From inventor to salesperson November 12 2013
To continue my Big Kahuna (AKA Walmart) story from my last post – it was 2010 and I was getting my business ready for a phone call to a store manager at a local Walmart. I had secured $2 million in liability insurance, GS1 UPC barcodes and certification through the WBENC as a woman owned business. I called one of my local Walmarts and requested a meeting with the store manager to present my product for review. She agreed. I spent the next two weeks feverishly working on my presentation.
The meeting went great. I actually met with two managers from two different stores. They loved my product and talked about merchandising it not only in the baby section but also in the camping/outdoor section and the gadget aisle. They had an upcoming regional meeting with seven other store managers and wanted to take my prototype to that meeting to get additional input. I was thrilled. I left that day with the paperwork needed to become a "Local Purchase Supplier", and I felt like I was in.
At the time of this presentation, I was aiming for a retail price of $9.95. I could manufacture it for about half that cost, and I thought I could sell it to Walmart for about $7.50 and they could turn around and sell it for $9.95. After the regional meeting of the store managers, I got a call with their feedback. They all loved the idea too but insisted that they could not sell it for more than $5.97 retail in their stores.
I don't know if you are aware, but the Walmart stores spread across this country are not all the same. The one I originally pitched to is considered an "upscale" Walmart, carries slightly different merchandise, and can get away with selling products at a higher price point. There are many of these, but this is the only one in my region. Where the other store managers thought the price should be reduced to $5.97, the local store manager who I originally met with felt that it would sell in her store at $9.95 and was willing to give it a try.
Now keep in mind at this point I had one working prototype. In order to manufacture this product, I had to invest in tooling that would be about the cost of a luxury car. My plan was to get a buy-in from Walmart large enough to justify this expense, or maybe even offer them an exclusive if they were willing to pay for my tooling costs. They were the first big box retailer that I approached, and I was willing to negotiate just about anything if it meant a large order like I wanted and needed to get this off the ground.
So I was hoping for an order of hundreds or (dare I dream) thousands of units.
The store manager I had been working with told me that she would like to start small to see how quickly they move. She wanted to buy twelve. That's right – twelve.
There was no way I could spend thousands of dollars on tooling for an order of only twelve units. This was the first time in the process that it really occurred to me... it's not all about the idea. You can have a great idea and a fancy smancy patent to protect it, but you have to be able to sell. It was time to figure out how to do just that. And hopefully more than twelve at a time.