If you want to understand how important sell-through is to the success of your product, consider the case of Contech Electronics.
By focusing on shelf space and sell-through at such big-box retailers as Home Depot, the Victoria, British Columbia, startup is on pace to produce $4 million in revenues this year, and more than $8 million in ’07, compared with six-figures a couple of years ago.
“It takes more than a good product to sell well,” says CEO Mark Grambart, whose company makes motion-activated sprinklers meant to chase wild animals from lawns and gardens. “You need to spend as much creativity and innovation to sell your product once it’s on the shelf as you did in creating the product.”
Here are more tactics for putting your startup on the same path as Contech:
Get all exclusive with your major retailers
Shelf-space is one thing, but it’s quite another to get a major retailer to give your product a chance to prove itself. One way to do it is by promising exclusivity. In an era of homogenous big-box retailing, this can be very tempting to Wal-Mart, Target, Lowe’s or other major chains.
Robin Gohsman believed Target would be the perfect retailer for Be Bars, a line of nutrition snacks he was creating. He studied similar products offered by the Minneapolis-based chain, and the gaps in its lineup. After he impressed Target buyers, they agreed to significant test marketing of Be Bars – if they could be the exclusive retailer.
“We convinced them we had the potential to increase their business because this was a line of products that was marketed and packaged differently from everything else in the marketplace,” says Gohsman, founder of Be Unlimited, in Milwaukee. “And we were willing to go it alone with them.” After a 200-store test of Be Bars in 2004, Target rolled out the line nationwide in early ’06.
Mix it up – extend your product line
With new products constantly entering the market, retailers have to be stingy with shelf space. Ironically, one way to carve out more for yourself is by offering to fill more! Once it’s clear there’s consumer interest in your product, introduce new versions and other products that make sense for your brand for a more varied mix.
Tom Szaky came up with an organic fertilizer made worm from droppings, then quickly turned his attention from large commercial sales to consumer uses. He packaged TerraCycle in eco-friendly used soda bottles, and got it on the shelves of Home Depot and Wal-Mart. Then it was up to him to keep it there.
The key was coming up with new sizes, packaging and varieties. It assured his retail partners that TerraCycle’s innovations and staying power would hold customer interest.
“We’re going to be up to 12 or 13 total products by next year,” says Szaky, co-founder and CEO of the Trenton, N.J.-based company. “And we’ll be close to hitting $6 million in sales next year after just $70,000 in 2004.”
Spread your product’s back-story
Consumers will be curious about your product once they see it on store shelves, even if they don’t buy the first time. Be ready to tickle and feed their interest – and encourage a sales by telling the story behind your product.
Figure out what makes your product, your company and even you interesting or unique. Put the facts together in a simple description or narrative or get the help of a good writer. Then tell that story in every space you can find: on the back of your package, on your Web site, in a press release to local media.
Randy Schneider and Allen Evans launched Generator Nation in Fort Lauderdale, Fla., a couple of years ago after seeing the need for emergency power sources during natural disasters. Part of every sale is donated to hurricane-relief charities. They worked with a local PR firm to get their timely story out to South Florida media, helping produce strong demand at Sunbelt Rental, the retail chain that stocks Generator Nation products.
No ad budget? Go to grassroots
Chances are you won’t be able to support your retail presence right away with a full-blown ad campaign. In that case, rely on grassroots marketing tactics. Ask if your retailer will let you hand out product samples or other freebies in the store. Start a blog that includes customer testimonials about your product. Enlist friends and family as product evangelists. Ride around your first metro markets in a panel van painted with product images and info. The methods are limited only by your imagination!
Our Bottom Line
Landing those first retail deals is only the start. From then on, it takes innovation, imagination and work to get the sell-through that keeps your retail partners coming back for more – while you watch your company grow.