For our food manufacturing clients, especially start ups, from our friends at Entrepreneur.com

ENTREPRENEUR.COM - From Storeroom to Store Shelves full article

From Storeroom to Store Shelves

Use these 9 tips to craft a pitch that will have retailers filling out purchase orders.

By Jennifer Grzeskowiak    |   October 13, 2008

Neil Reilly, 46, a former commodities trader, used to walk the streets of Manhattan after the markets closed, trying to pitch his organic, kosher dog treats to retailers. Now Manchester Center, Vt.-based Wagatha's, co-owned by Reilly and Norman Levitz, 52, is projecting $1 million in sales for 2009. Reilly, like other entrepreneurs, learned that getting a product onto store shelves takes patience, persistence and a strong pitch.

Even connecting at first with a buyer for a larger retailer can take time and multiple phone calls. If cost allows, send your product to potential buyers before calling. When you do make contact, they will already have your product in hand.

Once you have a meeting set up, consider these nine tips for getting your product into stores and the hands of customers.

1. Address how your product compares to similar ones the retailer already carries. Adding a new vendor can be costly for a retailer. Buyers are taking a risk by agreeing to dedicate limited shelf space to a new product. Compel them to take a chance on your product by showing why it's better. Maybe your headphones have exceptional sound quality, a higher-than-average margin and come in five different colors.
2. Discuss how you and your product fit in with the retailer's culture. "The people behind the product and their mission are just as important as the product itself," says Harvinder Singh, a regional local products forager for Whole Foods. "We look for products that are made with high quality, organic ingredients, have a low carbon footprint and are socially just, meaning the growers and producers are paid fairly and treated well." Also consider the retailer's image: Is it high end or budget conscious? Trendy or traditional?
3. Demonstrate demand for your product. Retailers, especially large ones, often calculate revenue per square inch of shelf space. They want to know before they agree to carry your product that there's going to be demand for it. Tell them where else your product is carried or how many units you've sold through your website. Maybe a local boutique only bought 20 of your necklaces in an initial order but sold out of them in three days. Also, know your market. This includes the age, gender, income and interests of your target customer. Compare how your market overlaps with that of the retailer.
4. Show your passion. "If it's a quality product, you just have to tell your story," Reilly says. "You have to be really honest and believe in yourself." As part of his pitch to retailers, Reilly often will eat his dog biscuits, which are made in Wagatha's own facility.
5. Present a finished product, including packaging. Retailers want to know everything about your product. If you can't have your packaging ready for the pitch meeting, at least know what it's going to look like. Include a logo and artwork, and what materials you're going to use. Keep in mind that some retailers will be looking for recyclable packaging. Reilly says that some home stores and hotels he's pitched his dog treats to have been more interested in the packaging and what the product is going to look like on the shelves.
6. Address how your product will fare in difficult economic times. If your price point is comparable to or higher than your competition's, focus on why people still need or will want your product. Retailers, including Whole Foods, are focused on finding the next big trends, Singh says.
7. Discuss your ability to deliver. Buyers often are given a set amount of money to work with. If you tie up their funds and fail to deliver your product on time, you are wasting their shelf space and costing them money. Be honest with yourself and the retailer about how much of your product you can deliver and when. Failing to deliver on time also could result in hefty fines.
8. Be prepared to discuss your business plan. Major retailers in particular will want to know that you can continue to deliver your product as promised and that you will be professional to work with. "I love people with ideas and passion, but there's a whole other side to it," Singh says.
9. Don't exceed the allotted time, and leave enough time for questions. If buyers have important questions about the viability of your product and don't get to ask them, they might go with a surer thing.

Be strategic about the retailers you meet with. Major chains like Target, Best Buy and Costco may seem like a gold mine. But first realistically evaluate your ability to supply them with the amount of product they need. Consider starting smaller to gauge demand for your product. Also look for companies with programs supportive of startups. Whole Foods, for instance, has a Local Producer Loan Program for small, local producers.

Also consider hiring a manufacturer's representative or agent, someone to do most of the legwork for you and who doesn't get paid until your product gets placed.

"Go out and hit the street," Reilly says. "Just make sure you believe in your product."