These are good questions that you raise. I have significant
experience working for a large midwestern grocery/general merchandise
retailer, so I am basing my answer on that experience. I am familiar
with the stores that you mention.
You are looking to contact the buyer at these various companies who
handle the DVD category. You may very well be connected to them or an
assistant if you call the company, in which case you explain in about
30 seconds why he or she would want to see your product (novel
features and characteristics of it and any promotional activities
planned which would cause consumers to come to his or her store asking
for it) and ask for a 15 minute appointment. You may or
may not have success with this approach.
Your local store department manager can probably tell you who the
appropriate buyer is, too, since they have to deal with them regarding
promotional activities in their category. Bring a sample of your
product during a weekday morning to your local store and talk to the
department manager about it and who the buyer would be. Some stores
are allowed to purchase merchandise directly, as well.
If you are unable to get an appointment for yourself, then you will
want to enlist the services of a broker. Brokers represent a large
number of manufacturers to the various retailers. Most small
companies, and even a lot of large ones, find that using brokers is
the most cost-effective way to deal with buyers. The retailers like
them also because they make the buying process efficient: by talking
to one person, they can make arrangements for a large number of
products instead of talking to each individual manufacturer. Since
you are presumably completely unknown to the retailers, working with a
trusted broker is much more likely to meet with success. Particularly
because you have identified similar products in the stores, find out who
represents them and try to get them to represent you, too. An
excellent way to do this is to inquire of the buyer when he turns you
down for an appointment if he works with any brokers to purchase
products of your type, and if so, who are they. Visiting relevant
trade shows would also be a good way to network yourself to a
relationship with a broker.
Once you've established who is going to actually meet with the buyer,
you will need the following:
Sample product to take to the meeting (your single biggest selling
point). Expect that you will be leaving it with the buyer so that he
can try it, give it to coworkers and friends to get their reaction,
etc.
A presentation on a laptop and/or a color-printed booklet to leave
with the buyer describing what the product is, why it is
different/better than the competition, information about who carries
it and how much of it they sell(information about your personal
selling experience is very important), and, most importantly aside
from the
characteristics of the product itself, the types of financial
incentives you are prepared to offer the retailer to carry it in terms
of cash payments and free product. For a discussion of slotting
allowances, see my previous answer at
http://answers.google.com/answers/main?cmd=threadview&id=207344.
You will need to provide them with a forecast of how much they will
sell at what retail, how much shelf space your product will require,
what their cost per unit is, your promotional plans for the product
(coupon drops, television, print advertising, discounts periodically
to the retailer, etc.). You will want to compare your profit to them
per unit of shelf space relative to your competitors. Unless your
product is extremely unique and obviously attractive to the consumer,
you will need to be as good or better. A lot of data about the
competition can be purchased from firms like IRI and Nielsen. Another
advantage to working with a broker is that they will most likely have
real figures for the costs, retail prices, and sales volume of the
competitors gathered from various sources. And, having a personal
relationship with the buyer, they can help you fine-tune your
presentation to address that particular individual's concerns.
Finally, you will need to provide information about the logistics of
purchasing your product: who do they place orders with, how quickly
can you respond to their orders, minimum order quantity, and whether
or not it is delivered directly to stores or handled through the
retailer's distribution system. Also, will you be providing personnel
to help roll out the product in the stores by placing it on the
shelves, and what kinds of ongoing store level support will you be
providing. Brokers can also help with this tremendously since they
have to deal with it all the time and have economies of scale and a
local presence that you don't. Obviously, the easier you make it for
the retailer to introduce your product and maintain it on their
shelves, the more likely they are to carry it.
The purchasing departments are generally organized around categories,
which is why I indicated that you are wanting to speak with the buyer
for the DVD department in most cases. The buyers are
typically measured on the profitability of their category, frequently
measured by gross margin of the products sold in their category, and,
to varying degrees, on inventory turns. Some more sophisticated
measures, such as profit per square-foot may also be used. The amount
of markdowns they have to take from the initial retail to before a
product finally sells is also monitored very closely.
So, your job, or your broker's job, is to convince the buyer within a
few minutes that you have a product that consumers will want to buy at
full retail and that you are prepared to sell to the retailer at a
price which allows the buyer to look good on his profitability
measurements. You will want to get a sense of the gross margin target
that the buyer has for his category and the gross margin offered by
your competitors, and make sure the your pricing for the suggested
retail price and the retailer's acquisition price are at least that
good.
Sincerely,
Wonko |
