How to Get Product Distribution

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2 If you are new to the industry and are wrestling with the challenge of how to get your products onto retail shelves (or pegboard hooks), here are some things you need to know. The good news is that if (and only if) you have a product that consumers in droves will buy if given the chance, you can ultimately be very successful--with emphasis on the word ultimately. Be prepared for obstacles and setbacks along the way. Like everything else in life, gaining product distribution is a process. This is even true for companies with an established brand, buyer relationships, and a track record of success. But, it is much more of an uphill climb for companies trying to get their first breakthroughs. Here are some basic things to consider as you strive to gain distribution: MAKE SURE YOU HAVE A PRODUCT THAT WILL BEAT THE COMPETITION Quite often, entrepreneurs are so excited about their product idea that they lose the ability to be objective about how appealing it really is. It's crucial that you spend the time up front to make sure you have a product that not only has a truly distinct competitive advantage in the eyes of consumers but also can be sold at an acceptable price. The tendency is to want to start approaching buyers as soon as possible sometimes simply because of eagerness to start generating revenue as opposed to just expenses. However, if you present your product to a buyer before it is fully baked or before you are prepared, you may well never get a second chance. You'll also be wasting time and money. The best way to vet your product in the early stages is to get feedback from consumers you can trust to keep your idea confidential. If you re concerned about confidentiality, talk to your lawyer about whether you need to have people sign a non-disclosure agreement. Keep tweaking the design based on feedback until people are really excited about it and say they would definitely buy it at the price you intend to retail it at. Since the assumption of this article is that you intend to market through retailers, your packaging is as important as the product. I ve seen many a great product fail because consumers couldn t quickly tell what it is and what the benefits are. PROTECT YOUR CONCEPT IN EVERY WAY YOU CAN If your idea is a good one, you can probably be assured of two things. Someone somewhere is probably already working on an idea similar to yours. And, as soon as your product sees the light of day, if it sells, someone is going to try to copy it. Get yourself a good patent attorney and do whatever you can to throw up barriers to would-be competitors. If you can get a utility patent, do it. If you can only get a design patent, do that although it offers less protection. Copyrights may give protection in some cases. Also, put care into the brand and/or product name to make sure it's appropriate, memorable, and valueenhancing. Of course, protect that as well. DEVELOP SOME KIND OF EVIDENCE OF LIKELY SALES SUCCESS By necessity, retail buyers tend to be risk averse and time-constrained. As a result, many will have an "if in doubt, say no" policy. Oddly enough, especially at some larger chains, they may also have little or no juvenile product experience and frankly may not know how to recognize a good idea when they see it. For these reasons, if and when you do get an appointment, you need to be able to present a very, very P AGE 1

3 persuasive fact-based case for why your product will fly out of their stores. There are a number of ways to do this: a. Online selling--establish a website and Facebook page (if you haven t already) and start selling direct to consumers. You could also sell through someone like Amazon. Use social media marketing to promote your product. b. Local mom & pop stores--get your products placed (on a consignment basis if necessary) at some local specialty stores where you can closely monitor rate of sale. This is also a good way to check out packaging effectiveness. Once you ve got a good track record, use that to leverage additional store placements and create a positive case. c. Influencers--Send samples to mommy bloggers or media outlets who might write positive reviews that you can include in your presentation to buyers. d. Contests--Enter your product in industry competitions like JPMA s Innovation Awards Competition. CHOOSE AN APPROPRIATE CHANNEL STRATEGY This may be one of the most complex and important parts of the process of marketing a new product. Your channel strategy is the way you will get your product all the way into the hands of consumers. It could vary depending on who your target consumer is and how difficult it is to explain the product to them. You may want to only sell online. This is becoming more of a viable option. Or you may want to think in terms of a staged strategy where you start online, go next to specialty stores, and once established, tackle the upscale and/or value mass merchandisers. Potential channel conflicts need to be understood before crafting a strategy. PREPARE FOR AN AUDIENCE WITH TARGET BUYERS Once you ve established your fact-based supporting case and determined your channel strategy, it s time to get appointments with buyers and do your pre-appointment homework. It's very important to recognize that every retailer is unique with respect to purchasing and product presentation policies. You need to do some preparatory research to understand the uniqueness of each retailer and what their current program is in your category. You may at this stage benefit from getting a small booth at the ABC Kids Show as a platform to both introduce yourself to prospective buyers and get feedback on product, packaging, and pricing. You can try to get the appointments and do the selling on your own but you may have more success working with one or more good, well-connected manufacturer s representatives. The good thing about reps is they work on commission so you don t pay them unless they sell something. The right ones will already have relationships with the buyers you are trying to reach so if they take on your product, that by itself gives you more credibility. Reps tend to specialize in one class of trade or another. Some reps only handle one customer (e.g. Target). So who you sign up will depend on your channel strategy. The first person you ll need to sell to is the rep. If they aren t excited about your product, they won t take it on. P AGE 2

