Amy Wenslow is the CEO of Products to Profits, a consulting company that specializes in helping small businesses & hardware startups get their products onto the shelves of retail stores. There aren’t a lot of resources focused on how to grow a hardware startup into a business post crowdfunding. A lot of attention has been given to developing a product and then crowdfunding the product. However, if you truly want grow into a hardware business you’re going to have to scale and get into retail to sell your product to more consumers.
So it is with great excitement that we were able to ask Amy some questions and have her share advice with our readers on getting products into retail. This is your opportunity to get some free insider-information that can help you to take your business to the next level!
Questions and Answers
Greg: I have the pleasure of having Amy Winslow, founder of a great company called Products To Profits. Today, she is going to help us learn a little bit more about how to take products to market. Thanks Amy for joining us!
Amy: You are absolutely welcome Greg, I am really excited when I get a chance to talk with people that are launching new projects and putting something innovative out in the space.
Greg: One of the questions that come up often amongst hardware startups is how to get connected to buyers. What do you suggest startups can do to start reaching out and make that connection?
Amy: When you’re looking to connect with a buyer, one of the first things you want to do is try to work with the connections and contacts you have in your network. Number one thing to focus on is making sure you are talking to the right people. We see people make the mistake of finding a contact with a Walmart buyer or a Target buyer and when they call and first speak to them they go, “blaalalalalalalala” all about their products. Then it turns out it’s not even the right category buyer or it’s an assistant buyer! So you want pay attention to the categories that the buyers are working in because there are a host of buyers at every one of the large corporations that buy different categories of products.
Second, you want to make sure that your pitch is concise. If you’re doing the pitch in email make sure to proof read it for grammar. Your pitch should be personable and friendly, but it has to put forth the case of why your product earns a place in their store. I really want to stress that the buyer is interested in how much money your product is going to generate per square foot in their location. Even with online sales, it’s how much of your product are you going to be able to sell. The more prepared you are in the beginning of the conversation, the more it sets you up to look like you’re going to be an amazing partner for them.
Greg: What are some of those key numbers or key points that you should make sure to address, you know, in that first phone call, or that first email?
Amy: The first thing you’ll want to address is if you have any sales history with them. For example, if you are moving from selling with Target online to Target in-store they are going to be able to look at the online sales history. You’ll want to be able to address questions around any little glitches or things like being out of stock for a month or your sales tanking online. You’ll want that information prepared and ready to be addressed, but don’t lead with it and say, “Well, you know when you look at your sales history, you’re going to see there was a dip in February.”
Some other things you should be prepared to talk about are the sales numbers, the costs, delivery timelines and how long until the first order. You want to have your data about the product lined up, which means having UPC codes that are right and descriptions that are right. Have the back office of your product set up because if they like it, they’ll ask for forms pretty quickly and you want to make sure you’ve got those pieces in place.
Greg: Great information. Yeah, we have seen a number of startups go through that cycle and not be prepared for those next steps
Amy: It’s such a speed bump that takes emotional energy out of your sales and the pace can get a bit exhausting sometimes
Greg: What are some of the things that buyers are looking for in new products?
Amy: Well, IoT is obviously huge with buyers but one of the main things that they’re looking for is – how is this product driving sales? When you’re talking to a buyer the things they look at are: Is it relevant to their consumer? Meaning – Does this product work for the market they sell to? They are going to look for products and the see if they into the market that they are serving. You want to have good packaging in place with UPC’s that are set up properly for the area you want to sell into.
The buyer is also going to look at: Do you have good instructions? Do you have sales history? When you send in your sell sheets, have them be clear, send some lifestyle images that show the story of the product and talk about the benefits, not the features. A lot of people making products will focus a lot on the features of their product, but people and buyers really want to know what the benefits are of using your product, who’s going to use it, and is it their market? Those are the really big pieces to cover.
Greg: Absolutely. How is it going to change their life in a unique way, right?
Amy: And are the benefits a positive thing? Does the buyer see that somebody is going to naturally understand your product and see that it’s for him or her? Packaging has to support that experience as well, so that you can get the best price on the product, which gives you and buyers store location the best profit margin you both can get.
Greg: Many of our startups haven’t developed sales yet, but they maybe had a great crowdfunding campaign with some numbers that can be pretty compelling. How do you see that fitting into the buyer relationship?
