When the time comes for inventors to sell new products, they
frequently head down the same, predictable path: targeting small
markets and getting small footholds. Eventually, expanding their
sales network becomes a top priority-and that calls for selling to
big retailers. Small businesses face some marked disadvantages
here: they only have one product, and they aren't big enough to
guarantee delivery.
How can inventors get around this problem? By private-labeling
their products. In this arrangement, inventors market their
products under another company's name. Inventors benefit
because their products are supported by the marketing power of an
established company. Private-label partners benefit because the
relationship broadens their product line, which enhances their
competitiveness.
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Marilyn Searcy, 46, was wallpapering her home when she got the
inspiration for It's a Keeper, an attachment that fastens to
the top of a ladder and holds either a 2- or 5-gallon bucket.
It's a Keeper lets users keep their tools at arm's length
while working. "It's a great product for anyone who's
ever had to go up and down a ladder to get the right tool for the
job at hand," says Searcy, whose company, Searcy Enterprises,
is based in Fremont, California.
Searcy started to sell It's a Keeper herself in 1995, and
expects her 2000 sales to exceed million dollars. Looking back,
Searcy says she had bigger goals when she started selling her
product, but was stymied by her inability to secure larger
accounts. "I could never get into the larger retailers,"
she explains. "I was too small a supplier, without any
advertising. Another problem I had was that, at first, my product
didn't fit every type of ladder."
Searcy tried to expand her distribution by changing the product.
"I improved the product so one model could adjust to fit any
ladder in the market. This way a retailer would not have to worry
if It's a Keeper would fit the ladders it was buying,"
says Searcy. But, she explains, the retailers still wouldn't
buy. In an effort to penetrate large retail chains once and for
all, Searcy decided last year to pursue a private-label arrangement
with a major ladder supplier that sold to Wal-Mart, Kmart and Home
Depot. At press time, the contract was in its final phase of
negotiations, and Searcy hoped to have the deal signed soon.
When entrepreneurs sell their innovations on a private-label
basis, those products sell for less than wholesale. But even at the
lower price, Searcy will benefit: The agreement will eliminate her
marketing and sales costs for that product, and the increased
volume will have allowed her to cut manufacturing costs.
Don Debelak is a new-business marketing consultant and the
author of Bringing Your Product to Market (John Wiley &
Sons). Send him your invention questions at dondebelak@uswest.net.
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