New Product Representation

[Ros4o]

Hi guy,

First of all I'd like to say that I find the forum very helpful and well presented.

I need some advice on how to represent a product.

I've just established a contact with a manufacturer which is out of EC. The products I can get imported come (based on initial calculation) for very reasonable price for its quality.

I am planing to target companies which have a chain of stores in UK like Cargo, ARGOS etc. The pruducts are tableware.

Now, how do you think would be the best way of contacting those companies. Shall I make an catalogue and send it over to each company or shall I ring them first or e-mail them? If sending catalogue shall I put the pricing on the catalogue or just a estimate price?

Does anybody know what is the avarage gross profit on a product in persentage( for the end retailer)? I belive is about 25%. Am I right?

As for orders, would it be fine if I ask for half of the invoice price in advance and then of course the other half on delivery?

I hope I'll get your ideas.

Thanks in advance.

 

[Alpha]

I will have to start with the bad news.

If you are not an established company with a substantial track record or have a product which no one else can supply then you will have very little chance of selling to companies such as Argos.
You will also have no chance of asking them for 50% up front or even on delivery. They will tell you what their payment terms are (Normally something like 60 days AND full credit for products unsold by the end of the catalogue if they are seasonal.


I would suggest that you finance your own stock and approach shops or sell direct on the internet.

There is someone on here who provides excellent colourful answers and would probably be a great help to you in deciding what your possible market channels could be.

Over to 10Yetis.

 

[Ros4o]

Thanks for your reply asmoore.

Just want to ask you... You said: 'If you are not an established company with a substantial track record or have a product which no one else can supply then you will have very little chance of selling to companies such as Argos'

If i can offer a good quality product to lets say Argos from which they can easily make good 100% profit per unit, are my chances still very little? Providing we all work and aim to achieve better, higher profit do you think my business would be turned down because my company only exists for 2 years?

 

[SillyJokes]

Those big companies want to be sure that you can supply what you say you will and you have to be able to supply the quantity they require but they will write the contract so that you will take the financial burden if the product fails to sell.

They are the very devil to deal with and eat small businesses for breakfast. Beware.

 

[Alpha]

Unfortunately the answer is still that you would stand very little chance.

you would have to show them that you have the infrastructure to be able to service them. Can you provide for example nationwide delivery to their distribution wharehouses on time and ensure 100% delivery schedules (Or pay a penalty for lost sales if you cannot).

Secondly consider the fact that Argos has suppliers around the globe anyway. What can you provide to Argos that the manufacturer cannot which would make it attractive to go through you instead (Sole supply contract with manufacturer- although easy to get round, merchandising expertise, better distribution channels, ability to deliver to schedule, contribution to advertising campaigns inc discounts etc etc.)

I know its sounds very negative but thsi is the way that companies such as Argos, B & Q, Homebase etc work. (I have spent around fifteen years working for companies that supply these.)

 

[gj]

I had a client with a great product once who thought he would clean up by selling through the "Innovations" catalogue etc which come with the Sunday papers and so on.

The criteria they wanted in terms of volume, pricing, payment terms etc made it unviable.

However, I can quite understand the frustration of having a product which should sell through Argos at good profit for them per unit. The thing is that they have no end of products nearly all selling at good profits and they need to do that with as little hassle as possible and without risking their reputation.

I think you should consider alternative, and probably lower volume outlets for your product - at least initially. I have a great contact in the High Wycombe area - can I get him to contact you - no pressure, but it may help you to focus on the way forward with this
Regards


Graham

 

[Ozzy]

I once heard a story about Canon I believe. The invented this brand spanking whizz bang printer (actually I think it was HP) which needed this special kind of ink.
They found a supplier and started shipping these printers out all over the world - millions of them.

However a few months down the line there was a huge ink shortage for these printers, and HP were unable to meet the demand of their customers because their supply couldn't meet their demand. Things started to get very rediculous and HP were getting some bad press.

To solve it the head of purchasing and some of his team went to visit this supplier to put some pressure on them....

.... when they arrived at this guys house frantically mixing ink in his garage they were a little surprised and found an alternative supplier...oh, and Frantic Man lost the contract.

I have no reason to believe this story is not true, but I may have got the company name wrong. The bottom line is that big companies need to protect their reputations when they are in the lime light, so they do not take the risk of dealing with new business. Its very sad, but understandable and true.

 

[a.kingston]

Hi
I am in the same position as you regarding getting products into argos.Did you eventually deal with this company and if so could you give me any advice,like who you contact,how did you present your products,what terms did you agree etc.
This is a struggle for which i dont wish to get wrong.
Would appreciate all the help possible.
Regards
Andrew Kingston

Hi guy,

First of all I'd like to say that I find the forum very helpful and well presented.

I need some advice on how to represent a product.

I've just established a contact with a manufacturer which is out of EC. The products I can get imported come (based on initial calculation) for very reasonable price for its quality.

I am planing to target companies which have a chain of stores in UK like Cargo, ARGOS etc. The pruducts are tableware.

Now, how do you think would be the best way of contacting those companies. Shall I make an catalogue and send it over to each company or shall I ring them first or e-mail them? If sending catalogue shall I put the pricing on the catalogue or just a estimate price?

Does anybody know what is the avarage gross profit on a product in persentage( for the end retailer)? I belive is about 25%. Am I right?

As for orders, would it be fine if I ask for half of the invoice price in advance and then of course the other half on delivery?

I hope I'll get your ideas.

Thanks in advance.

 

[Roark]

Getting into any high street or volume retailer will be a challenge with only a product of two and no 'big' history behind your company.

You may want to explore plugging into distribution- the people that already supply these retailers, yet your pricing and margins must be able to support a layer of distribution.

These retail guys work from a standard retail formula and the numbers all have to stack up - as much as the product must.

We had a good meeting with Disney a few months ago and have been offered terms, from them, plus 2 premier football clubs and one TV show, yet again a company with one or two products will struggle with the credibility required to supply the main street retail folks. Not impossible yet requires a good yet flexible strategy and some staying power to stay the course.

Short of me giving you the buyers emails and numbers for some of these key targets of yours, I suggest you get on the phone and let your fingers do the walking. It's a great experience. Conversely the same applies for the top 6 grocery multiples, so on and so forth. The phone is your friend.

If you require US and Canada options or EU and Eastern Europe options these are routes that should also be considered as well. Yet most products fail to make the grade in terms of usefulness, novelty, protection, and pricing. My tuppence worth.


Give me a call or send an email if you need more insight.