A Small Retailers Perspective
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:
- 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.
- 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.
- 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.
- 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.
- 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.
- 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.