’ It’s not the right look for the customer who’s buying this, it’s not explained well, they don’t have many images on their website, it just wasn’t done right.
4) You Have A Poor Web Presence
Gone are the ways of business cards, pamphlets, and catalogs, for they have been replaced with the ever watchful internet. Every business today is expected to have at least a website, and more often than not some social media presence.
Your website needs to hit several criteria before it functions appropriately and seems legitimate. Is it hosted on a relevant .com domain, and not some weird blogspot.mybusiness situation? Is it simple and clear? Is it easy to find out what your business is, and how to contact you? Are there large photos and/ or videos of your product?
If you have no web presence, or your website looks unprofessional, reps may assume you don’t have what it takes to be a functional business person.
What The Reps Say:
Your website REALLY REALLY looks like you are selling snake oil. ANY respectable rep who sees your website will flee from you in the other direction. Your graphics are misshapen, and the photos are horrible! Your packaging looks like it’s from the 80’s too. Time for a serious update! All of your marketing is PAINFUL to view!
The first thing a good rep will ask you is “What’s different about you?”
(Most respectfully) I went to the front page of your website and began to read the section entitled “About Our Skincare.” The first couple of paragraphs seem like they could be on ANY makeup website. The testimonials in the scrolling section were nice, but nothing said to me “Our product is different from everyone else because of X, Y and Z’.
Imagine that at any given time there are HUNDREDS of companies trying to get their products placed into major national makeup retail chains. Now imagine that you’ve found a manufacturer’s representative who has relationships with the retailers you admire – Sephora, Ulta, Blue Mercury etc. The rep is going to want to know immediately what unique value you offer the market? That is, what makes you different enough that retail chains will DROP other brands from their line up in order to include you?
Your website should be telling me this information 10 seconds after I land. I should have said to myself “Wow, these guys really have something different” but I struggled to figure out what that was that is different about you. It should have been in my face. This is your value proposition – what is unique about you to the market. And this is what will convince a rep that they need to do business with you and take on your line instead of another brand.
You will have to show whatever retail chain that what you have to offer is significantly more advantageous to them than what they are selling now because of features, quality, price, demand in the market etc.
5) You Don’t Have A Patent
Not all products need a patent; makeup, clothes, and food rarely have them. However if your product includes new technology that will inspire copycats, a sales rep might not be interested before you protect yourself.
If you are getting declined because of this reason, take that as a lesson that could possibly save your business. If you’re the inventor of new technology, you had to spend valuable time and resources creating your product. Take the time to protect yourself before you enter to market and get ripped off.
What The Reps Say:
I spent a little time looking through your website and examining your product.
My first question is – do you have a patent on this item? If you don’t and a major competitor company sees it they can simply order one and copy it. If you do have a patent, why it is not clearly listed on your website?
6) You Only Have One Product
It’s completely fine only to have one product, it’s where every business starts. Additionally, once you have your product, you should absolutely begin selling it wherever you can. However, there are certain categories where buyers are going to be much more interested in stocking you if you’re part of a product line, instead of an individual one. If you’re in one of these categories, reps may be uninterested in you until you show you can provide an entire line of products.
What The Reps Say:
A single product brand gets lost on a retailers shelf. I would aim for at least 3 products or more before I would approach a retail buyer.
Also, a ‘program,’ may also be a product package, where you offer a good sampling of your best-selling products at an introductory price. This helps the buyer know which products are more likely to sell for them plus they get a great sample of your line.
Shelf space and managing vendors is an ongoing challenge for most retailers. Buyers like to know that when they invest in a line, that it brings value and brand strength into their stores. It is tough to make money for a brick and mortar retailer with a single item unless it is one of those rare one in a million, walk off the shelves by the hundreds type of item. When retailers review a line they like to see depth, longevity and broad-based appeal. That usually comes with a variety of products and ongoing vendor product development.
If you haven’t been able to get a manufacturers rep so far, don’t give up! Make sure your business is putting its best foot forward, the most important thing overall is that you come off as a professional with an excellent product.
Ask family and friends, as well as large Facebook groups without a personal stake in your success what they think of your product, packaging, and website. Keep tweaking and refining until your product gets the interest you know it deserves.
Very straight forward. Jv
Thank you for reading!
Very enlightening. I’ve checked off the points raised and would love to speak to a potential sales rep.
Please feel free to make an account if you don’t already have one. From there you can message reps directly!
“the price of the product should be $18.00. From there you figure out your margin. So if you want to make 35% ($6.30), the wholesale cost to B to B should be $24.30”
You math to calculate margin and your wholesale price is incorrect. The formula for figuring out Wholesale price given a Cost and margin % target is Cost ($18.00 / (1-target margin %)) = $18.00/ (1-.35) = $18.00/.65 = $27.69 ; Your Margin $ would be $27.69 – $18.00 = $9.69 ; Your margin % = $9.69/$27.69 = 35%
Thanks for taking the time to calculate that math. That quote comes from a sales rep, and was intended as a way to explain the concept of how pricing works, rather than the exact formula businesses should be basing their prices off of. I really appreciate your attention to detail though!
From a rep’s point of view, you must be able to show that you are able to ship orders promptly and completely and that you stand behind your products. You also must pay an attractive commission and pay it on a regular basis.
Good to know! Thanks for your comment!
Good info and pretty much spot-on. I think one major factor that is not listed is “Commission Structure”. How much does the rep get paid and how often?
It can be the most unique, innovative, “must-have” product but if there’s not enough of a commission for the Sales Agency, then we’re definitely not interested. Hate to make it sound like all we care about is making $, but it is sincerely a significant element of our decision-making process.
Mmm, that’s really good to know! Thanks!