IT TOOK ME YEARS TO REALIZE I WASN’T GOING TO BE AN OVERNIGHT SUCCESS

One of the most common mistakes I see start-ups make relates to planning for longevity.

They fail to plan for longevity in two ways:

They don’t realize how long it can take to gain distribution and generate meaningful sales.

They don’t realize how year-one investments determine year-two and year-three sustainability.

ANSWERING THESE TWO QUESTIONS WILL QUICKLY GAUGE YOUR RISK:

1.  How long do you think it will take to establish meaningful distribution that results in meaningful sales?

MYTH:  A great product can quickly get into stores and immediately generate strong initial sales.

FACT:  Few distribution gains are made outside of line review timing, which is generally a once-a-year event.  Assuming the average line review is six months out and the combination of finalize decisions and updating modulars across all stores can take an additional 3 to 6 months which means new distribution gains are already 12 months out from today.  Additional months can be quickly added to this for various reasons outside of the vendor’s control.  And this ignores the gradual build in sales experienced by most products not supported with big marketing budgets.  For this reason, companies should be structured to carry at least 18 months of expenses before significant sales begin to materialize. 

2.  What are you doing to drive awareness and interest?

MYTH:  A great product with a great package just needs to get on the store shelf to be discovered by shoppers.

FACT:  Retailers are not responsible for helping shoppers discover your product.  Retailers make distribution decisions in response to existing demand.  Their job is to be the final step of fulfilling the sale, which is a result of the desire a manufacturer has already generated for their product.  It is the manufacturer’s job to make sure the right prospects are aware of their product and want to buy it before they go to the store.  Even with the most magnetic packaging (which is rare), manufacturers cannot rely on the store shelf as the sole source of awareness.  In fact, how shoppers engage with and search the store shelf varies significant by category.  Products that rely on the store shelf as their sole marketing platform will die a quick and silent death that goes unnoticed by most shoppers.

If any of this surprised you, revisit your timelines and budgets to make sure you’re prepare to fight the entire war, and you haven’t incorrectly defined success as winning a few battles. 

Endurance is one of the primary skills needed to succeed in retail.