Goose
Island Beer Co., a Chicago brewpub and regional brewery, had
its work cut out for it three years ago when it decided to sell
beer to wholesalers and retailers in other Midwestern states. The
market for specialty beers, while flourishing in the Pacific
region, had floundered in the Midwest, and many beer companies had
gone out of business trying to break into the market. But in its
first full year of business, Goose Island sold more than 20,000
barrels of beer, an achievement almost unheard of in the
industry.
"Goose Island Beer Co. is the only Midwestern microbrewer
to have grown into a regional producer in its first calendar year
in business," says David Edgar, director of the Boulder,
Colorado-based Institute for Brewing Studies, a division of the
Association
of Brewers. "You just don't grow that big that
fast."
What did Goose Island do that other brewers trying to edge into
the Midwestern market did not? Goose Island president and founder
John Hall attributes much of his company's success to good
marketing-not to consumers, but to wholesale and retail buyers.
"A product only makes sense if it makes sense to the
buyer," says Hall. "To sell a product, you have to
understand what the buyer wants."
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Many tips for selling to buyers are industry-specific. For
example, catalog companies such as Lillian Vernon
Corp. in Rye, New York, need shippable products, so the company
requires prospective suppliers to prove they can package their
products well. But other companies, such as retail stores that
display products on the shelf and "gourmet of the month"
clubs that repackage products themselves, care more about the label
than the box.
Some tips span industries, however, so we asked successful
manufacturers and buyers who work with small businesses what it
takes to get a product on the shelf. Here are their 8 steps to
success:
1. Develop a Quality Product
This step may sound like a given, but many manufacturers
underestimate the importance of the quality of the product
they're selling.
In some industries, such as software, a quality product with
great market potential will virtually sell itself. "The most
important thing is to have a good idea that you can execute well
and that someone with the ability to distribute and market sees an
audience for," says Harry Gottlieb, president of Jellyvision Inc.,
a software developer in Chicago. "People doing full-blown
software demos are rare, so publishers tend to be fairly willing to
look at people's material."
Some manufacturers argue that it's more difficult to get a
product to buyers in other industries. QVC Inc., a West Chester,
Pennsylvania-based TV shopping channel, looks at 80,000 sample
products per year but puts only 12,000 to 15,000 on the air. Many
of the products that don't make it are good products. Even in
the most competitive industries, however, ingenuity and quality can
go a long way.
"Never underestimate the importance of a good product and
word-of-mouth," says Bert Suarez, founder and president of
Diesel Radiator Inc., a Melrose Park, Illinois, manufacturer of
heavy equipment radiators. "About 25 percent of our new
customers are referred to us by other customers."
2. Understand the Market
According to Hall, one reason for Goose Island's instant
success was its complete understanding of the industry. "We
asked ourselves why what was happening in the other regions
didn't happen here," Hall says. "That showed us what
others did right and wrong, and gave us a big advantage. If other
companies had looked around like we did, they would have seen and
done the same thing."
It may also be a good idea to start small. Before approaching
buyers at large companies, entrepreneurs should try selling to a
local store. According to Judith Barker, president of American
Traditional Stencils, a Northwood, New Hampshire, stencil
manufacturer, this creates awareness among larger buyers. "We
spent years selling to individual stores that were part of
chains," says Barker. "It was only recently that we
contracted with the corporate headquarters of those chains. Selling
to the smaller stores probably played a part in getting the
corporate contracts."
"Find any store in your area-not more than one in an area
if you're in the gift industry-and sell something as a
brand-new product," says Mary Anne Johnson, co-owner of The
Chandlery, a Roswell, Georgia, gift shop. "Develop some
accounts that give you enough capital to figure out what really
sells. After you know your product is salable at the retail level,
and after you have the capacity and efficiency to fill orders, then
you can approach buyers on a grander scale, such as at trade
shows."
3. Create a Marketing Plan
Retail and wholesale buyers don't exist in a vacuum-they
know the market and usually recognize products that have potential.
But small businesses without track records have no credibility.
That's why they need a marketing plan.
Case in point: Goose Island. Before approaching buyers, the
company crafted a marketing plan that left no question in
buyers' minds about the potential success of its brews. In
addition to solid research showing the profits that could be gained
in the fledgling Midwestern specialty beer business, Goose
Island's plan showed buyers the microbrewer would follow
through. "We made sure buyers were aware that the category was
growing and that there were good margins for buyers in it,"
says Hall. "Then we showed them how we envisioned taking the
product to market."
Hall advises entrepreneurs to develop a plan that works for
everyone in the supply chain. "Your plan has to work for
distributors, because they have to feel confident that retailers
are going to order your product, and it has to work for retailers,
because they have to feel confident that consumers are going to buy
it," says Hall. "Our plan worked because it supported the
entire distribution chain, from packaging to advertising."
4. Develop Collateral
According to Pam Marker, a Greenwich, Connecticut, marketing and
design consultant and former small-business owner, one of the best
ways to grab and keep a buyer's attention is to put together a
catalog to display your products. "[A catalog] is your best
salesperson," says Marker. "Hundreds of your competitors
are contacting the same buyers you contact. You want to give buyers
something they can keep so they'll remember you."
Catalogs and other materials, such as presentation kits and
price sheets, don't have to be glossy, expensive brochures. The
key is to look organized, says Johnson, who is impressed when her
suppliers have product specification sheets, price lists, order
forms and invoices.
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