Selling through Hardware Store Representatives and Local Buying Programs
{Don Debelak’s new book, Turning Your Invention into Cash is now available on Amazon for $3.49. Go to Amazon.com and enter inventions Don Debelak to purchase. From the author of Entrepreneur Magazine’s Bringing Your Product to Market.}
Hardware stores represent some difficult challenges for most inventors. Hardware stores are typically either a part of a group, such as Ace Hardware, Hardware Hank or True Value, or they are a part of a large national chain such as Home Depot, Lowes or Sears. While inventors can attend the national hardware show, www.nationalhardwareshow.com, and possibly pick up some stores, most sales are done either at the headquarters of the big chains, or by attending small state shows for franchisers, for instance the Minnesota Ace Hardware show. Those shows are covered by representatives that work the booths and talk to their contacts. For instance, to get into an Ace Hardware show you first need to sell Ace Hardware on being part of their line. The people with the best chance to get you into the shows and big dealers are reps. While you can still sell on your own to Home Depot or Lowes, who could buy a large number of products from you, the reps have the contacts that can help you meet with the right people.
Another factor that makes reps valuable to an inventor or small entrepreneur is that the hardware industry often requires promotional programs to help get a product started which could be a co-op advertising program or some other marketing initiative. You need to expect to spend 5 to 10% of your sales dollars setting up a marketing program. Reps know how to structure a program so you get the most bang for your dollars invested, and they know how to negotiate a great deal for you that will still appeal to the store. Due the complexities of the hardware market, I recommend that you find a representative and have him help you for a share of your company. Offer the rep 2% per year provided he spends 5 to 8 hours a month helping you launch your product, with a maximum ownership of 6 to 10%. Having a rep on your team will increase your chances of success, help you raise money, and have you move into the market faster than you could on your own.
Finding a rep for your team – local efforts
There are two ways to find a local sales representative, one just by asking the owners of the hardware stores in your area for names and contact information of strong local reps. Another tactic is to subscribe to the industry’s two leading magazines, Hardware Retailing https://onestopinventionshop.net/10-steps/ and Home Channel News http://www.homechannelnews.com and then send away for product literature that is listed in the new product section. When the literature comes, frequently it will have the name of a local representative. Some of the reps will go to lunch with you if you give them a call and they will review your product and give our ideas on how to sell it. Many of them will respond positively to an overture to become a small stockholder if they like your idea.
Finding a rep for your team – national efforts
The national hardware show (http://www.nationalhardwareshow.com) is typically held every May and the hardware show has a special location for inventors (https://onestopinventionshop.net/10-steps/) or entrepreneurs with new products. Reps looking for new products or a company to invest in will often go through the inventors showcase to see if there are any new products that might catch their eye. The show makes it economical for inventors to attend and attending the show could help you find the reps that you need.
Another national program to investigate is with the National Retail Hardware Association which has a vendor partner program where you can get your product in front of reps and hardware chains. https://onestopinventionshop.net/10-steps/
Do You Need Help Finding Reps?
We sell a list of over 170 sales reps for the hardware market for only $24.99. Click here to buy.
Selling to Lowes and Home Depot
Both Home Depot and Lowes offer web sites with directions for manufacturers who want to submit their product directly to them. The sites are:
Selling to Lowes
www.gs1us.org/library?EntryId=81&Command=Core_Download
Selling to Home Depot
https://onestopinventionshop.net/10-steps/
Local Buying Programs
I originally wrote the article below for Entrepreneur magazine in 2005. Often you can’t get in to large retailers right away without proven market success. One way to avoid being a small start-up without success is start with a local buying program which many larger retailers support. This article explains how one inventor/entrepreneur used a local buying program to successfully launch her product.
Entrepreneur, August, 2005 by Don Debelak
Mass appeal: a local buying program could be the key to getting your product on the shelves of major merchandisers
THE CHALLENGE: Getting your product into major mass merchandisers like Walgreens and Wal-Mart, despite being an independent inventor
In the past, big merchants typically resisted products from small inventor companies. But now, many large retailers, including giants like Home Depot, Walgreens and Wal-Mart, have launched local purchasing programs to find innovative products, giving individual stores and regions the option to test-market local products. These stores still have stiff criteria for performance, and inventors won’t succeed in local buying programs unless they can prove they have the means to supply nationwide. That’s what inventor Kim Babjak has done–and thanks to a local buying program, she has transformed an initial investment of $1,000 into sales of more than $1 million.
