From the Buyer’s Perspective: Common mistakes people make when pitching to a buyer!

By Vanessa Ting Avoid these pitfalls during buyer appointments and you'll be better off than 99% of your peers.

Tip 1:  Not walking through the store one last time and doing a quick homework refresher.  When I was a buyer for Target, nothing turned me off more than a vendor who showed up to meetings without having done their homework or step foot in my section of the store.  It was plainly obvious when vendors failed to know the brands I currently had on that shelf.  If you are trying to unseat a current vendor, you better know who they are, what their retail price is, how many facings and SKUs they have and why you are better!  So before you meet with your buyer, study and cram like this is the biggest final exam of your life!  In a prior blog, I give homework tips.

Tip 2: (SUPER IMPORTANT) Do not try to push more units to the retailer than they need.  It is dangerous to not understand the fine line between selling (shipping) as many units as possible versus shipping as many units as the store will sell.  When you’re pitching to a retailer, your first inclination is to sell as many units you can to lighten the load in your warehouse.  The buyer asks you for an order of 10,000 units and you jump for joy because it will clear out your old inventory.  Before you get too excited, think about the implications.

For ease of math, let’s assume this retailer only has one store.  If this retailer is buying inventory for a 20 week program, and your average sales is 100 units per week.  It will take 100 weeks to sell through that purchase order.  That is 80 weeks longer than the 20-week program.  That is a lot of inventory that will go unsold and will either get returned to you or incur storage and holding costs making this product less profitable for the retailer.

As a result, 1 of 2 things will happen:  1) Because the order didn’t turnover for an ideal sell-through of 85% to 90%, the buyer will assume shoppers dislike your product and that it’s a dud – and will never order it again.  2) Or, because you let the buyer place an order of 10k units without warning them it would not sell within the 20-week period of time, this buyer now thinks you lack credibility and are a poor business partner – and will not order from you ever again.

Note: For purchase orders not for a limited time program but for an ongoing basis, build your suggested order quantity by taking into account the retailer's Weeks of Supply (WOS) targets and in-store lead times in addition to their sales velocity (Sales Per Store Per Week).

Much of this also answers the question of how to stay on shelf once you get there.  But is just as important to know the first time you meet with the buyer and present your *accurate* volume forecast for how you think your product will perform in their store.

Tip 3:  Failing to address how your products will benefit the retailers’ business.  It was always a turn off to talk to potential vendors and hear, “Target is perfect for my product!”  Great.  Glad to hear.  But what is in it for me?  Don’t forget to answer this question within the first 10 minutes of your meeting. Revisit this point from an old blog.

Tip 4:  Do not misuse the buyer’s time.  If you have been given 30 minutes, then make sure your presentation can be delivered in 20 minutes with 10 minutes to spare for questions and discussion.  Get the important stuff out in the first 10 minutes.  Don’t waste time giving the buyer the history of your company and its background.  We get that you’re proud of what you’ve built, but this is not a point relevant to why your product will drive sales.  Leave this background information in the appendix of your presentation deck and let the buyer read it on their own.  Use the time saved to explain information that drives decision-making - how the product works and why it is different than competition, the sales history, proposals for marketing programs, etc.

Tip 5: Bring enough samples!  We like to open the package, feel the product, play with and take it apart – and keep a few unopened samples to later play with at our desks or in the planogram (POG) room.

Do you have any wisdom to share based on your experiences meeting with buyers?

From the Buyer’s Perspective: Five Must-Have Items For Your Retail Pitch To Buyers!

By Vanessa Ting Before you are ready to pitch to a buyer, there are “must-haves” you should first have in place.  These “must-haves” are all components of a larger business case you are building to convince buyers they need your product in their assortment.  And these components take time to build, which is why it is important to address them in our blog now!

In short, the big question to answer before pitching to a buyer is – how does your product benefit retailers?  Here are the 5 “must-have” items needed to build your business case and prove why your product meets the needs of retailers.

1. Demonstrate your product or brand will drive the retailers’ financial performance.  Buyers representing large retailers are goaled on the financial performance of their assortment.  This means they make buying decisions based on how it will earn them more revenues and profits.  For you, this means knowing the margin requirements of each specific retailer you want to work with, as well as an understanding of their pricing strategy and how your product fits in to this strategy.   Also, having proven sales history in other reputable retailers demonstrates your potential selling power and will enable you to build volume projections that demonstrate the market opportunity of your product.  Your pitch presentation should include a slide that shows your sales history at other retailers and the sales forecast you have projected for this retailer.
2. Defining your consumer target.  Knowing who your target audience is - from their demographics to their attitudes, shopping behavior and preferences (this is when doing consumer research pays off) - helps you show the type of shopper your products will bring into the retailers’ store.  Align this with the retailers’ shopper strategy and you’ve checked another box in building a compelling business case.   In your pitch presentation, include a section that profiles your target consumer.
3. Build your brand’s awareness.  Having a good product is not enough.  It needs to be backed by strong branding and effective marketing.  Good branding lends itself to future line extensions which give buyers’ confidence that this buyer-vendor relationship has longevity and can drive future business.  Strong branding creates shelf presence and makes it easier to shop the shelves.  And this fuels category growth, which translates to more shoppers and revenue for retailers.  Also, any marketing tactics like advertising or promotional deals you can offer will help drive traffic to stores – either through new shoppers or more frequent or bigger store trips.   You can demonstrate this in your pitch presentation with slides showing the success metrics of past marketing and promotional programs and recommendations for the programs you will create to drive customers to their stores.   Also include a slide that shows all the media outlets that have featured your brand to demonstrate your broad reach.
4. Mitigate risk.  Buyers are risk averse, especially anything that may erode sales or damage their stores’ reputation.  In addition to mitigating sales risk through consignment deals, consumer testing, having a proven sales record, it is also important to make sure your product meets product safety and quality testing criteria.  I have seen many vendors lose shelf space and business because they could not meet the stringent testing criteria many major retailers require.  If you manufacture a children’s product, make sure it meets CPSIA standards, but also the retailers’ criteria for drop testing, transportation testing, and the list goes on.  Sales reps, other product entrepreneurs and retail consultants can help you figure out what these requirements are.  A simple slide that shows the testing and safety standards you meet will quickly wipe away any concerns a buyer might have.
5. Spend money.  Getting into major retail is expensive.  You need to have the infrastructure built and sufficient cash flow.  More on this in an upcoming blog.  But be prepared to order hundreds of product samples before your first order.  You will need samples on hand to send to buyers, testing labs, vendor reps, retail consultants, magazine editors, PR reps, for product sampling programs, and more.  Often times these samples are expensive to produce in low production quantities.  Don’t skimp here; this is a necessary cost of doing business with retailers.  Also spend the money to get your branding and packaging right the first time around.  Changing these things mid-stream will not make your consumers (or buyers) happy. Make sure to bring samples of products to your pitch presentation and have enough to leave behind for everyone in attendance.