At what stage to talk to retailers?

[Liybpg]

I am currently developing a new product (idea-concept development stage), which ideally, I would like to be sold at major supermarkets.

The question is: when do I contact supermarkets to ask for their opinion about the product?

Is it:
Idea stage?

After I have done my research (of how successful this product will be with the customer)?

After I have created design of the product?

After I have created a prototype?

After I have done trials with customers?

After I have done all that and have produced full business plan?


I see pros and cons for all stages, but what would you recommend to be the best time to approach them?

P.S. not sure yet if this product is patentable - have to explore further

 

[surge700]

If you intend to build up the business yourself, the supermarket is usually one of the final stages.. you'd need a track record for smaller independents, to show that the product sells and that you can keep up with orders etc..

Another option for you to consider is licensing. If you can protect your idea, and your product really is that good, you can skip the building up stage and license your product to a large company with a track record and contacts with supermarkets. Supermarkets prefer not to take on new suppliers when they have many current established suppliers (unless the product is really good and they can't get it from anywhere else)

 

[Billmccallum]

Far to many questions unanswered to give a sensible reply...

What is the price offering to the retailer?
What is the RRP? What is their margin?
Can you deliver quantity?

As you're at the "idea-concept development stage", chances are you can't provide this level of detail yet, so any retailer will simply say come back when you know what you're doing!

 

[Liybpg]

Thanks for the advice.
I would prefer to go fully prepared (i.e. with the research, prototype, manufacturing sorted, business plan etc); but I don't really want to spend too much money and time if the product is not something they would consider at all. Approaching retailers unprepared, on the other hand, will not be very professional. Tough balance I think.

 

[surge700]

Get it protected and then ask around to see what people think. If there is good feedback, spend a bit more money to get protoypes made.

 

[Liybpg]

So far the concept got good feedback from people I know (well, not very reliable source of information) - so far so good. The challenge is going to be in engeneering and if laws of physics are not against me, then with a little thinking I should be fine.

Will try to get it protected, not sure yet that it can be.

 

[LicensedToTrade]

So far the concept got good feedback from people I know (well, not very reliable source of information) - so far so good. The challenge is going to be in engeneering and if laws of physics are not against me, then with a little thinking I should be fine.

Will try to get it protected, not sure yet that it can be.

Feedback on a new product/service from friends and family should generally be discounted, it isn't advice given from an unbiased, business focussed position.

Generally speaking, the major supermarkets aren't known for listening to ideas and then stealing them but if you have enough faith in your product to pitch it to a supermarket then it is still worth protecting it.

You should be carrying out some research at this stage. Start with the end user, not the supermarket. If there are existing products similar to yours or that fulfil the same task, then you should try to establish the overall size of this market in pound notes. Then identify the key players in this field, what share do each of them have? What % of the market do you aspire to capture and how long do you propose it takes you to achieve this?

Identify what the product could retail at, if the product RRPs at less than £100 then assume that the supermarket will expect at least a 100% ROS which means you would be giving selling to them at AT LEAST half of the RRP. Can you still make a profit on this basis? Take another 20% off, can you still make a profit on this basis?

If you have survived all of these questions and your idea is still profitable then you have a chance of at least getting an appointment with the supermarket buyers...but don't count on it.

There are a number of agencies out there (some good some bad) who can provide introductions to these buyers for a finders fee. If you are failing to get an appointment then you could consider turning to one of these.

Out of interest, what kind of product are you talking about? e.g. pet care, electrical, food etc.

 

[Liybpg]

LicensedToTrade,

Thanks for the advice, it seems that I definitely need more work before I can answer those questions. I am aware of the margins that supermarkets require, so will be working towards that.

I don't want to say what it is yet, and it is hard to put it into a category like that. I think it would an unusual product for a supermarket, that's why I think (if it works) I might have a shot a getting it into a supermarket.

 

[oldeagleeye]

Supermarkets do not go for unusual but tried and tested and pesonally I think that unless you can get the product licenced by a much bigger company your wasting your time.

Supermarkets want guaranteed delivery and in the sort of volume that the small business cant promise unless it i something lik organic veg and even then they will screw the supplier to the extent they would be better off with a market stall.

Go back to square one OP. Find a niche market. A product or service that doesn't need expensive prototypes or a factory tooling up. Then you might have a viable business on your hands.

Rob

 

[Liybpg]

I think licensing can be a route to consider. As you say - supermarkets won't be particularity keep on an unusual product, but if it is a bigger company that they know - there's more chance.

