You may be wondering about how does a new company gets their products into retailer storefronts in the USA?
You may have a perfect retail product:
- Small volumetric footprint so that it occupies very little space on retailer shelves,
- has high margins so that retailer can make good money on it
- does not require special care such as frozen or refrigerated products (or you will have to pay hefty slotting fees!)
- high volume sell through possible (such as consumables) or suitable for impulse buy
Inspite of have some or all of the advantages above, you will still need to successfully get your product into retail and that requires some strategizing on your part.
I. Visit a trade show
This one is obvious, right? almost all specialty product segments have a trade show of their own, start by attending them and see how your competitors are selling their products. If you have to pick one trade show to attend due to budget restrictions, than I will suggest that you atleast go to the Retail’s Big Show, a flagship industry event of the National Retail Federation (NRF) that attracts over 30,000 visitors that includes employees of almost everyone involved with American retail industry.
I know a lot of people will tell you to dive right in and try to exhibit at one of the trade shows. I would advise against this until you are really ready on your go to retail strategy since it’s quite expensive to exhibit at one of the trade shows, and you should only do that once you have a strategy in place on how you will benefit from it.
Sell directly to retailers
In this case, you as the manufacturer of a product decide to sell it directly to the retailers. The advantage of this approach is that you are in complete control of your destiny, and direct contact with retailers not only allows you to potentially save some margins, but will also give you a more direct feedback especially if you sign up small retailer accounts in additon to going after giant chain stores.
Open manufacturer’s showroom: Most manufacturers have permanent showrooms somewhere — near their facility or more likely in the larger marketplaces such as New York, Los Angeles, Dallas, and Atlanta and this is where you can meet retail representatives and push your product lines.
Have dedicated sales staff: These are sales agents that are on your company’s payroll as well as get commissions for every sale they make. They can meet with independent stores buyers at the trade shows or at their stores and close a sale there.
trade show: I mentioned it separately upfront since we have seen an over reliance on trade shows and that may have worked well in pre-covid world, but now its imperative that you have a digital as well as in person face to face in addition to trade shows to get your product on retail shelves.
Websites: having a robust ecommerce presence (Ebay, Amazon etc.) isnt just to sell directly to consumers but it will also serve as an additional way retail buyers will find your products. Just like manufacturer showrooms, the idea isnt to make individual sale through your website but letting consumers leave feedback and demonstrate some traction that will convince the retailer to engage with you further.
Filling out product profiles at retailer websites: This is quickly becoming a popular way of initiating first contact with major retailers. All you have to do is take some high quality photographs, fill out basic information about your product line such as number of SKUs, weight, size, upload some pictures onto the potential supplier webportals and let the retailer buyer in that category contact you to take things further.
These portals such as Bed, Bath and Beyond’s RangeMe or all ask for different information about products.
Another way to get into a store is by buying store location data from a reputed source (like Specrom Analytics retail store locations data), that will give you addresses and phone numbers of all the store locations of a particular retailer. Next, you can start contacting each store to get more information on decision making process of each retailer and the buyer responsible for the retail location and your product category.
Hire a Manufacturer representatives (rep)
These are independent contractors work for one or more manufacturers strictly on commission. The range in commissions paid is from 4 percent to as much as 20 percent. The more popular the line, generally the smaller the commission.
If the manufacturer is new and the representatives — “reps” for short — are well established, they’re usually paid at the top end of this scale.
The major advantage of doing business using a manufacturer’s rep over a direct salesperson is that they have more broader relationship with retailers since they usually are selling dozens of product lines to them.
Some of the manufacturers’ reps have become so large that they form their own companies and have large staffs of employees. These firms always have permanent showrooms and offices, generally at the trade center.
Work with Distributors
There are some product types that are just not suited to any of the approaches described above since the entire distribution in that geography is tightly locked in by an existing distributor. if you happen to be in one of these product categories such as frozen food, low calorie drinks etc. than it is highly recommended that you directly find the top distributor in that space and pitch to them to carry your products instead of trying to get piecemeal distribution of your product.
Some years ago we were hired to develop strategy for a chopstick manufacturer who was looking into breaking into selling at high end asian restaurants in the USA. They had spent considerable expenses in developing an in house sales team for a product that had almost 80% distribution via a distributor. The end customer didn’t even care about where they were buying the chopsticks from as long as their distributor provided them at a competitive cost.
Its areas like this where you have to work with distributor and if you product has better margins than what they are selling now, and if you can supply them at the scale they need, than I think they will definitely consider meeting with you and discussing your proposal in detail.