While I believe that mistakes are learning opportunities, I also believe in trying to minimize “mistakes”. When you are pitching a buyer, please avoid the following:
- Overpromising and under-delivering. Do not tell your buyer that you can meet deadlines or handle certain volumes if you can’t. Do you have the cash flow to handle such a large order and in the timeframe requested? Can your manufacturer meet the deadline? If yes, by all means go ahead and commit. But if you don’t or if you don’t know if you can commit, then let them know you will evaluate the information and circle back with them. You do not want a buyer to take on your product, you can’t hit the deadline, they have an empty place on their shelf, and you are the cause. You are doomed and you didn’t even get started.
- Pretending you know, when you do not. If you do not know what the retailer is asking, be genuine and ask for clarification so you can make an informed decision. For example, some retail lingo: POG, MDF, Keystone, TPR, Slotting, BOGO, pay on scan or pay on hold, guaranteed sale (not what I originally thought this meant), and the list goes on. (Ok, so maybe a future blog needs to be a dictionary on retailer terms).
- Being overly enthusiastic without having the data to back it up. It’s great to show your enthusiasm. Hopefully it will rub off on the buyer. However, make sure you have the data to back up that excitement so it’s not your instinct vs theirs. (Refer to one of my prior blogs on what information to include in a PowerPoint Presentation.
- Complaining. You want – and need – to be seen as a partner who is willing and able to work through challenges. You do not want to be viewed as a whiner. It’s ok to ask questions and problem solve. But do not whine and turn off the buyer who likely has bigger fish to fry.
- Under-estimating the band-width and/or expense of taking your product to this retailer. Some food for thought:
a) Will you be able to finance the terms (i.e. you have to manufacture and pay for your product, ship your product from overseas, store it in your warehouse, ship product to the retailer, and then get paid net 30 (or worse, net 60);
b) Can you support the marketing request? A certain # of TPRs per year, a certain up-front dollar commitment.
c) Are they asking for slotting (free product)? Do they have a one-time new vendor fee of $10K?
d) Are you prepared for returns? (Note there is a surcharge for these returns.)
e) Do you have the established systems in place (fulfillment, billing, account management)?
f) Do you want or need a broker rep guiding you along the way? Factor in commission.
We all make “mistakes” and learn from them. I encourage you to ask questions. Ask the buyers, ask their assistants, ask other entrepreneurs, ask us. It’s best to have both eyes wide open so you can grow organically.
If you wish to share a learning opportunity here so others can benefit, please do so.