Let’s Save Your Hardware Startup from Retail
This article is inspired by conversations I have on a regular basis with startup CEOs, CMOs, or VP of Sales regarding their product businesses trying to expand business in the US retail market.
Many startup executives are very intelligent and motivated people; however, mistakes are made not for a lack of available advice or strategy sessions but because of a lack of execution experience or capacity. Actions speak louder than words — just as sold products speak louder than fancy product features.
So let’s get into this…
Retail Connections vs Back-End Experience
Launching your physical product to market means establishing the right sales channels. Many startups focus primarily on retail connections, sales representation, and introductions to retailers or distributors. This makes sense on the surface; however, if you’re like many CE hardware startups you probably don’t have a strong retail background. And this tends to be where issues arise..
While “getting your foot in the door” with a retailer is useful, it’s not enough to rely on your product’s uniqueness or crowdfunding momentum to establish and scale out consistent retail growth. Think of sales representation as a tool. It’s the expertise behind your tools that make or break success.
Having retail connections simply sets up opportunities. There’s still a lot that you and your team need to develop and manage:
- Is this retailer or distributor really a good fit for your brand, price, financial situation, and target audience? Or will you lose time/money?
- How will you actively drive end-consumer sales with your retailers and distributors? And no, they won’t do it for you.
- How will you actively manage logistics, sales forecasting, sales teams, and your ecosystem of sales channels?
Retail is Like a Big Fish — And You’re No Fisherman
As a product startup, retail can be similar to fishing for a very large fish in a very small boat. It doesn’t take many wrong turns to tip over your boat, you can only pack so many supplies, and it may take you a very long time to see results.
Even if you are lucky enough to hook a large fish (retail buyer), successfully reeling it in requires proper planning and patience. Reel too fast and you’ll snap the line, and there’s a near-certainty that fish won’t be biting again any time soon. In fact, he may tell his friends not to bite either. A tempered approach is required.
Let’s say you’re successful and catch this fish. It’s now taking up all the space in your boat while flopping around, and attempting to bring it to shore will likely result in disaster.
- Take time to develop a complete retail strategy and make sure you’re 100% prepared by asking others who’ve done it.
- Target appropriate “low-hanging” (not necessarily small) retailers and distributors to build your brand, sales history, marketing strategies, supply chain, and financial foundation before you go after larger channels.
- Understand the resources, time, and experience required to execute retail activities from end-to-end.
I hope my conversations and this article is helpful for you, or at the very least sparked some ideas on bringing your product to market. Feel free to share or comment below!