A Small Retailers Perspective

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Why Sell Through Specialty Retail?

If you have a product that is ready for the retail market, give some thought as to how you want to position it before automatically opting for the mass retail sector.  In some instances, the product may be better suited to niche retailing through the large number of independent specialty-market retailers. The advantages of this approach include:

  1. Generally you will be dealing directly with the storeowner (as opposed to a buyer in a large corporation).  This gives you a more direct link with your customer set and you will receive more meaningful feedback.
  2. You can more narrowly select the market that will see your product.  (Specialty retail stores are targeted to categories of people buying specific types of products — whereas national retailers aim at the mass market and spatter a multitude of merchandise at them.) What you are selling may not have broad market appeal and if you can match the product to the audience you may be more successful in selling it.
  3. Although your total dollar sales may be less than those realized in the mass market, you should be able to sell at a higher profit margin — making your own breakeven point easier to obtain.  Most specialty store retailers use a 2 times mark-up over cost.  Since they are selling merchandise not available in the larger national stores, they sell on value rather than on price.
  4. Some very good products are never intended to be mass marketed and positioning them in a good specialty retail environment will better showcase them to their audience.  Obviously products like handmade arts and crafts show much better in the gallery setting, but even the toy industry realized the merits of positioning in a niche retail setting when several years ago many of the higher-ended toys failed to sell in the "Toys R Us" setting — yet did very well in the upscale independent toy stores.  Now as a matter of policy, many of these brands will not merchandise through mass retailers.
  5. If your product is one that can easily be customized to fit a home décor or user preference, the one-to-one relationship of the small store owner to their customer set can be a boon to your sales.  They have the time and the experienced staff to work through a custom order both with you and with your customer.
  6. Even if you ultimately want to sell into the mass market, marketing your product in a specialty retail setting can be a good test of its potential.  You are not pressed to produce in large quantities, and can keep your front-end investment down until you're more certain your product will mass market.  You can also use the more personalized feedback of the store owner to fine tune your product before bringing it to the mass market.  Further, the fact that your product is selling well in the smaller market place gives you a definite selling advantage when approaching the larger retail chains.

If you decide to go the specialty retail route, be prepared to do some legwork to locate the right setting for your product.  Draw stores from your personal knowledge, listings from local chambers of commerce, or by scouting the area's shopping centers.  Try the yellow pages, but be aware that the information in them is dated and you may miss new entries in the marketplace.  Also the subject listings don't adequately present the array of choices you have for marketing your product.

For instance, if you developed a children's game and are trying to place it, determine what types of retail stores carry children's items.  ou would come up with a list that might include general gift stores, children's clothing stores, toy stores, and perhaps even some hobby or craft stores.  If the game had a theme to it, such as sports, you might even place it in sports cards stores or the like.

To test market the product, try independent stores in your own community — that you can easily visit and stay in touch with the storeowner.  Make sure that the ones you approach not only carry the same category of merchandise, but the same price range of items.  Set up an appointment with the storeowner, present your product and ask for feedback on the viability of their adding your product to the store.  If they are not interested in adding your product, ask them if they know of another store in the area that may be interested.

Once you select a store, work with the owner to determine how much of your product and what types (if your line consists of more than one item) would make the first best display — and then try to get the products into the store as soon as you can.  If you're selling a seasonal item keep in mind that most stores buy well in advance of the season and take delivery up to three months before the season starts.  If, for example, you're selling Christmas merchandise, don't expect too many sales in the month of December.  Most Christmas buying is completed by July.

Although specialty retailing doesn't fit everyone's plan, it can be a very rewarding route for some.  Give it some thought when you are planning your market strategy.

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