Selling to Mass Merchants
Companies like Costco, Sam’s Club, Wal-Mart, Sears, K-Mart, and Target are all mass merchants–large chain stores that carry many types of products for nearly all types of people. These are the merchants with the highest sales potential for you, but at the same time are most difficult to get in to. But, inventors and small producers do get their products into the mass merchants all the time, they just need the right hot product and be ready to move.
How to Meet Buyers
Mass merchant buyers almost never meet you if you try to see them cold at their office. You can meet them though by exhibiting at trade shows or if you can have a successful in-store trial. Trade shows are the quickest route to meet buyers. They will stop at your booth if they feel you have a red hot product that can’t miss and it fits into the category they buy for. They also might not stop at your booth–you probably have less than a 10% chance to have even one mass merchant buyer stop and look at your product. You can find the top trade show by doing a Google search for the industry and the word trade shows, for example I did a search for cell phones accessories trade shows and the CITA trade show came up, among several others, and after doing about 20 minutes of investigation, I decided the CITA trade show was the one I should attend. The cost of doing a major industry show can be $15,000 and up, including a good booth, advertising and promotional materials, sample product, and your travel and hotel expenses. The good news is that even if you don’t get a mass merchant buyer to stop by, you still might find buyers from smaller outlets that will take your product, and you might find independent sales representatives that will be willing to buy your product.
A second way to meet buyers is to participate in the stores local buying programs. Not all mass merchants do this, but many do. This allows the local store manager to try a local product out in his or her store. Sometimes the program might be controlled by the district or regional manager and it might cover 8 to 12 stores. You just need to talk to the local manager and convince him or her to try your product out. You can offer to do publicity with the local papers to get some articles published to help launch sales. If your product does well in a local buying program you have a chance to be recommended to the buyers for the whole chain.
Managers will be very picky about what products they put into the local buying program. Any sales you make prior to entering the program will help you. Sales to mail order catalogs, QVC or other home shopping networks, smaller retailers, even sales at consumer shows such as lawn and garden shows will help you convince a manager to try you out with their local buying program.
Finding a Manufacturer’s (Independent) Sales Representative
Another route to take is to find an independent sales representative to sell your product to the mass merchants. The reps can sell the product directly if possible, but they can also set you up with a distributor or another manufacturer to act as your marketing arm to help you get your product into the mass merchants. You might have to give the distributor of other manufacturer 30% of your sales price but at least you will be in the door.
Finding sales representatives can be difficult. You can find sales reps by searching on Google for mass merchandiser sales reps, or by looking for sales reps to Wal-Mart, or sales reps to Sears. You can also find trade magazines for your industry, such as drug store trade associations and look to see if they have a resource for representatives. Another tactic is to look at exhibitors for the last trade show in your industry and look for a list of exhibitors. Then you can go look at each exhibitor site to see if you can find a manufacturer who lists who its reps are and then contact them. Onestopinventionshop.net also sells a booklet about selling to mass merchants that includes a list of a 100 reps that sell to mass merchants.
What to Do Next
If things fall your way and you meet a buyer who likes your product you need to be ready with two things, ability to use EDI (electronic data interchange) and assurance you can supply. EDI is how most mass merchandiser send you information and place their orders. Wikipedia has a good section to explain EDI at http://en.wikipedia.org/wiki/Electronic_Data_Interchange. This can be expensive, but you don’t need to set this up until you have an order. Check out the web site http://www.highjump.com/Solutions/Pages/TradingPartnerConnectivity.aspx. This company will help you have EDI capability so you can deal with mass merchants. Talk to the company and understand what it will take to set up an account if you land a mass merchant account and then be ready to implement that solution when you get an order. The second key point to have a handle on prior to meeting a mass merchant buyer is delivery. More than likely you won’t have enough financing to handle a large order. But your manufacturer might. Talk to your contact at the manufacturer and tell him or that you are out trying to get an order and ask how much the manufacture can deliver if you get an order. Then you need to ask if the manufacture will help in financing production of the order or help finding financing for the order. Be sure the manufacturer can do that. Finally ask the manufacturer if they will listen to a counter offer on pricing if the mass merchant demands a lower price. Don’t spend money, or make a large commitment, just see how much your manufacturer will do for you if you land a big order. This will help you get a better handle on how much you can produce.
The Five Major Reasons Vendors Get Turned Down – and How to Turn the Situation Around
Mass merchant doubts your ability to deliver
Remedy: Talk in advance to your manufacturer to see if he will help finance a big order, also if needed talk to family and friends to see if any of them will put up money if you should get a big order. Know what you can deliver, and be prepared to tell the mass merchant how you will finance a big order.
You don’t have EDI capability
Remedy: First check with your manufacturer, it may have EDI capability and you may be able to piggyback on its EDI capabilities. If your manufacturer doesn’t have EDI capabilities check on Google for EDI solution providers, there are many offering this service. Talk to them and do all the paperwork to launch EDI capabilities in short order if you get an order.
Product doesn’t offer enough benefits or doesn’t stand out from other products the merchant is currently selling
Remedy: Have a proven history of sales at other merchants or outlets, even sales at mall kiosks that you run yourself will help prove the point that your product is indeed perceived to be different and better and that people will buy it.
Merchant doesn’t know where to put the product
Remedy: Go to a store of the mass merchant, maybe stores of three or four mass merchants, and tell the merchants what products your product should be stocked next to. If you have a product that makes it easier to plug something in behind a TV, where should your product be placed in the store? Next to extension cords, in the appliance area, by TVs or another location? Your packaging should support this placement too. If your product package emphasizes for example how it works with extension cords, it should be placed with extension cords.
You only have one product and it is too much work to take on a one product company
Remedy: You need to sell your product through a distributor or another manufacturer. You can do this through an independent sales rep as mentioned earlier in the article, or you can find a distributor or independent rep on your own. The easiest way to do this is to get the industry trade magazine and send away for literature on all the new products somewhat related to yours in the new production sections. These sections can have 20 to 30 new products in a trade magazine so typically at least five to 10 will be sold in the same section of the store as yours. When the literature comes it will usually be with letter signed by a company representative. Call the company up and see if the would like to look at selling your product as part of their line.