Your new mousetrap needs a test marketQuestion:
My husband and I have developed this great product, have set up our own corporation and are ready to visit the big retailers around the United States. The only thing is, we are not sure how we should go about getting these large stores to handle it. We are ready to quit our jobs and start the promotion of the product.
First you need to do a little testing of the market. For any product to be successful, it must have a unique claim.
To conduct this test, you must have a number of samples made. Don't worry about mass production or if it's perfect in all respects. Do it the most economical way, which is probably through some model shop, which you can find in most telephone books.
Now take the sample to at least 30 people, the more the better - but not to your mother, brother, best friend or cousin. It should be to people who can be objective and won't say anything just to make you happy.
Do most of them say "Why, didn't I think of that?" If not, stop right there and don't quit your jobs. You need to go further with your development because your widget is a dog.
Do most people say "You're right on track, when can I have one?" Then ask what they'd be willing to pay for the widget if it were on the shelf at Kmart. Insist on a specific price. Then ask: If it were available at the price you suggested, would you:
You can now do a nationwide survey if it's to be sold nationally, have the product priced for volume production by a volume manufacturer, test the pricing for sale through mass marketing organizations.
Keep in mind that the larger stores will market it up 25 percent to 35 percent, you'll need 10 percent to 15 percent for selling and administrative costs, 15 percent for advertising, 10 percent for warehousing, and 5 percent for miscellaneous things like interest and your salary.
How does it look after you've done the numbers route?You either have a "go" or "no go."
If it's a go, try giving a few samples to independently owned local stores and tell them about the "world's greatest widget" and ask them to put it on display.
Don't charge them for it and ask them to sell it for the perceived price you developed. This should be an incentive to get their cooperation.
Again you've got a "go" or "no go" signal, so it's wither back to the drawing board or time to do a full-blown business plan. Good luck, either way.
Bill Bryan is a counselor with the Service Corps of Retired Executives. SCORE offers counseling, workshops and seminars on small business operations. You can reach Bryan through SCORE, 515 N Court St. 815-962-0122, for information and appointments.
SCORE is a registered trademark of the Service Corp of Retired Executives
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