No Time? No Problem

An Easier Way

Teaming up with a small to midsized company that makes related products is the most effective way to market a product when you don't have time to do it yourself. You can set up a private-label sale to the company, or sign a marketing agreement with the other firm to sell your product for you under your own name.

This tactic is relatively easy to execute if your product is truly novel and innovative. Striking a bargain with an established company benefits you in two ways. First, it frees you of the sales and marketing workload; second, a company with an established sales force and distribution channels will probably sell many more products than you could on your own.

There are several reasons manufacturers like private-label deals. One is that having a larger product line makes it easier for manufacturers to sell to retailers. Retailers prefer to buy from manufacturers with larger product lines because it's less work and because a complete line of products from one company, with uniform packaging, looks better on the store shelves than a hodgepodge of products from different companies. Manufacturers also find that private-label arrangements help them attract distributors and independent sales agents.

A private-label sales agreement typically won't interest larger manufacturers because an additional product adds only a small percentage to their sales volume. But small and midsized companies will be interested if you've got an innovative product that can increase their sales by 10 to 30 percent.

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This article was originally published in the July 1999 print edition of Entrepreneur with the headline: No Time? No Problem.

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