Your Product at Wal-Mart?
This independent inventor got her product noticed by major retailers and won big. Here's how she did it.
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The entrepreneur: Kim Babjak, 40, founder of KimCo LLC inPhoenix
Product descriptions: The Zip-A-Ruffle is a bed skirtthat zips on and off for easy cleaning. Sold primarily on QVC, theproduct sells for $29 to $44, depending on size and material. TheAnimalid is a toilet-lid cover with 3-D animal graphics designed tohelp toddlers feel more comfortable during the potty-trainingprocess.
Startup: Babjak launched the business with $1,000 in2000. In 2002, she got her first order from QVC for 2,000Zip-A-Ruffles. That shipment cost $20,000 to produce; Babjak raisedthe money from family and friends.
Sales: $750,000 in 2004; $1.5 million projected for2005
The challenge: Getting your product into major massmerchandisers like Walgreens and Wal-Mart, despite being anindependent inventor
In the past, big merchants typically resisted products fromsmall inventor companies. But now, many large retailers, includinggiants like Home Depot, Walgreens and Wal-Mart, have launched localpurchasing programs to find innovative products, giving individualstores and regions the option to test-market local products. Thesestores still have stiff criteria for performance, and inventorswon't succeed in local buying programs unless they can provethey have the means to supply nationwide. That's what inventorKim Babjak has done--and thanks to a local buying program, she hastransformed an initial investment of $1,000 into sales of more than$1 million.
Steps to Success
1. Prove you can supply a large number of products.Getting into a local buying program isn't easy, but it doeshelp to establish a strong foundation first. Babjak did that byselling her first product, the Zip-A-Ruffle, on QVC, firstnationally and then internationally, a process that challengesinventors to have 5,000 units on hand before every airing. "Myfirst shipment for QVC was ready to ship [from China] when atyphoon hit Japan," says Babjak. "When the productarrived, it had mildew and was ruined. I had to fly back to Chinaand find a new supplier who could deliver in eight weeks. The newmanufacturer actually delivered in just six weeks."
These trials and tribulations paid off for Babjak when sheapproached Wal-Mart about her second product. "To get intoWal-Mart's local buying program, I had to be sponsored by thelocal store manager and the regional manager. I'm sure myexperience selling to QVC [and] handling the logistics of bringingin products from China helped me get the managers'support."
2. Show your product can sell at retail. Babjak neverwanted to introduce the Zip-A-Ruffle in national retailers becauseshe felt "QVC wouldn't want to carry the product anymore,especially if it was available at a lower price from a massmerchandiser." But that wasn't the case with her secondproduct, the Animalid, which she felt had great retail potential."I approached the Walgreens stores, whose local buying programonly needed the local manager's approval," says Babjak.The local manager decided to test the Animalid in six stores, andthey "sold approximately 350 Animalids in two weeks,"says Babjak. "I was offered a chance at a regional testprogram. I declined because I was hoping to get into Wal-Mart'slocal buying program." The decision to pull her product fromWalgreens paid off, as Wal-Mart soon accepted the Animalid in itslocal buying program. Babjak's test run with Walgreens made astrong case that the product would sell at both Walgreens andWal-Mart for a retail price of $9.99. In April, Wal-Mart beganselling the product in some Phoenix stores.
3. Research your category. After talking to Wal-Martstore and district managers and conducting internet research,Babjak learned that Wal-Mart sold 1.5 million of a single brand oftoilet-lid covers for potty training per year. Says Babjak,"If I could capture 5 [percent] to 10 percent of that, I wouldbe very happy." 4.approach your local store manager.Wal-Mart's store managers have the power to initiate a localbuying program once they get approval from the regional manager.Not all store managers will do it, but many will if you arepersistent.
"I phoned the manager for one whole year," says Babjakof her attack plan. "Every time I would talk to him on thephone, he was always telling me they were in the middle ofinventory, or that they were extremely busy, that I should call himin a week or two. So that is exactly what I did. Finally, I made anappointment, and he loved the product from the start." Gettingapproval from the district manager wasn't a problem for Babjak:"I didn't have to make a presentation to the districtmanager; the store manager did it himself."
1. Kudos goes to managers who find successful products.The local buying program is a way for big retailers to findinnovative products, and store managers like to introduce newproducts if you can get them to listen to you. You must bepersistent, though.
2. Supply is never easy. For many inventors, supply is anafterthought. Big retailers, however, never think that way. Theyknow supply can always present problems in terms of quality,delivery and cash flow. Inventors rarely realize that it takes$200,000 or more in operating cash to support $1 million in sales,and they're rarely aware of how much inspection they (or theirhired agents) will have to do to ensure the quality of a productmanufactured overseas.
3. Exclusivity can help inventors land sales. Retailerswill give your product an extra edge if they know you'reselling the product exclusively to them. They appreciate having aproduct other stores don't carry. Other venues, such as QVC andsmaller retail chains, are also reluctant to carry the same productas a mass merchandiser because they feel the larger chain storewill undercut their price.
4. Ask for help. Store managers at the big retailers knowwhat helps a product sell. When you meet with a manager of a localbuying program, don't be afraid to ask what else you can do tohelp the product sell better. You have a good chance of landing thebusiness on a second go-around if you're able to incorporatethe manager's suggestions.
Getting On QVC
Kim Babjak, inventor of the Zip-A-Ruffle, used an agent, LauraFox of Fox Marketing in Santa Monica, California, to land her dealwith QVC. While QVC is happy to work with agents, it is alsopossible for inventors to land QVC contracts on their own.
According to QVC's Abby Schaefer, "QVC does everything[it] can to find products, and although QVC certainly acceptsproducts brought in by third parties, it is absolutely notnecessary to hire an agent in order to have your product evaluatedby QVC. If you have a great product, [it] will sellitself."
Inventors can submit their products to QVC by mail or at anational QVC Product Search trade show. These are hosted in variouslocations at least once a year. Vendors who attend the QVC ProductSearch events have the opportunity to present their products inperson to a QVC buyer. Check out the QVC Product Search website atwww.qvcproductsearch.com for more details onsubmitting your product.