The Realities Of Retailer Acceptance
By Scott Allen
For many inventors the hardest challenge they face is selling their invention and getting their new product into retail stores. Having held the positions of manufacturers rep, national sales manager and marketing consultant for companies large and small I’ve covered a lot of new territory. Along the way I’ve taken over 50 new inventions successfully to market and have been involved in the retailer acceptance decision process since 1992. All of which took a massive amount of planning, strategy, hard work and luck!
Before I commit to taking a new invention to market I look at a number of things. First the type of products I look for are new ideas that are unique niche products with mass-market appeal. That in its self is a rare find. Most items are “me too” items that are already in the market so it is very tough to sell them unless they are dramatically better or less expensive than the original item. Another evaluation is to look at a new product as a “solution” and then I ask what is the “problem?” Then I put a price on the “solution” (invention) and then a price I would pay to solve the “problem.” Obviously a $10 “solution” to a $50 “problem” is going to be a winner and the opposite is going to be a failure. `You would be surprised how many new inventions don’t solve a problem or are too costly a solution to the perceived problem.
The fastest ways to get a new item into the market is through catalogs and the internet. This also allows the inventor to test the market before consumer packaging is required. It also gives the inventor vital sales information that can be used when meeting with retailers. Retailers are always reluctant to pioneer a new unproven product. They want proven sales to reduce their risk of the product failing to sell.
What many new inventors may not understand is that a retail store is already full of products. There is no empty space waiting to be filled. Retailers manage every inch of shelf space and know what each linear inch of shelf space generates in sales. They usually review the product assortment once per year. For example, if the invention is a new dental accessory the dental review for a particular retail store may be in January and decisions may be made in March and the new set (Plan-o-gram) will hit stores in July. The retail buyer may average sales of $400 per foot of shelf space per store per year. That means if the new invention is 3” wide (1/4 of a linear foot) it will need to sell more than $100 per store/ year to be better than their average item. If the suggested retail price is $3 then 33 pieces/year will need to be sold to meet the average annual sales. Since the store shelf is already full, the buyer will have to remove a slower selling item with the hope that the new invention will sell more than the item it is replacing.
This can be an obstacle for new inventors with a single new product. Most retailers are not willing to set up a “one item vendor” for a number of reasons. First if the product does not sell and they return it to the inventor after 6 months, the retailer will want their money back. If there is only one item there is no collateral to deduct their money from. Also it is a lot of work to set up a vendor, and since many retailers have over 100,000 products, they could not possibly deal with 100,000 vendors. The best bet for a new inventor is to try and find an existing vendor to distribute their new invention.
There are a number of areas that an inventor can choose to try and save money. Unfortunately too many inventors try to save money on their packaging design. You only have a couple of seconds to communicate what problem your new invention solves or what benefits it can offer. I have seen so many new products that all you can read on the package is the name of the product. This usually doesn’t tell you anything about what the product is or why you need to buy the product. Since the brand name is new, no one will know what it means. Having a photo on the invention in use is helpful and bullet points that highlight a couple pertinent features are helpful. In general the best selling colors are red, white and blue. To verify this think of the leading brands of soft drinks, cigarettes, beer, etc.
Scott Allen is president of Allen & Company and they take new products to retail. You can reach Scott by email at [email protected]
There are many resources available to new manufacturers. One is a publication called Brand Packaging. It is the only publication focused on the marketing impact of packaging. www.BrandPackaging.com