Licensing can be even better due to that I have a full time job as well, so if I want to run it myself I would have to quit at some point.

Any tips on how to start thinking about licensing? What kind of royalty could I get? Is everything that is required of me is to develop a product and after that it is the responsibility of the company?

I don't see this product being a niche market. I think if it is not a mass product - it is relatively pointless.

 

[surge700]

Licensing royalty depends on the product rpp, cost, volume, the company you're licensing it to etc etc, so its a piece of string situation.

Get it protected as much as you can and approach companies in the same industry with it.

 

[laguna]

It's pointless talking about it really!

The very first thing you need to do is go see a patent attorney and ask if its patentable.
See definition of a Patent: HERE
If it is then great, otherwise it may still be protected through Design right which is "automatic" meaning you don't have to apply for registration.

Design right protects the design of the shape and configuration of articles for a maximum of 15 years in the UK.
You can register (RCD) design rights in Europe (all member states) but these unlike the UK include surface embellishment designs as well. Unregistered designs in Europe only last for 3 years.

Good luck
Chris

 

[oldeagleeye]

I think licensing can be a route to consider. As you say - supermarkets won't be particularity keep on an unusual product, but if it is a bigger company that they know - there's more chance.

Licensing can be even better due to that I have a full time job as well, so if I want to run it myself I would have to quit at some point.

Any tips on how to start thinking about licensing? What kind of royalty could I get? Is everything that is required of me is to develop a product and after that it is the responsibility of the company?

I don't see this product being a niche market. I think if it is not a mass product - it is relatively pointless.

How can anyone give you any dea on royalty if we don't have a clue what the product is and I don't think that you have either. It is only in your mind.

There is no prototype. You haven't got a clue how much that would cost let alone the cost of the product if mass produced and even if that were worked out would the product even sell.

The wind up radio was a great idea. It still took the inventor about 5 years to get it too market. You may welll have an idea that you think is original but the fact that it is not out there doesn't mean that it would sell. Some bright spark may have come up with the idea years ago and foundthere was no demand.

In summary. I am sure there are 1,000s of people out there that think if only I could invent the right product I would be rich.

There are hundreds of 1,000s that dream of being a pop star with a No1 hit.

Do you know the percentage of a £10 quid CD that new artist would get.

A fiver perhaps. 3 - 2 perhaps just £1 quid. No it's not even worked out in pennies but points.

Stop dreaming. Start thinking what you can do given what skills and capital you have.

Rob

 

[Gemma R]

Hi, I'm not too sure why type of product you have as you didnt seem to mention it in the post, but if at any point you need help with design please do get in touch. I recently helped a few start-ups with their product packaging with a view to getting into retail. One of them has already started trading and another is on the buyers scheme with Sainsburys. For a look at our work please visit the website www.eyelinecreative.com I would like to hear more about your idea/project and if we can be of any assistance.

Thanks
Gemma

 

[Liybpg]

oldeagleeye,

I don't see anywhere in my posts where I was 'dreaming'. I look at this objectively and I completely understand that this might not work and I see the reasons why it might not work. I am not a nutty inventor and I have business sense. I didn't know anything about licensing and that's why I asked what kind of royalty could be expected. This is probably an unreasonable question due to huge variety of individual circumstances and negotiations, which I now understand.

I will do a proper research, and will assess routes to market. I have got some skills and have access to some people with the skills that I don't have. I don't have much capital now, but (if everything works out fine) I will have access to quite good amount of money from my workplace - which is always nice to have.

 

[Liybpg]

laguna,

Thanks, I will try to protect it as hard as I can - I will spend the money if necessary as this could be make or break for the business.

 

[laguna]

laguna,

Thanks, I will try to protect it as hard as I can - I will spend the money if necessary as this could be make or break for the business.

Your welcome
In the meantime if you need help with researching your market potential or any design related issues etc. just PM me.

If you feel that you need to talk confidentially to someone such as business advisor's, bank managers, accountants, potential investors etc. then Ill send you a copy of a Confidentiality Agreement (free) which you can adapt for your own purpose.

Don't even talk to your own mother without one signed!

Good luck
Chris

 

[Esk247]

if you do manage to get a set/batch/prototype selection of these products ready, and they fit within the 'target market' of the supermarket shelves, you can always approach your local supermarket itself and ask the manager for a little area at the tills.

some give it a whirl, others dont, it would need to be made to British Standard, factory produced etc and safety checked (whatever it is).