MISTAKE #46: You focus on the wrong competition

I’m assuming your launch plan includes getting your product in distribution on retail shelves (and not just selling through direct marketing or Amazon.com or other online storefronts).

If this is the case, your product will almost always need to displace an existing item already on the shelf.  On occasion, new shelf “white space” is created as categories significantly expand or manufacturers discontinue brands.  But most of the time, you only win when someone else loses. 

At the same time, your prime prospecting has hopefully revealed where unmet needs exist.  You already have a clear idea of what brands you will source volume from.  You know what your future buyers are buying today.  Or, ideally, you can show that your product primarily brings incremental shoppers and incremental sales to the category. 

If you haven’t done this yet, or you’re still refining this dimension of your sales pitch, be sure to consider the following caveats:

Sometimes, the bigger they are, the harder they fall

Is there a dominant market leader in your category?  Does one company have 50 SKUs or over half of all shelf real estate?  Are you thinking it will be easy to take down one or two little SKUs in their assortment?  Be sure to consider: 

These companies are smart enough to know the bottom-performing SKUs are always at risk of deletion:  Any well-run company knows when their items are at risk and few are willing to let go of hard-won distribution.  Realize that they’ve probably got their own lineup of replacement products they’ll be pitching as a source of new revenue should the existing items end up on the chopping block.

Retailers really appreciate simplicity:  The distribution decisions made by suppliers involve far more than just items they believe will produce the most sales or most profit.  Buyers are also looking for operational efficiencies.  To this end, the buyer might be content to keep more of their business with a single supplier (knowing some SKUs are less than optimal) versus taking on the time and effort to add an additional supplier for the sake of gaining one or two slightly more appealing SKUs.

Deletion of small SKUs can be death for small vendors:  Buyers don’t like to see products they took a chance on fail, and they certainly don’t want to be associated with bankrupting small businesses by deleting their entire distribution.  If your strategy is to go after completely replacing a small brand, make sure you’ve done your homework to know if the buyer could have any irrational commitment to that product.  I once worked with a food client that kept receiving “get out of jail free” cards from the buyer because he both believed in the mission of the company and knew deleting his distribution could put the company belly-up before it had a chance to prove out its model.  I’m sure he sat through many line reviews that identified my client as a prime deletion to make room for new items.  Yet he repeatedly decided to give it more time to find success.

Are you surprised with any of these? 

If so, take time to revisit this part of your selling story.  Remember that part of giving the buyer a compelling reason to say YES to your product is making them comfortable saying NO to the product currently occupying the space you’re asking for.