Selling to Wal-Mart and Target
Many inventors and new product entrepreneurs want to sell to Target or Wal-Mart. And some do. You won’t have any easy time making the sale, and there are plenty of obstacles, but the fact is that both Wal-Mart and Target are open to new vendors, both have an open submission policy and you might be able to succeed if you set up a plan to that will show the retailers that your product will sell. Wal-Mart goes a little bit further than Target in being accessible to new retailers by having a local buying program where inventors can actually have their product test market in their local store, and if it succeeds it just might be picked up across the country. The road to both Wal-Mart and Target success is to build up some market momentum to show the product will sell, and then simply work through the retailers’ submission process until you can get in front of a buyer.
Many of you are probably skeptical about your prospects about getting your product into Wal-Mart or Target. So I’m going to start with a couple of success stories.
Kim Babjack launched her business at QVC, selling her first 2,000 Zip-A-Ruffles, which is a ruffled bed skirt that zips on and off the bed pad for easy cleaning. The Zip-A-Ruffles ran successfully on QVC for several years and created a history for Babjack when she came up with a new product idea in 2005, the Animalid a toilet-lid cover with 3-D animal graphics designed to help toddlers feel more comfortable during the potty-training process.
Babjack was sure her product would sell at Wal-Mart and she approach her local Wal-Mart Store Manager to carry the Animalid. After working for a year to get an appointment, Babjack made her presentation, the store manager loved it and after only a small mountain of paperwork and approval of the district manager Babjack’s product was on the shelf. Animalids had a name upgrade to Animal Lidz, and never dominated the market but it still had its spot on the Wal-Mart and a chance for permanent glory.
The husband and wife combination Vanessa Troyer and Chris Farentinos came up with a simple idea, a lockable mailbox. The mailman could put the mail in, but you could only get the mail out with a key. Their two products’, the Oasis and the Oasis Jr., sales have Troyer and Farentinos’ company Architectural Mailboxes off and running in the marketplace and right into Target’s catalog and website. To date they have sold more than 150,000 of their locked letter drops, which retail for $97 to $258.
Troyer and Farentinos developed their credentials by selling successfully through Amazon. Through a persistent effort she located the home address of Jeff Bezos, president of Amazon and sent him a presentation on how much money Amazon was losing because their packages were lost. The day after the presentation arrived Amazon called and today they carry over 50 of Architectural Mailboxes products. The Oasis locking mailbox is not just sold by Target, it is also sold by Home Depot, Costco and Lowes.
The Submission Process
Both Wal-Mart and Target have a submission process before you have a chance to meet a buyer. Your chances of meeting a buyer will increase as you have success in the market.
- Go to the web page: http://walmartstores.com/Suppliers/
- On the left side of the page and for Product Submission. There will be a link at the site for Wal-Mart’s online submission package.
- You are allowed to upload only 512 KB of data. So you might need to cut down your brochure image quality to keep under that limit.
- The online submission form doesn’t ask for your sales success but if you keep your brochure down in size you can include a jpeg of a page with your current sales success.
- Once you do this you need to wait for the buyer to contact you to request a sample or hopefully an appointment.
You can only be so active in the National Program, and you can’t really control how the buyers will respond, so it can be discouraging as you don’t have control of the situation. Fortunately Wal-Mart also has the local buying program option that offers you an opportunity for a one-on-one meeting.
Local Buying Program
If you want to sell your product only in a limited market, Wal-Mart requires you to use their local buying program, where you need to convince one Wal-Mart manager to like your product, then you need to complete a local supplier questionnaire and have the District Manager approve the questionnaire. You can do this even if you hope to eventually sell to all Wal-Marts, but you just need to start with the local store manager.