Amy: It fits really well. If you have done a great crowdfunding campaign you should hopefully have some data about what had people donate or what compelled people to click on an ad. If you ran ads and tested a bunch of different messages, that’ll tell you what features are most important about the product. By running Facebook or Twitter ads you can frequently get demographic information about who actually clicked on your ads.
This can be huge when you’re talking to buyers because you can say this product does really well with a certain demographic. You can also angle your sales presentation and say you found a certain feature of your product was popular and drove our sales. You can also mention you see the buyer’s customers purchase other products that have similar features.
Greg: So they’re looking for both marketing information to make sure that it’s the right fit for their demographic and their category?
Amy: Yeah, absolutely. Investors are always looking at crowdfunding platform statistics to see what’s driving the success with crowdfunding campaigns. One of the big points about crowdfunding is making sure products raise enough money to actually deliver on the gift that they get in exchange for the donation, because that’s really the right way to be talking about it. It’s much better for your business to say donation with gift, then to say pre-sales of product.
That’s a best practices nuance, but you have to raise enough money to actually deliver on the reward. Then the other part is to make sure the company stays in communication with the early adopters because they’ll spring gorge you and you can get testimonials that’ll help you with buyers, which in return can help you with other sales.
Greg: What do you see as some of the biggest mistakes among startups that are trying to develop those relationships?
Amy: The biggest mistake a startup business can make when trying to develop buyer relationships is to randomly go to every contact they can find. We always recommend that people separate the opportunities into three buckets or tiers. If you know that this product should be selling in a Nordstrom or Best Buy then you don’t go sell it to Costco first. I see people take any opportunity that comes across as a good opportunity and they try to make it work, but that’s not the case! Some opportunities will kill the bigger strategies of your business. If you take Costco orders first and you set weird pricing, you may never get the high-end order. A very big piece of advice is to keep your opportunities in sequence.
Other challenges people face are putting off dealing with some of the infrastructure of their business. I would really recommend getting professional help with things like your accounting. It will save you time, effort and help build momentum a lot quicker than of you had done or learned it by yourself. My advice is to hire the expertise and learn alongside them.
Greg: We have certainly found besides just the knowledge and the experience of doing it, you also get those relationships, the network, all of those maybe good ideas that tried and failed, and all the understanding from that, that is a little bit under the surface that really goes a long way to moving quick and getting sales and early ramping up
Amy: I am a big fan of learning from other peoples mistakes so that I don’t have to make them all myself.
Greg: Yes, absolutely, it’s enough mistakes to make by yourself right?
Amy: Exactly, so, I love that question, thank you for asking it. I want to just finish up with one piece here, and I’d really encourage everybody to keep in mind that if you’re talking about your business as a small business, you actually are limiting it. I really encourage people to think about their business in terms of where it’s going and to get committed to that vision. The reality is that the majority of jobs and economic growth in this country comes from small businesses!
They come from innovation and somebody thinking creative and taking action. I just really want to make sure that everybody keeps that in mind – it’s not just a small business, you’re running a business. You’re expanding and growing into it all the time, no matter where you are.
Greg: That vision goes a long way to really framing the kinds of questions, and how you answer those questions, I think certainly.
Amy: I’d really like to invite your community to come on to the live Q&A calls that I do every other Monday. They are on our website homepage – people can see more there. You can find that at www.productstoprofits.com. We specialize in working with hardware and consumer products that want to go to very large volume sales quickly, effectively, and in the smoothest way possible.
Well there you go! There’s certainly a lot of information to take away from that and hopefully you learned something from the discussion – we sure did.
While there is an awful lot to sift through there, a number of things really stand out. One is to make sure you do your research. If you’re approaching a buyer then know your numbers; especially if you’re already selling! Likewise, make sure that you’re collecting qualitative information from your backers and site visitors rather than just looking at the quantitative data. Don’t ask how many clicks your ad has – ask who has been clicking it!
Keep an eye on the internet of things if you’re looking for new hardware opportunities. And don’t take every opportunity that comes your way: stay focused on your bigger strategies.
We are very grateful to Amy for sharing all this information with us and if you’d like to hear more from her, then be sure to check out the website where she provides lots more free information in the form of videos and blog posts.