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Selling to retail stores AND catalogs
Hello all. We are working on a new consumer product set for introduction in the 4th quarter. We have targeted two primary sales channels, retail stores and catalogs mailed directly to consumers. I have sold retail before, but this is a first for catalog sales. So I have a few questions that I am hoping to get input.
1) Is it typical for a manufacturer to sell to both channels?
1a) If so, is it best to sell a slightly different product design OR package OR under a different brand name to one channel? OR can I sell the same product in the same package under the same brand name to both?
2) Do catalogers typically sell their goods at a higher price point?
2a) If so, can I sell them at a higher wholesale price? OR do they expect to make a greater margin?
Thanks in advance for the help.
Doug
1) Is it typical for a manufacturer to sell to both channels?
1a) If so, is it best to sell a slightly different product design OR package OR under a different brand name to one channel? OR can I sell the same product in the same package under the same brand name to both?
2) Do catalogers typically sell their goods at a higher price point?
2a) If so, can I sell them at a higher wholesale price? OR do they expect to make a greater margin?
Thanks in advance for the help.
Doug
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Comments
Ideally, I would like to sell both channels at the same time so that I can ramp up sales quickly. And to build the brand name across channels and create awareness.
Assuming that I sell both channels at the same wholesale price and also assume that the cataloger "I think" typically sells at a higher price point, would the retailer see this as a conflict if the consumer can purchase the product at their store for less? May drive some sales at the retail level.
But, that`s my big assumption. That most catalogs sell the same goods at a higher price point.
Yes, the product is in the early stage of its life cycle, so not much leverage there.
Since this is an injection molded product, the product name will be engraved into the tooling. So, adding a slightly different model would be too costly at this early stage.
I could however offer the same wholesale unit price to both with different units per package at different price points. Example, price point at 2 for 19.99 in retail and 3 for 29.99 in the catalog. Do you think this would be enough to avoid channel conflict?
Other ideas?
Thank you in advance for your advice
assume that the cataloger "I think" typically sells at a higher price
point, would the retailer see this as a conflict if the consumer can
purchase the product at their store for less? May drive some sales at
the retail level.I don`t think there will an issue if the product is cheaper at retail. There is a cost for the customer to physically go to a store vs ordering online or over the phone. However, I`m sure the catalog is charging for shipping/handling - this is usually recognized and understood by the retailer. I think the overall brand exposure will drive sales period - driving sales to the retail level will depend in your points of distribution and the price differential between the two channels.Since this is an injection molded product, the product name will be
engraved into the tooling. So, adding a slightly different model would
be too costly at this early stage. I have used a label in the past to differentiate products. The product name can be the same but you can add "limited edition", "bonus", or whatever to your catalog products.I could however offer the same wholesale unit price to both
with different units per package at different price points.
Example, price point at 2 for 19.99 in retail and 3 for 29.99 in the
catalog. Do you think this would be enough to avoid channel conflict?To avoid channel conflict you ideally should offer different sku`s. The catalog unit can include something extra. Without knowing what the product is, it is difficult to come up with some ideas. I will use a handheld vacuum cleaner as an example. You could add a specialized cleaning kit (small brushes, crevice tool that can get into the vents of your car); a couple of wipes/microfiber cloths; air freshener....The best "gut" test that I use is to put myself in the position of the people who are purchasing your product: the retail buyer, the catalog buyer and the end-customer. What do each of them value?
I don`t think there will an issue if the product is cheaper at retail. There is a cost for the customer to physically go to a store vs ordering online or over the phone. However, I`m sure the catalog is charging for shipping/handling - this is usually recognized and understood by the retailer.
This is what I was thinking also. Is there anybody here selling these two channels on a national level that can confirm?
Thanks again for the help.
Is it best to sell shopping networks like QVC or HSN first and then move into the physical retail stores and catalog OR can you sell all three channels at the same time? A national roll-out in all three channels, you might say. I know that these shows create tremendous exposure. Those "as seen on tv" products we see everywhere.
Is there a greater potential for channel conflict?
Is there a common "Channel" step by step process that one should follow?
Has anyone here sold product to QVC, catalog and retail stores before?
Thanks again
Doug