Submitting a product to retail chains and gauging Interest with a business Proposal

Discussion in 'Growing and Managing a Business' started by bcurko, Sep 28, 2010.

  1. bcurko

    bcurko
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    Hey BAF users,

    I'm currently trying to market a product from O/S to retail chains in Australia. I have contacted ALDI who said I have to submit a business proposal for them to consider me and the product. Can someone elaborate on what they are exactly asking for? The product I am trying to distribute is a new type of sports tape that isn't available in Australia.

    I'm worried that if I send a sample to any large retain chain they will bypass me and go direct to the manufacturer..

    Can someone point me in the right direction because I'm struggling to find any websites which can help me with this dilemma.

    Thanks Brenton
     
  2. Fergal

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    Welcome to Business Advice Forum Brenton, thanks for joining and posting your business questions.

    The major retail chains often work on a low cost business model. They will buy in large quantities and negotiate the best deal possible so that they can beat their competition by selling at the lowest price. If you alert the retailer to a product that has the potential to be profitable for them, they are quite likely to purchase from a major distributor or as you say, directly from the manufacturer.

    One approach to take would be to contact the manufacturer and ask if they can give you exclusive rights to sell their product in Australia or perhaps in a smaller geographic area, within Australia. If you can get this exclusive agreement you can then contact the retailer with a lot more confidence that they won't cut you out by going straight to the manufacturer.

    The manufacturer will want to know what you bring to the party before giving you an exclusive agreement. They will need to be confident that you will represent their product in a professional manner and that you are a good reflection on their brand. Next they will need the confidence that you can sell the product on their behalf. If they do give you an exclusive agreement it is quite likely that, that exclusivity will be dependent on you reaching minimum sales targets. In other words if you don't reach the sales targets, they will have the right to sell the product through other agents or direct to the retailers.

    Could that approach work for you? Please do post back with your thoughts and ideas, we will do our best to help you and point you in the right direction.

    Good luck with it!
     
  3. bcurko

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    Thanks for the reply Fergal,

    I contacted the manufacturer and this was the reply given

    Dear Brenton,

    We appreciate your suggestion!
    All our team agreed to offer you the exclusive right for a full month to be able to reach the monthly quota on a regular basis.
    We really hope this brings fruitful results for both parties. Please let us know when you would like to commence this agreement.



    I really don't want to risk losing the possibility of owning the rights for the product to a retain chain. So what would you suggest I do ?

    Regards Brenton
     
    #3 bcurko, Sep 28, 2010
    Last edited: Sep 28, 2010
  4. Fergal

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    A month is really a very short time period for an exclusive agreement. Would they agree to extend that time period, provided that you could meet the quotas they mention? Obviously quotas would need to be confirmed and agreed by both parties.

    Have you thought about what service you can offer of value to the manufacturer? Is there anything you can do, that would be so valuable to them, that it would not pay them to start selling directly to the retailer?
     
  5. bcurko

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    The agreement that they have provided is valid for 12 months assuming I meet the quota, which is better for me but means I must meet the quota or else .. I'm currently discussing business propositions with an associate of mine who is involved in the medical business which may be able to provide me the knowledge and contacts for this business.

    The advantage of me being here is I can handle stock and all orders without the waiting times for O/S items and email only support.. That and they could claim tax as I would be a registered ABN holder and be the responsible promoter of the products.
     
  6. Fergal

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    Sounds like you are making good progress with it bcurko, I hope it goes well for you and please do let us know if there is anything else we can help you with.
     
  7. Jahan Choudhry

    Jahan Choudhry
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    bcurko good to see that you have come to Business Advice Forum and are benefitting from the advice given here.

    A couple of things.

    1. Any successful business is a learning curve. Even the most successful entrepreneurs found it tough at first and did not know all the answers, this is part and parcel of any new business adventure.

    In life nothing always goes to plan which is why dynamism is a key business skill.

    2. The fact that the O/S (Overseas, for those of you who didn't know what it meant) agreed to give you the exclusive right to sell their product is a positive sign which you should take confidence from as it means they do have some confidence in you.

    Also from their perspective they are eager to make money and are willing to give you a chance to show good and useful you are.

    3. From this you will have a foundation from which you will continue to learn about this sector and about this industry, including making the relevant contacts.

    4. In terms of your marketing you can also create an exciting power point presentation (which is of course absolutely free) to supplement the more detailed business proposal you submit to the retailers.

    Good luck with your project.

    Be confident!

    Be positive!

    Be persistent!

    ....and you will succeed.
     
  8. bcurko

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    Hi guys, sorry for the lack of replies been really busy lately,

    In regards to my product I think I may be able to gain some interest from an associate of mine who is high up in the football industry. I am just trying to workout how to take the next leap forward I'm thinking a presentation, website, registration of a company.

    The only issue I have at this current time is the lack of capital necessary to market the product. So if anyone could give some advice on what they would suggest I do to try and market a sports tape without me going into debt. I'm under 18 so no loans for me or anything regarding banks.

    I'm currently seeking registration approval from the AUS government to resell the product within Australia. Just a side note should I register a company pty ltd. Or just stay as a sole trader? I'm thinking of getting a website loaded so if anyone is interested they can contact me. Good idea?

    Any help would be greatly appreciated.

    Yours Sincerely

    Brenton
     
    #8 bcurko, Oct 18, 2010
    Last edited: Oct 18, 2010
  9. Fergal

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    Thanks for posting back to update us Brenton.

    You will get a much better response to that question if you start a new thread in our Sales & Marketing + Online Promotion & SEO section. Please include some details of your product and the type of potential customers you will be selling to, so that our members can help you more.

    I'm not familiar with Australian business structures. It might be an idea to stay as a sole trader until you have made some sales. This will help you to keep your administration time and costs down to a minimum, until you have made sales and started earning money from the business. However, it might be worth having a quick chat with an accountant about this, most of them won't charge for a first consultation. Perhaps a friend or relative could recommend a good local accountant to you.
     
  10. bcurko

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    Well Just to update you guys I've let the product idea drop I just couldn't market it or make any sales .. nobody I emailed gained interest so I've decided to be rid of the idea... until I find something else instead.
     
  11. Fergal

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    Thanks for the update bcurko.

    Did you try phoning potential buyers? You will get a much more helpful response from a phone call than from an email.
     
  12. bcurko

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    The biggest issue is I'm trying to sell a product that already exists.. what makes my product superior to the competitor? I'll try calling some physio's tomorrow and seeing if anyone is interested but it's going to be hard..
     
  13. Fergal

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    If it was easy everyone would be doing it. It's a cliché I know, but it's true nonetheless.

    Seth Godin has written an excellent blog post that is closely related to what you are experiencing, personally I found it extremely motivating, perhaps you might also find it helpful - Sure, but what's the hard part?
     

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