4 MAKE AN EFFECTIVE SALES PRESENTATION I recommend that, if you use a rep, you accompany them on early sales calls. There s three reasons for this--(1) No one knows more about your product than you so you ll be in a better position to answer the tough questions from buyers; (2) You ll hear firsthand any buyer concerns or criticisms which you can take back with you to make further improvements to your product and presentation; (3) You ll have a chance to observe the quality of your rep s relationship with the buyer and their sales skills. Do not quote firm prices until you understand the retailer's requirements. In fact, it may be wise to treat the first presentation as a fact-finding rather than a deal-closing proposition. Find out if there are warehouse allowances, co-op advertising allowances, computer communication requirements (e.g. EDI), or other expenses unique to that account that will need to be factored in. If you can do all the calculations during your first meeting with a buyer, fine. But it s not the end of the world to follow up with a price quote a day or two later or on a follow-up visit. If all goes well, you will get your product(s) placed and the sell through will be at a buyerpleasing rate. But, realize this is just the beginning. Keep improving your product and packaging to stay ahead of potential competitors. And, develop more great products to leverage your initial success. The bigger the program of products you can present at retail, the stronger your position with retailers and visual impact in stores. And, if you re not already a JPMA member, join! There s no substitute for the resources they can offer and the opportunity to meet other members who can act as mentors along the way. P AGE 3

5 ABOUT THE JPMA The Juvenile Products Manufacturers Association (JPMA) is a national trade organization of more than 250 companies in the United States, Canada and Mexico. JPMA exists to advance the interests, growth and well-being of North American prenatal to preschool product manufacturers, importers and distributors marketing under their own brands to consumers. It does so through advocacy, government and public relations, information sharing, product performance certification and business development assistance conducted with appreciation for the needs of parents, children and retailers. To learn more about JPMA and the Certification Program, and for a complete listing of JPMA members, please visit ABOUT RON SIDMAN Ron Sidman has spent most of his adult life in the juvenile products industry which he considers to be the ultimate test of one s managerial skills and abilities. Motivated by his interest in parenting and child development, created in1972 a parenting lifestyle oriented brand, The First Years, and was Chairman, President, and Chief Executive Officer until the company was sold in September of 2004 to the RC2 Corporation for $162 million. Much of Ron s time inside and outside the company was focused on parents and children. He was a member of the Board of Overseers of Children s Hospital, Boston. And he was a director of a national parents organization founded by Dr. T. Berry Brazelton called Parent Action and of the Brazelton Institute. Ron s interest in the industry encouraged him to serve as a member of the JPMA board of directors from 2001 to 2004 during which time he was appointed Treasurer and Vice Chairman. Unable to cut the umbilical cord (so to speak) he continued as an adviser to the JPMA Board from 2004 to 2011 and is now acting as a mentor to industry CEO s through JPMA s exclusive members-only CEO Mentor Program. He also writes a blog accessible exclusively to JPMA members called The CEO Play Yard. Throughout his career, he s been a student of the art and science of management and since 2004 has completed consulting assignments inside and outside the juvenile industry. He is currently working on the development of new tools that managers of both profit and non-profit organizations can use to improve organizational performance. P AGE 4