Startup Brand Builders Must Not Underestimate the Retail Sales Processhttps://c-suitenetwork.com/advisors/wp-content/themes/csadvisore/images/empty/thumbnail.jpg 150 150 MIchael and Bonnie Harvey MIchael and Bonnie Harvey https://secure.gravatar.com/avatar/dfe7dbddd973f4b41b9f0e9b47ad6323?s=96&d=mm&r=g
Too many brands make the mistake of over-simplifying the sales process. We’ve seen some brands state in their sales section, “Will sell at retail.” Yeah, sure—good luck!
Our society constantly misjudges the sales process. This “shopper’s” perception has no place in any business plan. What kills most brands is the lack of adequate sales, so how could anybody expect to build a consumer packaged goods (CPG) brand without respecting the sales process?
It’s easy to see how this simplified view of sales begins. As you shop, you stroll down the aisle of your hardware, drug, or grocery store, looking at the branded CPGs stacked up, lined up, and replenished. This looks easy—an automatic, programmed system. You can get your product there with no trouble, and be front and center! Right?
Many startup companies emphasize administration, raising capital, and production. Wrong! Their focus should be on sales—because that’s everyone’s Achilles’ heel. A sales strategy cannot be separated from a brand-building strategy. In the CPG arena, true brand-building success is in sales, especially in the critical first stages.
Many CPG brand builders successfully secure financing, and it boggles our minds! Their investors should be concerned about precisely where and how their money will return to them. After all, it’s from the customer! But, this route is complex and convoluted in most cases. It is reliant on the brand-builder’s success in accessing the market, and carefully implementing a sustainability strategy.
Having been through it all, we are astonished that this piece of any business plan can be summed up with, “Will sell at retail.” It’s like the advocates and their backers think this product is so incredible, so revolutionary, and at such a value that retailers will blindly purchase it, promote it, and keep it stocked. Sure, maybe one day—once it’s a household name, has immediate recognition, and represents a large percentage of the retailer’s profit. But until then, no way! Not for starters. You’ll have to earn your spot on that shelf.
Maybe you’ll catch a lucky break and get your product into Target or Walmart. But without continued sales, your product will be discontinued. This will stain your brand as you expand. Buyers will ask, “Wasn’t your product kicked out of Target?”
We always look for the sales plan first when looking at a business plan for a CPG brand. Is it sustainable? Affordable? Practical? Still, we are stunned by the lack of specifics and the naïve overgeneralizations.
We think a good CPG sales plan should include how the market will be accessed and why, how expansion will be supported by cash flow (not just relying on outside funding), and how preliminary sales will be serviced. We want to see a comprehensive breakdown of the cost of sales. This can only happen once you understand and respect the distribution channel, and what everyone in that channel wants in order to advance your brand. How will the brand be built at each level? Neglect at any point can ruin your brand.
Sure, your new product is amazing. Sure, it’s in demand. Sure, it’s revolutionary. But is it for sale? And is it constantly on the shelf?