If you have a product you would like the high-street chains to stock, you don’t need to be a large firm or even to have made any sales
HOW big does your business have to be before a high-street chain such as Mothercare, Argos or Superdrug will be interested in stocking your products? Do you need to have sales of £10,000, £100,000 or £1m?
The answer is that you can be a lot smaller than you may think. If you have something the retail giants like and think they can sell, you do not need to be a business at all or to even have produced anything. In fact, a lone entrepreneur scribbling ideas at his or her kitchen table has as much chance as a firm employing 20 people.
Helen Haider, a retail expert who has worked with companies taking on new products, said: “If the idea is great, if you believe in it and there is a market there, and the retailer likes it, then it doesn’t matter that you haven’t sold 50,000 already.
“Sometimes being new and being completely different gives you that edge. Mothercare especially is more prepared to take a risk on people coming in with new ideas because they want to show that they are innovative. That is how they grow. They need to have fresh ideas.”
So how do you go about making an approach? First of all, do your homework. Before you even pick up the phone or start crafting an e-mail, you need to do three things: find out everything you can about the retailer you want to stock your product; know your product inside out - who you think will buy it and how much you think it should sell for; and, crucially, take out the necessary patents or trade-marks.
Haider said: “It is really important that you protect your product or idea before you start seeing these people because although most big companies like Boots or Mothercare are pretty sensible and will say to you, look, we don’t want to see you until you have got that done, smaller retailers might not be so honest. You might lose your idea so you have to be very careful.”
When you are ready to pick up the phone, the person you should aim to speak to is the buyer. Big retailers will typically have buyers for different departments so make sure you think about which one your product would fit into.
If you manage to make contact, your primary goal is to secure a face-to-face meeting so you can show them a sample of your product.
Haider said that if you are taking an expensive prototype along to the meeting, you would be wise to make two, as you may not get one of them back.
“Be prepared to leave a prototype there because these guys will want to test it and look at it and pull it apart. So if you have only got the one, I suggest you get another,” she said.
Another way to get a big retailer’s attention is to take a stand at a trade fair and invite the buyer to visit you there.
If the retailer likes what it sees, it may either offer you a licensing deal, in which you receive a royalty for each product sold, or a lump sum to buy your product idea outright. Either way you must be prepared to wait a long time before you see your product in a catalogue or on the shelves – typically up to 18 months.
This time last year Shani Dale, a 38-year-old mother of four, was a full-time primary school teacher dreaming of being her own boss.
Now she supplies baby slings to Mothercare and has her own fledgling business, Slingjax.co.uk , that sells slings online.
For Dale it was not difficult to tell Mothercare about her product - unusually, it contacted her after hearing about her slings.
“Initially they just wanted to make sure that I knew what I was doing. I told them all about the product and showed them how it worked. This took several meetings because I had to meet different people, culminating in their safety experts.”
Mothercare decided to sell her Napsack Baby sling on its website. Because Dale was already producing her slings, it took just four months for Mothercare to put her products on the site.
Despite her initial fears of dealing with a high-street retailing chain, Dale’s experience of Mothercare has been entirely positive.
“Everybody I spoke to warned me that I must be careful because these big companies rip off the little guys. I went to see them with a fair amount of trepidation, thinking they were going to eat me for breakfast, but actually they were very supportive.”
Mothercare said that its door is always open for innovative products, regardless of who is behind the idea: “Mothercare always welcomes new and interesting ideas and concepts. We look for originality and practicality alongside other qualities that will make it suitable to sell in a Mothercare store. We offer customers a diverse product range, which means there is a wide variety of areas that innovations can fit into.”
Mothercare said the best way to make an approach is by letter or e-mail, preferably with a photo of the product attached.
“Presentations and further information will be required only if the product idea is taken any further. In this instance a meeting will normally be arranged and the process will run from there,” it said.
Ray Hanks is an independent business adviser who runs a confidence-building class for businesses. He said that being small can work in your favour if you are trying to become a supplier to high-street retailers.
He said: “History is littered with fantastic relationships between large companies and small companies. Many big companies find they actually get a better service from smaller businesses. It means they get to work with the top team and so the relationship can be more productive. Small businesses with niche experience do particularly well.”
Hanks has this advice about contacting the buyers of large retail stores. “Make it as personal as possible. So always target named individuals. And make sure your product is absolutely relevant - there has to be a match between what you are asking and what they might be interested in. You have to understand their agendas to get their attention.”
Two websites that can be helpful in tracking down the person you want to speak to in a particular company are Electricmarketing.co.uk , which provides the names and contact details of the top decision-makers in the top 1,000 companies in the country, and Pearlfinders.co.uk , which for a fee will give you the details of big firms that are looking to appoint new suppliers.
So how can you tip the odds in your favour? Hanks said: “Always look at it from the buyer’s point of view - what are the logistical problems in terms of production, in terms of cost and distribution? Is there a size issue, is it compatible, is it environmentally friendly?
“Showing that you have thought about these issues can make a lot of difference.”
However, Hanks warns that even if your product is taken on by the likes of Mothercare or Argos, and even if it sells well, it is unlikely to make you a fortune. He points out that for products that sell for a retail price of less than £100, under a licensing agreement the best that you are likely to get is 4%-5% of the retail price.
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