Selling to major retailers is a great way to take your business from 0-60 in no time flat. The complexities of selling your products to large retail chains are also a great way to waste a significant amount of time and money if you do not plan properly and do your homework. I personally experienced the tremendous learning curve with my own businesses in the past. Now, at STAR Funding I work with entrepreneurs every day that are hustling their goods onto major shelves. Here are 5 things I have learned to help you secure that oh so valuable shelf space at the Walmarts and Bloomingdales of the world.
1. Create Products That Sell
When you are designing and planning your products with major retailers in mind you need to make sure your pricing strategy, branding, and product positioning fits in with your customers. For example, Target won’t sell your ultra high-end steak knives and Bloomingdales won’t sell your 4 in 1 LED flashlight fanny-pack cooler radio(or maybe they will?). Create a product that appeals to a wide audience. If your products aren’t sellable, retailers won’t let them just sit on the shelf. If a product does not have a clear pricing strategy and product positioning to support it, retailers won’t be rushing to issue a purchase order so quickly. Seek feedback from a wide range of friends and colleagues. Would they use your product? Would they buy it? How do they think it compares to the competition?
2. The first one is the hardest
The first retailer you sell to is usually the hardest sale to make. At this stage of the game it’s important that you make a connection with the buyer and they like you enough to take the risk. After you get in your first store it becomes about selling your success, your data, and positive customer feedback. Now that you have a track record (even if just a small one), you aren’t such a risk, they know you can deliver and your customers like your product.
Keeping that in mind, future retailers are always going to be asking about how successful you are in other stores. So don’t try to sell to your first major retailer just for the sake of it. Pick one that you know your products will do well in. Otherwise, it’s hard for you to quantify why other retailers should take you on. One smart strategy that helps you demonstrate your knowledge of the space and successes is to build a short case study around your successful retail programs. Sharing this information allows your prospective customers to learn more about your products, your strategy, and how you look at the business.
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3. You typically only get ONE shot at this
Make sure you start with a retailer you can handle financially and logistically. If your financing isn’t lined up or your production isn’t ready to ramp up then you don’t want to make promises you can’t deliver. Prior to meeting with buyers you need to make sure your financing is in line and you know the capacity of your vendors. Speaking with an experienced lender in the space like STAR Funding can help you build the financial strategy to fulfill these larger commitments. Finding a company who can finance your purchase orders(purchase order funding) and your receivables(accounts receivables factoring) is typically the best bet as working with a single lender will usually provide for the easiest processes and greatest availability of capital. The last thing you want to worry about is finding the money to produce goods for an order that’s coming due.
In additional to financing and production you need to be prepared to service your clients after the sale. Your job doesn’t end when the products hit the shelf. You will have customer calls, returns, and other issues to deal with. In today’s environment your customer service after the sale can make or break your brand. This increases in significance with Retailers like Amazon and Target where online shoppers rely heavily on customer reviews while making purchase decisions.
4. Know your competition.
When you go into your meetings with buyers, be prepared to convince the buyer why your products will outsell your competitors, or at lease how your products compare. As a young brand the retailer isn’t going to expect you to outsell Sony or Chobani, but they will expect you to know where your product is positioned and how your product relates to the major brands. It’s important that you understand how your brand relates in terms of price point, brand positioning and target market. You will also want to know where your products will be placed and have some understanding on how the retailer approaches the specific categories. In the end, the more you know and understand the more willing the buyers will be to issue a Purchase Order.
5. Do your homework on the retailer prior to the meeting.
This means visiting the stores and their websites to get an idea of where your product will be positioned, the retailer’s sales, discount, and pricing strategies. A simple google search will also provide great feedback on the retailer by professional industry analysts. This information is incredibly valuable to you as a new brand in understanding the retailer and how they operate. Just like with understanding your competition, the more intelligently you can speak about your familiarity with the retailer and their strategies the better you will be able to sell your way onto their shelves. Have a strong understanding of your product category and be prepared to answer challenging questions.
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About the author — Avi Levine is an entrepreneur, and commercial lending specialist. Currently, as a Vice President at Starfunding.com , Avi focuses on financing apparel companies, consumer products and international trade through factoring and purchase order finance. Having worked directly for companies such as as Bonobos and Equinox Fitness and having financed numerous others Avi understands the challenges of growing a successful business in today’s environment. For more information or questions on funding for your business please contact Avi at firstname.lastname@example.org, and connect with him on Instagram, Twitter or LinkedIn.