Why I dislike launching a product direct in retail, instead of selling online first, and some tips if I can only launch a product this way.
I really dislike going straight to retail or through other resellers.
- Sell online direct to consumer first because you can start small and test your messaging, pricing and acceptance of product;
- You want to have these items really dialed in before retail because you cannot play around with pricing, and it is expensive and time consuming to switch out packaging;
- Plus if you don’t get good traction in retail, you will get kicked out and may not be able to come back;
- Selling D2C is much more profitable and can help establish profitability to afford retail, which is rarely profitable in the first year.
But, I am currently working on a product that is not a good product for shipping direct to consumer. It gets damaged easily and can lead to more product returns and disgruntled consumers.
I can’t do smaller pack sizes for this type of product.
I might design packaging to help prevent this, but that may be cost prohibitive.
So what do I do?
- Do as much research online to understand what consumers like and don’t like with existing products;
- Research this through product reviews and in online discussion groups and forums around your product category;
- Know what pricing currently sells;
- Look at the copy on competitors’ websites and packaging to see what they are doing;
- Hard to know which competitors are doing well. If you know who is doing well with sales, you can model their copy, pricing;
- You can find this out with some fuzzy accuracy for some brands via tools like SimilarWeb, but it’s not perfect;
- Really know how your product is positioned against competitors so you have some very clear and hard-hitting differentiation when approaching retailers;
- Have a marketing plan and budget in place;
- Without sales history your differentiation and marketing budget will help sell into retail.
There is also been no innovation in this particular category I am targeting with this product, so I can sell to retailers how my product is innovative (actually, it is) and how the category needs an innovator like me to grow (the category has been flat).
The other products are also made with chemicals, whereas mine is not, so that is also a potential selling point to a retailer.
Also, the company behind this product has ample funding, so they can afford to do it this way and absorb setbacks if their product, pricing or packaging is not right in retail. But if they had no cash, then I would absolutely not recommend this route.