Swiss Cheese,
This is really a fascinating question, and one that should be right
down my alley. I’ve been doing marketing consulting for many years,
and have two MBAs in this area. More importantly, I work intimately in
the promotional products industry on a daily basis. This industry is
also known as the advertising specialty industry.
I have strong opinions on what you should do, so I apologize in
advance. :) First some thoughts and considerations:
* Your product is rather novel, and thus the average corporate buyer
is not going to understand it or why they should purchase. Thus, you
definitely need to have this product sold for you by sales people
calling on these buyers.
* Distributors of the promotional products buyers are the group of
sales people you need. As a matter of fact, I can’t imagine another
distribution channel for your product other than this one. And there
are specific steps you need to take to distribute your product through
this channel.
* The promotional products industry is made up of over 16,000
“distributor”. About 3,000 of these are of substantial size with more
than one million dollars in annual sales. The rest are mom-and-pops.
But in both cases, sales people make calls on corporate buyers and
sales managers throughout the country and around the world. This is by
far the main way corporate buyers acquire executive gifts.
* Many distributors use catalogs assembled by their suppliers and
manufacturers. One of your goals is to get in one or more of these
catalogs. Buyers rarely buy products from a one-product company. They
want to pick a variety of items from catalogs.
* A primary function of the sales person in this industry is to make
suggestions to the buyer and to make him or her aware of new products
and gadgets. This industry is very susceptible to the latest, hottest,
cutest item. Yours just might fit the bill.
The other segment of this industry is known as the “suppliers”. These
are either manufacturers of products (Bic Pen, etc.) or resellers who
sell to distributors.
One of the problems is that your product is a bit pricey for this
market. While millions of dollars are spent on executive gifts in this
price range, obviously the volume will be less than in the $1 to $2
range. One of the very big considerations in this arena is the amount
of margin you’re willing to share. In any viable distribution channel
for your product, you’re going to have to share 50% or more of the
final retail cost.
Thus, unless you’re willing and able to sell your product in the $25
range, then there might not be any channel available to you other than
direct sales by you. I love your product, and I think there’s a market
for it – in the $50 range, but no more. Marketing history is replete
with great products that could not be produced efficiently enough to
pay for distribution and marketing.
Here is what I would suggest that you do.
There are two industry associations involved with this industry. They
actually compete with each other for membership. But at this time the
jury is still out and you will need to join both, each for different
reasons. They are:
Promotional Products Association International - PPAI
http://www.ppai.org/
PPAI is the original industry organization and has been around for
many years. Nearly all distributors belong to this association. It
holds 2 major shows each year. This may be increasing to 3.
Advertising Special Institure – ASI
http://www.asicentral.com
ASI has been around for 10 or 15 years as I recall and was started by
some people who were disenchanted with PPAI. They are VERY aggressive
marketers, and offer classes, software, quarterly directories.
ecommerce websites, and at least 2 major shows a year. One will be
happening next weekend in Dallas. They are very profitable and have
hundreds of people working for them in various areas.
All of the shows will have hundreds and hundreds of booths and tens of
thousands of attendees. Only the largest convention halls can handle
the show. Shows are usually confined to Dallas, Las Vegas, Chicago,
and Orlando. There is lots of bad blood between these organizations.
In order to have a booth at a show you will need to join. It’s not
cheap. Check the websites for current pricing. In addition to having a
booth at the show, both organizations offer sponsorship opportunities
that can give you a lot of visibility.
I would strongly suggest that you join both organizations, get a booth
at several of the shows, buy some sponsorships, and make a big splash.
You will get more business than you can handle. More importantly, you
may find a reseller who will be able to take over your marketing
completely. These people have the contacts to get the job done, and
I’d strongly suggest this route.
This can be an expensive endeavor. If funds are limited, I’d suggest
just calling up some resellers and asking if they’d be interested. In
order to get a list, you’ll have to join one – ASI I’d suggest.
Before I invest all of my time in answering your question, let me post
what I’ve written so far. Let me know if I’m on the right track and
I’ll invest some more research time. Also, if you can give me some
more insight about whether a $25 wholesale price is feasible. If not,
I’ll have to put my thinking cap on.
Thanks for the question!
Prof.
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Clarification of Answer by
prof-ga
on
20 Jan 2003 14:29 PST
Swiss Cheese,
Okay, first I'm glad that you've got enough margin to make this a
viable product. That solves a lot of problems. This afternoon I took a
few minutes during my meeting with an ad specialty firm to show your
product and get a reaction. Unanimously, everyone felt it was a viable
product in the gift end of the business.
One of the most important comments dealt with something I hadn't
thought about. You must have a rather sizable surface onto which to
apply a logo. In addition, your product must lend itself to having a
logo applied in some fasion. Screenprinting is my first thought,
although the top of the post does not look large enough, and I'm not
sure what the technical difficulties are in applying a logo to the
spin surface.
Everyone agreed with me that the way to go is to get a reseller,
jobber, or manufacturer's rep company to handle the product. One way
of course is to finagle your way into one of the shows (which is
certainly a realistic possibility), and try to develop interest and
see what flies.
The other way is to contact resellers directly. I've taken a look at
the ASI supplier catalog, a 700 page member directory. In the index,
there are probably 25 names under "tops and spinners". Your best bet
might be to buddy up to a local promo distributor and ask for access
to this book.
I did take the time to look up a few websites from this list:
http://www.alpi.net
http://www.zoopiks.com
http://www.asisupplier.com/93520/
These may not be interested, but may provide leads to other resellers.
Good luck, and thanks for asking the question! I enjoyed working on
it.
Prof
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