Steps to Success
PROVE YOU CAN SUPPLY A LARGE NUMBER OF PRODUCTS
Getting into a local buying program isn’t easy, but it does help to establish a strong foundation first. Babjak did that by selling her first product, the Zip-A-Ruffle, on QVC, first nationally and then internationally, a process that challenges inventors to have 5,000 units on hand before every airing. “My first shipment for QVC was ready to ship [from China] when a typhoon hit Japan,” says Babjak. “When the product arrived, it had mildew and was ruined. I had to fly back to China and find a new supplier who could deliver in eight weeks. The new manufacturer actually delivered in just six weeks.”
These trials and tribulations paid off for Babjak when she approached Wal-Mart about her second product. To get into Wal-Mart’s local buying program, I had to be sponsored by the local store manager and the regional manager. I’m sure my experience selling to QVC [and] handling the logistics of bringing in products from China helped me get the managers’ support.”
SHOW YOUR PRODUCT CAN SELL AT RETAIL
Babjak never wanted to introduce the Zip-A-Ruffle in national retailers because she felt “QVC wouldn’t want to carry the product anymore, especially if it was available at a lower price from a mass merchandiser.” But that wasn’t the case with her second product, the Animalid, which she felt had great retail potential. I approached the Walgreens stores, whose local buying program only needed the local manager’s approval,” says Babjak. The local manager decided to test the Animalid in six stores, and they “sold approximately 350 Animalids in two weeks,” says Babjak. “I was offered a chance at a regional test program. I declined because I was hoping to get into Wal-Mart’s local buying program.” The decision to pull her product from Walgreens paid off, as Wal-Mart soon accepted the Animalid in its local buying program. Babjak’s test run with Walgreens made a strong case that the product would sell at both Walgreens and Wal-Mart for a retail price of $9.99. In April, Wal-Mart began selling the product in some Phoenix stores.
RESEARCH YOUR CATEGORY
After talking to Wal-Mart store and district managers and conducting Internet research, Babjak learned that Wal-Mart sold 1.5 million of a single brand of toilet-lid covers for potty training per year. Says Babjak, “If I could capture 5 [percent] to 10 percent of that, I would be very happy.”
APPROACH YOUR LOCAL STORE MANAGER
Wal-Mart’s store managers have the power to initiate a local buying program once they get approval from the regional manager. Not all store managers will do it, but many will if you are persistent.
“I phoned the manager for one whole year,” says Babjak of her attack plan. “Every time I would talk to him on the phone, he was always telling me they were in the middle of inventory, or that they were extremely busy, that I should call him in a week or two. So that is exactly what I did. Finally, I made an appointment, and he loved the product from the start.” Getting approval from the district manager wasn’t a problem for Babjak: “I didn’t have to make a presentation to the district manager; the store manager did it himself.”
Lessons Learned
KUDOS GOES TO MANAGERS WHO FIND SUCCESSFUL PRODUCTS
The local buying program is a way for big retailers to find innovative products, and store managers like to introduce new products if you can get them to listen to you. You must be persistent, though.
SUPPLY IS NEVER EASY
For many inventors, supply is an afterthought. Big retailers, however, never think that way. They know supply can always present problems in terms of quality, delivery and cash flow. Inventors rarely realize that it takes $200,000 or more in operating cash to support $1 million in sales, and they’re rarely aware of how much inspection they (or their hired agents) will have to do to ensure the quality of a product manufactured overseas.
EXCLUSIVITY CAN HELP INVENTORS LAND SALES
Retailers will give your product an extra edge if they know you’re selling the product exclusively to them. They appreciate having a product other stores don’t carry. Other venues, such as QVC and smaller retail chains, are also reluctant to carry the same product as a mass merchandiser because they feel the larger chain store will undercut their price.
ASK FOR HELP
Store managers at the big retailers know what helps a product sell. When you meet with a manager of a local buying program, don’t be afraid to ask what else you can do to help the product sell better. You have a good chance of landing the business on a second go-around if you’re able to incorporate the manager’s suggestions.
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