I can tell when someone is on the wrong track in a business start-up, that they are headed for failure. I will hear them say:
1. I know this will sell.
2. I don’t think this will work.
Number 2 usually is associated with the price or costs being too high, or the impression thereof.
Both thoughts are delusional. The fact is, any such assessment is entirely the province of the customer, and you cannot know until you’ve talked it over with customers, the buyers. So the question I get is “How to reach the buyer? Do I call and make an appointment?”
Now assuming you are working as a start-up, and your value in the marketplace is a new solution to a problem (another topic) and you are approaching the specialty stores, then the answer is you will never reach a buyer yourself by telephone, or any other approach as a seller. Why would a big shot buyer who is responsible for a million dollars an hour moving out of several stores spend 30 minutes with you? So as a business start-up, you never try to sell your products, or even get orders starting out. This is not contradictory.
As I said earlier in the week, if you do not have customers you do not have a product. Well, which comes first, the product or the customer? The chicken or the egg?
Well, business start-up is when you have a (pregnant?) chicken about to lay an egg, you have both at once. How so? First you get your product idea as laid out earlier. Then you need to assess your idea to find out if there is customer potential. So you have to get the idea in front of buyers, but without trying to sell. You only want feedback, enough feedback to warrant having samples made of your idea. Feedback to the degree that you feel you would get enough orders collectively from as many customers as necessary to cover the suppliers’ minimum order requirement in a workable amount of time, profitably
As past partcicipants have scolded me, I do not emphasize how little it takes to have enough "new" to get to this point. OK, there I said it. So on to the process.
In the sales game the first step is approach, then qualification, and then agreement on need, and so on, but in the start-up process you’ll need only go as far as “agreement on need.” Don’t start a business, or put a dime into anything, until you have these three steps covered. After that you can turn the job of actual selling over to a professional, an independent sales representative, who will make the sales calls to the right people.
Your job is to set it up for the sale rep to go in for the kill. The first time youn ever speak to a sales representative is when you can name buyers who desire to place orders for your products now. (Which will come later.)
Sticking with Plan A (search this website for the meaning thereof) you are first visiting stores to assess the viability of your idea, by visiting as a customer of the store (true) trying to buy your idea (true). You want to get to where a buyer says "it is a good idea and does not exist.." by working up through the clerks who first greet you to a decision maker. I use the formulaic “visit each of six stores six times each” to convey the idea that this is a process of working your way up from the welcoming clerks to a decision maker, by means of several visits to each of several stores. Back and forth, more or less. But in any event, your “approach” (as in the sales process) is to try to buy your idea.
Your “qualifiaction” is to push your inquiry up to the level of decision maker, one who can buy. This is the person you want to hear say "it is a good idea and does not exist.."
Agreement on need is when that person, with authority to buy says "it is a good idea and does not exist.."
With several stores affirming that, you can proceed with design and sampling of your idea. With that affirmation, doors along the path to samples open rather easily.
So you go into stores with only an idea, and only as a customer of that store. But what if the decision maker, buyer is working off-site? In smaller stores, say single unit specialty store, the owner is the buyer so there you have no problem getting to a decision maker for feedback. In bigger specialty stores, such as say Neiman Marcus, the official buyer is no doubt unreachable.
But the department manager inside a given store no doubt has soome authority to buy some rpoduct to test out in her department (and share the experience of any success with other buyers). Because we sell new, we necessarily are given small orders to start.
On page 200 of my book there is a Nordstrom PO, for some seven stores, giftware item, total order amount about $200. This is typical. People usually assume such an order would be some $20,000. Not true.
“New” is necessarily untested, so buyers want to test out new, since no sane buyer will ever take a risk on a product. And if they see new that they want to test, the next question is "what is the minimum..?" In-store buyers can typically have a budget for small test orders of new , promising products. In any event, no buyer is going to go heavy on anything new. Over time you may see order quantities rise if the item has proven to sell well, but usually more business is a result of more design changes based on new iterations in response to buyer feedback. Look at the evolution of the Apple computer, especially the first one.
It does not take much to achieve “new” enough to be new enough to test. If you work too hard on design, then you very well may run ahead of market feedbaclk and have to undesign undesired features which prove unbeneficial from the market feedback. Again, each iteration you are only looking for enough orders to cver the suppliers minimum order requirement, over and over. You are not looking to build up more volume, you are looking to have the same minimums more frequently.
If at any point in this process you reveal or imply your intention to be a vendor to this store, then any possibility of ever selling to the store ends at that moment. The secondary reason is becuase at this point you cannot possibly know if you will ever be a vendor to that store. Even with an affirmation”it is a good idea, it does not exist” you still have no idea whether you can come up with a sample of the idea agaisnt which the buyer will ever place an order. You kill your business aborning because you said too much. Calm down.
The primary reason the process is ended the moment you reveal you intend to start up a buisness is that it will be strike 10,001 against you. 10,000 other wannabees have preceded you into the store. 10,000 wannabees have wasted the buyers’ time with their "cool product they found", or the tedious attempt at emotional blackmail of the “fair trade” item, drooling excitement of the “can’t fail, Oprah-bound” idea. The buyer’s miserable experience of all of those others count against you personally and totally if you reveal your intentions at this point in the process. Just don’t do it.
it is necessary and sufficient in starting up to get from buyers (who believe you to be a customer) "it is a good idea, but does not exist."
Get there.
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