The holy grail for many manufacturing based small businesses is selling their products through retail channel. YOu may already be selling your products quite successfully on your own website, Amazon or Ebay; but for some products, you can get substantial boost by placing your product on retailer shelves.
This is especially true for products that can be considered “impulse buys” aka things that a consumer doesn’t necessarily know they need to buy but they buy it anyway on an impulse. Almost all the products by the checkout shelves in most stores fit into this category.
These impulse customers are very hard to acquire solely on ecommerce channels since typically customer acquisition there is via Google, Facebook, Instagram, Youtube ads and those are by definition very segmented since we want to minimize our cost of customer acquisition so its natural to only show it to consumers that are most likely to convert rather than targeting very broadly on the hopes of attracting an impulse customer.
All major retailers such as Walmart, Bed Bath and Beyond, Target have people on staff called “buyers” who decide which products get selected for selling in their stores.
Many people mistakenly think that you need to go via distributors or hire a manufacturer repping firms however, if your company is still small enough than it’s perfectly fine to directly pitch your products to retail buyers yourself or though your own in house sales staff.
I. Shortlist target retailers
One of the first steps before you even start your pitch preparations is creating a shortlist of target retailers. I always suggest that you should shortlist atleast 10 retailers that perfect for your products.
Next, rank them on the basis of importance to you and why. When we say importance, we dont mean sales, but rather a more holistic view where you should also consider which retail brands are most closely aligned to yours and ones that will give your product the best exposure and placement in terms of your target end user and your positioning.
Once you have a prioritized list, I suggest you start by pitching to number 10 on the list (the least important) and work your way back from there. It doesn’t matter if you hear a ‘no’ in pitches, the important thing to get is detailed feedback from the buyer and incorporate any suggestions to better prepare you for the next pitch.
Quite a few times, you will also hear that a buyer likes your product, but due to timing, he cannot carry it right away. In these cases, it is quite useful to have that initial relationship established, and you can follow up in six months or so to see if the situation has changed or not.
There is only way a retail buyer will carry your product, that is if you can demonstrate that you understand retailer’s customers pretty well and can give them datapoints on why your product is perfect for that retailer’s customer group, backed up with insights and analysis of sale volumes, market need etc.
II. What you need to know about each retailer
- Prepare a binder for each retailer and compile their financial, annual reports and store locations data. Almost all major retailers are publicly listed entities, hence gathering their financial information aren’t that big of an issue. You can also buy data on store locations, addresses, phone numbers etc. from a major retail store data company like Specrom Analytics. If the information isn’t public than you should aleast give a call to the retailer head office and ask for information. Almost all of them should be happy to provide a some of these datapoints that will be invaluable for your pitch research.
From these you should get an understanding of key retail commercial data such as:
- number of stores
- sales, by category if available
- margin achieved/expected
- profit per square foot
- past 3–5 year’s financial performance across key metrics (sales,return on space, margin etc)
The overall goal of this research is to understand store’s gross and net margin performance, profit per square foot and figure out the trend in recent years (improving or declining). This will help you understand how your product can help the retailer improve on some key metric (margins etc.), delivering a positive impact on their key financial metrics.
- find out as much as you can about the key people, decision makers, and influencers on the process of a retailer deciding to buy from you:
- buying director
- commercial director.
For services, the director on whom your service has most impact in the business and potentially the director whose budget would pay for any implementation.
Lot of this information can be found by simply searching through Linkedin. You can also outsource this to a data company that can provide you a contact list of personnel that fits a particular profile, job title, job description etc. However, you need to be careful about buying such data lists. frequently it can be out of date; to ensure its relevance, you should run some sample Google queries such as ‘buying director of [Retailer]’ and see if any names uncovered via this method is present in your list or not. Another way to spot check contact lists is looking up names in press releases, archive news stories etc.
You need to know a bit about who you are dealing with, what their background is etc. Remember, big organizations can have a lot of internal politics; you need to ensure you speak to all of the right people and are inclusive, to avoid alienating someone. You can also identify if you have any common connections with the retailer contacts – a great ice-breaker is to mention a mutual friend/colleague as long as you’re confident that the person you mention is well regarded; the last thing you want to do is mention someone they dislike! In most retailers all buying decisions, for both products and services, are made by a team, not by an individual, so make sure you are identifying people at all levels – both decision makers and influencer.
What ranges they sell, and how what you offer may either supplement existing ranges, add a new range, or, in the case of services, enable ranges to be better managed. You can get this information from visiting stores or reviewing their e-commerce sites. It’s readily available as obviously it has to be presented for sale to customers.
Learn about what their current customer is saying about their current product lines. You can easily get this data by scraping product reviews from retailer’s website or third party platforms such as Amazon. essentially, the aim of this competitor research is figuring out what are the dislike of the retailer’s current product lines, and how you product fixes it.
You need to analyze the spending power of the retailer’s customers by thoroughly looking at the zipcodes and neighborhoods the retailers store operates in, the average footfalls of the street their stores are located and based on that you should have projections of how much average purchase spending the consumer is making and how many units of your products you can reasonably expect to sell out.
III. Creating a proposal
You may have gotten a 30 minute or 1 hour presentation slot with the retail buyer, however, typically you should also spend time in creating a hard copy of a proposal that can be used as a meeting handout. Alternately, many buyers require you to drop in a proposal before they even set a meeting time so that way they have had a chance to review your proposal and ask you questions in the presentation meeting itself.
Executive summary: a maximum of two pages of letter sized paper that describes the content of the rest of your proposal. This summary should be sufficient so that if a senior manager only read this, and then checked with their team that you lived up to the statements made, they should feel confident to give their team the nod of approval based on the content in this section alone. It’s important that they don’t need to wade through a detailed document; they often won’t as they don’t have time.
Background and Introduction: a brief history of how and why you have come up with this proposal, a summary of the communications you have had thus far, and with whom. Also a brief introduction to your company and to what will be included within the balance of the document.
Core proposal: Explain what you are proposing with complete clarity on:
a. Cost details.
c. any known constraints such as supply limitations, long lead times for some product lines etc.
d. preferred mode of engagement: if you are dealing with a nationwide retailer than be upfront if you want access to specific stores in some test market where you think you will get the best data for measuring traction and sell through of your product. e. details of the key contact person.
Supplementary information – use this section to back up claims made in core proposal with any relevant market analysis, research, white papers, information about your business, credentials, accreditations, key personnel, testimonials, case studies, press coverage – in fact you can outline anything that really backs up your proposal.
- You can point to more detailed documents in appendix such as factory audit reports, QA reports etc. You can attach those as an appendix or make it available on request.
Next steps: outline your expectations with regard to next steps and include the contact details once again, including e-mail, web address, postal address, phone number.
IV. The actual presentation
Once you have finished all the steps above, the only thing remaining is putting together a powerpoint slide deck with all the information gathered and focus all your energies into answering the central question of why does this retailer need your product your service in their store?
The retailers team will genuinely be looking to answer their list of questions and they wouldn’t be trying to purposely try to trip you with questions. However, if you do get stuck with a question than simply tell them to put it aside and you wil get back to them with more info later rather than letting your entire pitch derailed by one question.
The only other thing you can do is relax, be confident and let your product knowledge, passion and hard work shine through in your pitch. Even if you hear a no, you would alteast have had a face to face meeting and the feedback you will get will be invaluable to not only develop future pitches but also improve your product and sales tactics.