By Vanessa Ting Before you are ready to pitch to a buyer, there are “must-haves” you should first have in place. These “must-haves” are all components of a larger business case you are building to convince buyers they need your product in their assortment. And these components take time to build, which is why it is important to address them in our blog now!
In short, the big question to answer before pitching to a buyer is – how does your product benefit retailers? Here are the 5 “must-have” items needed to build your business case and prove why your product meets the needs of retailers.
- Demonstrate your product or brand will drive the retailers’ financial performance. Buyers representing large retailers are goaled on the financial performance of their assortment. This means they make buying decisions based on how it will earn them more revenues and profits. For you, this means knowing the margin requirements of each specific retailer you want to work with, as well as an understanding of their pricing strategy and how your product fits in to this strategy. Also, having proven sales history in other reputable retailers demonstrates your potential selling power and will enable you to build volume projections that demonstrate the market opportunity of your product. Your pitch presentation should include a slide that shows your sales history at other retailers and the sales forecast you have projected for this retailer.
- Defining your consumer target. Knowing who your target audience is - from their demographics to their attitudes, shopping behavior and preferences (this is when doing consumer research pays off) - helps you show the type of shopper your products will bring into the retailers’ store. Align this with the retailers’ shopper strategy and you’ve checked another box in building a compelling business case. In your pitch presentation, include a section that profiles your target consumer.
- Build your brand’s awareness. Having a good product is not enough. It needs to be backed by strong branding and effective marketing. Good branding lends itself to future line extensions which give buyers’ confidence that this buyer-vendor relationship has longevity and can drive future business. Strong branding creates shelf presence and makes it easier to shop the shelves. And this fuels category growth, which translates to more shoppers and revenue for retailers. Also, any marketing tactics like advertising or promotional deals you can offer will help drive traffic to stores – either through new shoppers or more frequent or bigger store trips. You can demonstrate this in your pitch presentation with slides showing the success metrics of past marketing and promotional programs and recommendations for the programs you will create to drive customers to their stores. Also include a slide that shows all the media outlets that have featured your brand to demonstrate your broad reach.
- Mitigate risk. Buyers are risk averse, especially anything that may erode sales or damage their stores’ reputation. In addition to mitigating sales risk through consignment deals, consumer testing, having a proven sales record, it is also important to make sure your product meets product safety and quality testing criteria. I have seen many vendors lose shelf space and business because they could not meet the stringent testing criteria many major retailers require. If you manufacture a children’s product, make sure it meets CPSIA standards, but also the retailers’ criteria for drop testing, transportation testing, and the list goes on. Sales reps, other product entrepreneurs and retail consultants can help you figure out what these requirements are. A simple slide that shows the testing and safety standards you meet will quickly wipe away any concerns a buyer might have.
- Spend money. Getting into major retail is expensive. You need to have the infrastructure built and sufficient cash flow. More on this in an upcoming blog. But be prepared to order hundreds of product samples before your first order. You will need samples on hand to send to buyers, testing labs, vendor reps, retail consultants, magazine editors, PR reps, for product sampling programs, and more. Often times these samples are expensive to produce in low production quantities. Don’t skimp here; this is a necessary cost of doing business with retailers. Also spend the money to get your branding and packaging right the first time around. Changing these things mid-stream will not make your consumers (or buyers) happy. Make sure to bring samples of products to your pitch presentation and have enough to leave behind for everyone in attendance.