| Here is some information we need to know about | | | | Who is your market? How big is your market? Is |
| retailers. Be prepared to have everything | | | | this a mass market appeal item or is it a niche |
| covered, before you make your pitch. | | | | market item? Market size will influence wholesale |
| Retailer Mark-up | | | | cost. (what the they are willing to pay for it )o |
| Many retailers want 50% mark-up. Some mark-up | | | | Risk + value to business: What is the risk and |
| their products anywhere form 30% to 50%, this | | | | value to their business? Here we are looking at |
| is based on quantities, suggested retail price and | | | | costs vs. profits. Is your market sufficiently large |
| cost, Risk + value to business. Electronics are less. | | | | to sustain your product?o Features and benefits: |
| You need to factor this into you final costs and | | | | What are your products features and benefits? |
| your wholesale price to your retailers. | | | | This needs to be presented to them clear and |
| Prototypes | | | | focused. What does your product have that the |
| Retailers do not want to see work in progress | | | | competitors don't? Cost, packaging, advertising, |
| concepts or drawings with detailed explanations | | | | unique feature, what's the product differentiation.o |
| involving extensive imagination applied concepts. | | | | Price point: Cost and suggested retail price. You |
| They do want to see working product with | | | | need to have established your manufacturing |
| packaging developed, clear and defined to the final | | | | price.o Manufacturing: Time lines 8 to 16 weeks to |
| size. This will enable them to determine product | | | | production. Has your product already seen the |
| placement on their plan-o-grams. They also want | | | | market place in very low quantities? What was |
| to know how fast you can deliver the product. | | | | the response, are you now ready for a larger |
| You need to be ready for production or already | | | | distribution network.o Master pack/inner pack: |
| have produced. | | | | what are master packs and inner packs? |
| Trademarked and copyrighted | | | | When retailers purchase goods from suppliers |
| Retailers prefer to deal with products that are | | | | they arrive to the store in master packs on skids. |
| trademarked, copyrighted, or patented. This | | | | With inner packs which contain the actual product. |
| shows real commitment and belief in the product | | | | This facilitates selling and makes inventory easy |
| on the part of the supplier, as well eliminates | | | | to manage. |
| problems with them carrying a product that may | | | | Example; you're selling your product in inner packs |
| have some liability attached to it. Retailers don't | | | | of 10 (which means that there are 10 actual |
| want someone walking in the store and claiming | | | | products inside a box) Then 5 of these boxes are |
| that this was their idea 6 months ago! | | | | packaged inside a larger box which is now your |
| Plan-o-Grams | | | | master case. So your master contains 5 x 10 or |
| Retailers review portions of their business on | | | | 50 pieces. |
| pre-determined schedules. They begin in | | | | So you've set up your selling parameters to sell |
| mid-summer with their suppliers, August and | | | | at least a minimum of 5 pieces with each order. |
| September, and then cut a PO with stock in | | | | (One inner case) |
| Stores in February. Retailers use Plan-o-Grams to | | | | You need to communicate with your retail outlet |
| determine product placement, shelf space or peg | | | | because master packs will be determined by the |
| area. These Plan-o-Grams are extensive and | | | | retailers that you speak with. Many have |
| involve their suppliers for each product on that | | | | restrictions on size and weight. Another important |
| particular Plan-o-Gram, and are planned six months | | | | factor is cost of the units in the master pack for |
| in advance. | | | | the retailer. You may have to develop one size |
| They are detailed to how many per peg or shelf, | | | | for the large outlets and another for the smaller |
| and what product is on what shelf. Detailed | | | | ones. Again this depends on which markets you |
| sketches are produced to effectively make the | | | | want to attack. |
| most of the space used. The key here is to be | | | | ...Some additional things to consider |
| ready 6 months in advance; you have to be | | | | As a supplier how are you supporting your |
| aware of their buying cycles. Always talk to your | | | | product?o Trade Shows: What trade shows have |
| intended retailer. | | | | you attended or plan to attend. These can be |
| Quantities | | | | given to theretailer as part of the marketing |
| Quantities will be determined once a retailer sees | | | | presentation.o How will you educate consumers |
| your New Opportunity presentation. In estimating | | | | about product and where to find ito Marketing |
| what the potential quantities could be, you need | | | | plan: what is your marketing strategy?o Provide |
| to explore how big the potential market is. | | | | as much information about the target market as |
| Potential market will be a reflection of the existing | | | | possible |
| market of X product buyers. This is research | | | | Competitor information you need to know ..... |
| information that you need to have prepare. | | | | Competitor Corp: X product (example) |
| Questions will be asked about the market | | | | Local company called competitor X corp., |
| potential. | | | | produces similar product this is a $9.99 item |
| Expect to have succinct answers. If they get the | | | | located in the camping section with a simple |
| feeling that you don't know your market well | | | | packaging sleeve, sits on a lower shelf and moves |
| they will not feel positive about carrying the | | | | extremely well. |
| product. The better you know your market the | | | | A plastic injection molded item this item was |
| more confidence instilled in the retailer. You need | | | | introduced in the past through the local stores as |
| to have market knowledge and drop that | | | | a consignment item and has since become a |
| knowledge in front of the target retailer. | | | | regular store item. Product has been in the store |
| ...Be prepared to answer the following questionso | | | | for 19 years. |
| Retail and other competitors: USA or Canada; has | | | | Quantities: Retailer has in the past sold 50 000 |
| this product already been on the market? How | | | | units @$9.99 as a start up quantity, that's gross |
| well has it done?o Market Knowledge: Units | | | | profits over $499,000. |
| annually, sales. What are your forecast figures? | | | | X product advertises on the Weather Channel. |