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Ask Tamara: Breach of Sales “Etiquette”?

Dear Tamara,

I currently sell my product through retailers -- but I'd also like to sell it through my own website. Will retailers object -- or be less committed to my product?

–Emily, Santa Barbara, CA

Dear Emily,

toysrus1Yes, some retailers will have an issue with this, asking, "Are you a retailer or a manufacturer?" However, experienced retailers understand that a good product will have competitors. You can allay their fears by strategically pricing your product for each sales channel.

Theoretically, you have the ability to sell your product for the least amount, which gives you an "unfair" price advantage. This is the retailers' main concern – that you will undercut their own sales. I suggest, then, that you do not charge less than your retailers! In fact, if customers can purchase product from your retailers for a bit less – while also having the convenience of purchasing from you, if they so wish – you'll take on the best of both worlds. A single retailer often won't carry your entire line of products, so another angle is to sell products on your website that your retailers don't already carry.

If you are in the early stages and haven't really established retail distribution, you can adopt another strategy – selling it at the suggested retail price. Then, as your distribution grows, raise the price on your own website so you will avoid undercutting your retailers. In fact, in this way you are reinforcing their own profit margins! Also give your customers a list of retailers to purchase from on your website. This way, having your own site becomes a plus for your retailers.

Then, the choice becomes the customer's. And either way you get the sale and you've preserved your relationships with your retailers.

Have a question for Tamara? Send it to us or leave it in the comments.


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4 Responses »

  1. Many thanks for taking the time to write this post. It's been rather helpful. It couldn't have arrive at a much better time for me!

  2. Tamara,
    When offering products on consigment, what percentage do you take as the manufacturer and what does the store take?

  3. Beth,

    This is effective, especially if you aren't selling to other online retailers. And a great way to sell in areas where you don't have brick and mortar retail presence.

    Also, one of the best ways I know to get into Brick and Mortar stores is to offer your products on consignment or even free. I know this will not work for higher priced items because it would be to costly but we have had great success with this. You would be amazed how delighted a retailer is to get products for free with the understanding, of course, that if the items sell they will order more from you.

    Tamara

  4. Hello,

    I sell both through retailers and on-line. We have reduced our on-line price slightly because the shipping is so expensive - we ship priority mail or one/two day service - because we sell perishable food items. The on-line price, therefore, with shipping is comparable or even slightly higher than retail prices. We also ship to places where our products are not yet available in stores.

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