Sounds easy enough. The problem is getting that appointment with the store manager. This is where you need to supply lots of success information about your product, state exactly in the store where your product should go, and explain how your product has outsold the other products that Wal-Mart has on the shelf at other locations. The store manager is busy, and won’t see you until you can be convincing that your product will sell. You need to expect to try to make an appointment for at least 90 days and you need to keep furnishing information to get the store manager interested. You also might want to try and get in to see several store managers. The store manager’s point of view is going to be that only one out of 100 products will be worth seeing. Your job will be to provide short bursts of information that will show your product is the right one.
Some steps you can take to help the manager see your product is right.
- Have sales success, preferably in bigger stores. Be sure to show pictures of your product on the shelves of those stores.
- Attend trade shows, show your booth display.
- Obtain testimonials from satisfied users.
- Show PR you have generated in industry or consumer magazines.
- Create effective packaging.
- Be prepared to show that you can deliver large quantities, either with a D&B report, or with a detailed explanation of how you can fund deliveries.
Target wants new vendors to call their Sourcing Information Center at 612-696-7500. When you call they will direct people who want to sell a product to Target to send an email to email@example.com . You will only get a response if the Target people like your product. So you need to be sure that you include all the information you can about your product, your sales success and also your ability to fund production. The email itself should show a picture of the product, in its package if you can. You only have a brief opportunity to make your point so you have to be direct. You can send in your item multiple times, but space the submittals at least six weeks apart.
I recommend you have in the email itself, not as an attachment,
- Start with the category, for instance: New Electronic Product.
- Mention one or two items currently carried by Target that your product should be next to. For example: place next to digital cameras and camcorders.
- State where it has been sold. Just on one line, list only the biggest retailers, catalogs or Home Shopping Network.
- List the suggested retail price.
- Your contact information.
- A picture of the product in its package. Don’t make the picture too big, 2 x 2.5 inches is fine. They can enlarge the picture if needed.
Also include as attachments as many items as you can from the list above on how to convince the store manager that he or she should meet with you.
While Wal-mart and Target both have a process that anyone can use to present their product, that doesn’t mean that you will have an easy time getting an appointment with a buyer where you can pitch your product. You might be shut out and never get the chance to make your convincing case. If that should happen, you still have two other options to explore: selling through distributors who might sell to the big retailers, or having a company that already sells to Wal-mart or Target market your product for you. Always first try to sell your product yourself, often Target or Wal-Mart prefer to buy from the manufacture first, and if you sell through other companies you will make far less money than if you sell directly. But if you can’t get in the door at first you may need to take another approach.
There are many ways to find distributors that would handle your product. Industry Trade Magazines often have an annual directory where they would list distributors. Larger libraries will have Gale’s Source of Magazines and Broadcast Media which lists almost all trade magazines, or you can try an internet search. Trade Associations will also have a directory of distributors. Gale’s Encyclopedia of Associations at larger libraries can also help you, as can an internet search.
You can also check out these internet sites which have listings for distributors:
Contact the distributor and get the name of the person in charge of what products they carry. Then send that person the same package you sent to Target and Wal-mart about your product. Even if the distributor doesn’t sell to Target or Wal-mart they might still be willing to carry your product and sell it to other customers. Expect the distributor to mark your price up from 20 to 33%, so you suggested retail price will also need to go up. Retailers will mark a product up from 50 to 100%. Once you know what mark-ups are standard in your industry you can determine what your suggested retail price is.
Other Manufactures or Marketers
Your other choice is to go into the store and find products in the same area as yours. For example, if you have a kitchen product, you would be interested in all the other manufacturers of kitchen products. Try to find a mid-size company. You can then contact the marketing department, say you have a product that has had strong sales success, and that would be a natural fit into their product line. Have a package similar to Wal-mart’s ready to send the marketing person if they have interest. Expect the manufacture to mark-up your price to them a minimum of 33%.
Selling to Wal-mart and Target is difficult, and even if they like your product they will often try to negotiate such a low price that you might have trouble making money. But while difficult, it is not impossible, and small vendors sell to Wal-mart and Target all the time. Just remember if you are rejected at first that you can go out and make additional sales and then go back and try to sell again.