Both Sides of the Retail Table

Advice for Entrepreneurs Pursuing Retail Success

Startup Incubator for Purpose-Driven Product Entrepreneurs

Romy and I would like to share with you our passion project, in case it can help you or social entrepreneurs (product-based) you know. We have always been guided by our passion to help other entrepreneurs. More recently, we’ve taken special interest in supporting purpose-driven product entrepreneurs. We hope to do this through Purpose Incubator (www.purposeincubator.com),  our 5-week startup incubator which kicks off on April 7th. What is it? Purpose Incubator advances purpose-driven entrepreneurship by supplying resources and education to foster long-term business growth, as well as to inspire the next generation of social entrepreneurs. We’ve gathered industry experts including angel investors, sales reps, PR/Marketing gurus, Finance/Accounting professionals, retail buyers, and more — all of whom give a perspective on how to balance Purpose with Profits. We have also invited experienced social entrepreneurs who have “done it” to share the unique challenges they faced in building a socially responsible business and how you can over come them. There is no money to be made for us here. But there is tons of reward and joy this effort brings us. Please share our website with any early stage startup who can use help understanding the fundamentals of scaling a consumer products business. And encourage them to […]

The Buyer’s Perspective: Be willing to walk away from a deal because it’s not a win/win

I wish more vendors/brands were willing to say “no” to retail buyers because the deal didn’t benefit them. For the ones who did say no to me and stated their reasons, I respected and admired it. One reason I would hear would be because the brand was afraid of deteriorating their brand and angering their more premium retailers. Obviously I’d try to work with them to come up with a solution that would preserve their brand equity and my plans for them in my assortment, but if we couldn’t reach a win-win agreement, I understood the reasons why and never faulted them for it. I WISH more small vendors said “no” to me. Here are some occasions when vendors SHOULD have said no, but didn’t. 1) Vendors who were in no financial position to be doing business with a major retailer. For example, those who agreed to sell to Target but had to stretch themselves to fund production. Or those who could not handle the cash hold we placed on new vendors. Yes, retailers hold back some of your invoice payment (amount varies, but it can be as low as $5,000 or as high as in the tens of thousands) […]

From the Entrepreneur’s Perspective: Be willing to walk away from a deal because it’s not a win/win

It’s not easy to turn away business, especially if it’s from an account you really wanted to land. Been there, done that.   But, you have to be willing to walk if it’s not generating some value for you. That doesn’t have to necessarily mean that this account is profitable, as the value could come in another way. As an example, perhaps this account brings you credibility so it paves the way to landing a bigger, even more impressive account – that is profitable. Just factor that this account is costing you and that you know what that cost is – and that you are prepared to absorb this cost. Maybe it’s worth holding onto for the short and/or long term.   However, if you can’t justify this account as a segue for another bigger/better account and/or it is not profitable, time to move on – without them. It may feel difficult to let go, but your resources are better spent elsewhere. When one door closes, another opens. Time to make another value-added door open.  

From the Entrepreneur’s Perspective: What does it mean to be a good retail partner? Let’s start with: “Do NOT be a pain in the butt.”

You are responsible, agile, and pro-active. You are not a pain in the butt to work with (i.e. you balance reaching out, but not too often and your buyer enjoys working with you and/or your rep). You have a marketing plan in place and are executing on it so that you are driving sales to your product. You add value to the buyer’s category.   Buyers are charged with many objectives. These include, but are not necessarily limited to: Making as high margins as possible. Turning as many units as possible. Offering a product assortment that meets their customer profile/audience. This includes “growth brands” (typically the big branded name products; the “tried and true”) and/or “demand products” (niche products). Maximizing their and their colleagues time (obviously a finite resource) – thus vendor and sku rationalization is a consideration. So what does this mean to you? You need to offer the buyers an enticing wholesale cost. You need to support the brand with marketing dollars – which means you are investing in in-store promos (yes, buyers are evaluated by this metric, too) and out-of-store opportunities. And, you need to be communicating with the buyer about what you are doing and when […]

From the Buyer’s Perspective: Must I agree to retailer marketing BEFORE they will consider our products?

First, let’s explain what “retailer marketing” means. Retailer marketing refers to vendor-funded marketing programs specific to a retailer. This includes circulars, advertising on their website or mobile app, price promotions, digital coupons and more. See an article on my website about this to better understand what retailer marketing is. So do all retailers require you to specify which programs you will fund BEFORE they consider your brand? Some will and some won’t. There are no standard rules on this; it varies retailer to retailer. As if working with retailers wasn’t hard enough! Sometimes it is enough to tell retailers that you are open to doing vendor-funded retailer marketing and leave it at that. That is enough to get you into the final rounds of consideration. In fact that is true of most large retailers. They are probably more concerned about you agreeing to markdown coverage before their in-store marketing programs. In my experience at Target and selling to Walmart, you don’t discuss marketing programs until well after receiving your commitment. Sometimes not until your product launches in stores. But you do agree to markdowns and other chargebacks (warehouse allowances, store allowances, etc.) prior to the PO being issued. In other […]

From the Entrepreneur’s Perspective: Must I agree to retailer marketing BEFORE they will consider our products?

