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Do you want to know how to get your product into retail stores?
One of the most essential
One of the most essential things that you can do when you're sitting across the table from a big box buyer, is to know your numbers backwards and forwards. And the best number to know is going to be your bottom line. The bottom line means that if you go down to $1.20, you're going to be losing money if you go past $1.10, your margin is $0.10 in there. And, you need to make sure that that $0.10 includes for any eventualities, legal fees, slotting fees, any distributor costs, any point of sale displays. If you get returns, it's gonna be cut out of that, you need to know your bottom line. Nobody can give that to you, it's something that you have to learn from experience, and you have to work your way back from your retail price.
So, we're going through examples. Let me take a product here. This pen, if this pen costs $5 at retail, you need to know that when you're speaking to a big box buyer, like Walmart, I wanna put this product into Walmart, he can't buy this $5 retail pen for less than $2.50, because less than $2.50, I'm not gonna have the money to do the shipping to their warehouses, to do the promotions behind the product to get the product moving off the shelf, and to pay my staff, to support any clients that come back, because it's a defective pen.
So you need to build all your business costs in the back-end of that bottom line price. And if you're going through a distributor, like a large distributor, KeHE, McClain, [01:58] ____, Hackney, these larger distributors take smaller margins than independent DSD distributors. However, when you ship the product directly to them, you pay for the shipping to them, and you also pay for the shipping from them. If your product has an expiration date, they're gonna expect you to take it back. If your product doesn't move, they're gonna expect you to ship it back to you, and at the end of the day, you're the one that's going to have to convince the retailer to buy the product from that larger distributor, and then they earn their percentage. So going with your eyes open on any pricing that needs to occur, so that you can have that promotion schedule, have that assistance on the back-end and you can support yourself and feed yourself at the end of the day, is gonna be essential.
Going through a DSD network, or a Direct Store Delivery network, like Mr. Checkout, when we speak to somebody, the distributors that we work with, they expect usually 20%-30%, as far as a commission, when they bring a product into a store. So, if they buy your product for $2, they're gonna wanna sell it to their store at $2.50, and then, the store is gonna wanna retail it for $5. So you need to know that the bottom line might be lower than a regular distributor, larger distributor, but you're not going to have to build in the expense of doing the in-store sales and marketing because, the distributors with DSD networks, when they buy the product, they sell the product.
When larger distributor takes your product, they take your product, they warehouse your product, and then you have to sell the product. It's a different work around. They have trade shows where you can do this, but most of the time, it's about building the buzz. And if there's no buzz, and there's no demand for your product, you're gonna be out of lot of money, because you're gonna have to ship it back to you.
The last bit of pricing is knowing your MSRP. Knowing your retail pricing, and where people are pricing your product and how fast your product is moving off the shelf is incredibly important, when bringing a product to market.
Recommended Product Listing Site: https://BuyersDirect.com/
Recommended Sales Rep Directory: https://RepResearch.com/
Bree great insight! We are working on our brand and product to be retail ready! I’ll send you a sample of our design for your input if you wouldn’t mind?
Hi I would love to work with you as a coach