IF YOU HAVE A CONSUMER PRODUCT STARTUP, DON'T WASTE YOUR TIME AND MONEY. LEARN WHAT HAS WORKED SO YOU CAN APPLY IT TO YOUR COMPANY.
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This is a Quora question and here is my answer.
Here is a general list of requirements before approaching retail:
- Have a unique and differentiated product, enough to capture consumer attention.
- Have prior sales history, either online or in smaller retailers to prove your product(s) and brand will sell.
- Have marketing support to help build brand awareness for your product. Analog marketing (TV, radio, print) is always best, but digital marketing will also help. One of my growth secrets is using direct response marketing so that the net cost of my marketing is $0, which allows me to afford to do marketing to build my brand.
- You have to effectively answer if your product will increase sales for the retail category buyer, and will it drive more traffic into the store category. It is expensive and time-consuming to switch out brands and replace with a new brand, so you need to convince the retail category buyer that you can do both. Retail is generally not growing, so if you want to go in, you are really displacing an existing brand (and beating out many other new brands that also want to sell to retail)
- Do you have cash to fund inventory and tradespend? Winning in retail is a long game and you need staying power with cash to be able to fund inventory and retailer tradespend requirements. Likely you will not make money in year 1 of retail. Tradespend averages 13.5% of your costs, so you need to factor this into your forecasting. Some retailers it is much higher – like 25%.
- Do you have experience and the operations to support retail? You want to give the retailer confidence that you can work well in retail.
If you have the above, then contact the retailer and find the category buyer for your product. Ask them what is their process for reviewing new products. Their response will dictate what you need to do from there.
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