Monday, January 5, 2009

The Big-Box Dilemma

Getting started in the retail industry shouldn’t be one you dive into headfirst. I received a call from a buyer for a major sporting good big-box retailer inquiring about a 10,000 unit test order for their over 100 outlets. Can you say “ching-ching.” At least that was my initial thinking.

Thought I finally hit the big-time. I just knew I had the product and it was just a matter of time before I took it to the masses. Then came the reality…how much were they really going to pay for the product. After negotiating over the course of several days, I determined the reward was not worth the thought of cheapening the brand. The price point they wanted to sell my line didn’t sit well with where I felt the line warranted compared to the competing lines. A couple of sleepless nights came to this concesus:

10,000 units = CASH
Major Retailer = Brand Awareness
Get in one and others may follow

10,000 units = Little CASH
Big-Box Retailers can crush the “little guy” with regulations (delivery, bar coding, hangers, ect.)
Initial price-point can determine your company’s future worth
Thinking short-term profitability can undermine your long-term goals

In the end, my long-term goals weren’t worth sacrificing the future of the “brand”. Take the time and build the brand with customer service and loyalty and you’ll dictate to the retailers, not the other way around.

1 comment:

Editor said...

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