There is no cookie cutter approach to marketing. There are so many variables that will impact where you put your marketing dollars. Defined objectives, within your budget, must lead the decision making. To add complication to this strategic and creative process, every retailer offers different marketing programs – at a cost that can break the bank or be given to you for “free” (more on this below); how much you can afford to spend AND how much your direct and indirect competitors are contributing to these in-store marketing programs within the same category; how saturated your category is/isn’t; whether your product is offered chain-wide or regionally; and the list goes on. As Vanessa will point out in her blog on this same topic, this is not Marketing 101, and because this blog is already too long, I am hitting on just some of the key points that you should consider when evaluating what in-store marketing programs you should, or can, agree to before or after you land an account.   In-store marketing programs Every retailer offers different in-store marketing programs. And, every retailer offers them at different prices. And, every retailer implements those programs differently (i.e. some are implemented well […]

From the Entrepreneur’s Perspective: WHEN, if at all, do I approach a buyer about markdowns/discontinued items?

The answer to this question is probably that you do not. But, you must be thinking about this topic. It’s about risk management and it has an important place in your upfront considerations on how many skus to launch with a retailer. And here’s why. Backing it up just a second, just in case you do not know what I am talking about. Markdowns are what happens at retail when a product is discontinued. Different retailers treat markdowns differently in terms of length of time an item is marked down and who absorbs the cost of the mark down. If you bring up this topic, it creates doubt in a buyer’s mind (ie. the buyer is then thinking to him/herself, why is she/he worried about a discontinued item?), even if this is a logical conversation that one should be having. And the reason you want to be having this conversation (even if it’s in your head and amongst your internal management team) is because when dealing with the larger retailers you are doing business based on a guaranteed sale (that means you are doing business on consignment – the retailer holds YOU responsible for whatever inventory does not sell). As […]

From the Buyer’s Perspective: Tips for Being a Good Retail Partner So Your Product Stays On Shelf

Tip 1: Regularly update your buyer on your sales performance. Provide monthly recaps. Buyers don’t have the time to dig into individual SKU sales regularly so your regular analysis is much appreciated. This also allows you to own the analysis and control the story you are telling. Influencing how the buyer perceives your brand performance is important. Obviously, you should not craft a story that is not believable or a misrepresentation of the facts. But you are the only person in position to craft an optimistic story. Tip 2: Supplement your monthly sales recaps with observations and recommendations. The first few months in store is a lab experiment. You can “test and learn” which marketing tactics work, which in-store promotion yields the greatest ROI, the ideal price point, which items are most popular, and collect feedback about merchandise placement and display. With this information, you can make recommendations on how to improve execution (on both your end and the store’s side). Your retail buyer will appreciate your problem-solution thinking, proactiveness and your “co-piloting” of her business. This elevates you from “just another vendor” to “business partner” quickly. How I have applied Tip #1 and Tip #2 with brands: With one […]

From the Entrepreneur’s Perspective: How I Got A Second Chance After Getting A “No”

So here’s how I got a meeting with a major retailer in an assortment where Psi Bands had been previously booted. I was so inspired by this blog post, “Target Pitch: 3 Ways This Little Brand Turned Moderate Sales Into More Stores,” by former Target buyer, Vanessa Ting, that I took action. Background: Crunching numbers is not my favorite thing. Give me an opportunity to market, I’m all over it. But, it’s not about what I like or don’t like. Understanding the numbers and how to make that data work FOR our businesses is critical to the success of any business. As such, I dove deep into some recent market data that I obtained. So deep that I had lunch at 3pm and thought my eyes were permanently placed in the back of my head. A small price. Here’s what inspired me about Vanessa’s article, and the outcome of my efforts. Inspiration: I loved that Vanessa told us to lead the story, a real story, but nevertheless the story we wanted to positively tell. Remember what I said above: I love marketing. I can tell a story, and so can you. As a former grant writer, I used story telling to […]

From the Entrepreneur’s Perspective: Tips for Being a Good Retail Partner So Your Product Stays On Shelf

You have heard Vanessa and I preach about being a good retailer partner. Getting on the retail shelf is one accomplishment; staying there is another. Past tips have included the importance of customer service, inventory management, and quality product. http://tinyurl.com/qeyf2ta and http://tinyurl.com/qjvsfax In Vanessa’s most recent blog post, “Target Pitch: 3 Ways This Little Brand Turned Moderate Sales Into More Stores,” she provides even more tips for elevating you from “just another vendor” to “business partner”. Following are some more tips to earn your keep on the retail shelf – so that your buyer sees you as a “partner”: Answer the question: What have you done for me lately? Tell your buyer in a bite sized recap what you are doing to drive sales to their doors. To update my buyers about Psi Bands, we create a monthly retailer newsletter that highlights the best press, marketing efforts, and/or social media outcomes from the month prior. This visually impactful recap allows my buyers to quickly see that we are building brand awareness, driving traffic to their stores, and keeping them informed – without bugging them too often. If you do not yet have regular press and/or are not investing in marketing programs, […]