By Romy Taormina and Vanessa Ting, Authors of Advice Blog “Both Sides of the Retail Table”
Your products are finally off the production line and ready to sell to retailers. But where do you begin? Or maybe your brand is successful in regional retailers but you can’t seem to get your foot into big box retailers. The truth is, it’s not enough to have an amazing product. You also need to have a solid business plan to present to retail buyers.
Based on our experience from both the buying and selling sides of the retail table, and now sharing advice to help entrepreneurs get into national retail locations, here are four pitch strategies we’ve found hit the sweet spot of retail buyers across America.
1. Answer the question, “What’s in it for me?” A common mistake is to focus on what the retailer can do for your product. Expand your thinking! A key to capturing a buyer’s interest is showing them how your product meets her financial needs and strategic vision. Financial needs are usually related to revenue or profit margin. Strategic vision can be corporate goals or growth strategies.
For example, let’s say your company, Friendly Tools, sells manual hand tools that are easy to use, compact for storage and designed with the novice user in mind. Think about the strategies important to the home improvement retailer you are targeting. If their goal is to attract more novice home improvement do-it-yourself-ers (DIYers), the following demonstrates how Friendly Tools’ can rework their retail pitch to align with this retailer’s needs:
- The Friendly Tools brand of manual tools can help drive traffic and sales among your target shopper: the novice home improvement DIYer.
- Friendly Tools can help to increase your top-line revenues with our unique brand positioning of "Made by DIYers for DIYers." No other competitive brand competes in this space, therefore, our product line won’t cannibalize sales of your current products. Rather, we can help you bring in additional revenue.
2. Mitigate retailer’s risks. Retailers are risk averse. They worry about your product not arriving in time, unproductive inventory when your product does not sell, competitors taking market share, leaving sales on the table, and so much more. When approaching retailers, it’s important you have anticipated possible risks to the retailer and have a viable solution to mitigate their fears.
Financial risk is among the most common fear. Your company can offset this fear by suggesting a consignment program in exchange for trying your product. Another idea to alleviate the retailer’s risk of trying your product is to offer a marketing or promotional program to incentivize customers to buy your product at that store. Or if you have the funds, you can offer markdown coverage (that is, money to offset any markdowns taken to move inventory) in the event product does not sell.
3. Don't be a know-it-all. You know your product best. However, you don’t know the retailer’s business as well as they do. It’s wonderful to come across as passionate, but you must also be genuine and likable, and you should actively listen to what the retailer has to say. If you don’t know something, then don’t pretend you do; simply let them know you will find the answer and come back to them. If you demonstrate these key negotiation skills, the retailer is far more likely to want to work with you because you have “heard” and then demonstrated that you are prepared to meet his/her needs. Relationships do matter, so work hard to cultivate this one.
4. Be prepared. You have managed to secure a meeting with a buyer. Awesome! Now the real work begins. And you must be prepared for this meeting. You have done your homework by walking this particular retailer’s store shelves so you know what he/she is currently stocking and how your product is unique or superior. Your pitch deck (preferably a PowerPoint presentation) should include numerous important components, including:
- Where your product is currently selling
- Your unit movement per week (UPSPW: Units Per Store Per Week) at these locations
- Your wholesale and suggested retail prices
- Your recommended assortment and rationale behind that recommendation
- Your marketing plans for moving the product at their store
- Market trends and testimonials in support of your product
As you can see, pitching your product to retailers is not unlike pitching to investors. Covering these four strategies puts you well ahead of the curve and will set your company apart when presenting to these essential distributors of your product.