Distribution: The Distance between a Great Product and a Sale – Part 1

Distribution: The Distance between a Great Product and a Sale – Part 1

Good ideas are like belly buttons – everyone has one – you have to push to get it going, then you have to run to keep up with it.

It seems there is no shortage of great ideas. The real shortage is purchase orders. Many individuals and companies as well, focus on the product and believe that sales are the result of merits alone. Most think they are going into the production business when they are really going into the distribution management business, like it or not!

Getting your good idea to the marketplace is the real challenge. Although the internet has opened a major direct-to-consumer channel, the majority of everyday products are available through retail stores, which rely on the wholesale distribution system. It’s often more efficient to get your product to market in the conventional way, especially for lower-priced items and heavy items that make it more expensive to ship.

Without proper distribution, it doesn’t matter how good or how well-priced your product is. Here are just a few thoughts you need to consider to successfully distribute your product and monetize your idea:

1. Stop! While you are still in the design phase, ask tons of questions. If it has to go through a distributer or broker, interview them to find out how it should be packaged, how it should be positioned on the shelf, and how much it should cost. Study how others have done it successfully.

2. Remember there is limited shelf space. When something new goes in, something else comes out. Buyers can only give their precious shelf space to top performers. Many buyers won’t take a chance on any new product. Their job is to maximize return on their inventory investment, not necessarily to build brands.

3. Category management is based on grouping products. If your product is an unconventional game-changer, it can actually work against you. Retail buyers won’t know where to put it. It has to fit somewhere with like products. So, in what group does your product fit?

4. Efficient shipping throughout the distribution system will keep your costs down and your sales up. Today, the most efficient form of shipping is in 40 and 44-foot containers you see on the back of the 18-wheelers, freight trains, and cargo vessels. This universal cargo unit, when full of your product, has to meet the weight and drayage guidelines set by the roads and bridges that they travel on. Are you giving this critical balancing act consideration in your design process?

5. Somebody in distribution once said, “Everybody wants to milk the cow. Nobody wants to raise the calf.” That means that your new product needs to show some traction in the market before a store will buy it, a real Catch 22. Give some thought to who will be your first customers and why. Make sure these sales are well documented. Sometimes it’s necessary to start small to prove traction.

This topic is so crucial to your success, we will devote several future posts to it. Next time we will address Staging, Strategic Alliances, Alternative Distribution, Programming, Field Assistance, Push and Pull, and Test Marketing.

Having a great idea is the easy and fun part, but actually getting it to market is the real challenge. Show respect in the early design stages for how the game is played and make the difference between the success or failure. Remember, no matter how great your product is, you have to get it in front of them before they can buy it!




About Michael Houlihan & Bonnie Harvey

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