The right distribution in the right stores can skyrocket your growth while trying to sell your products in the wrong stores can be fatal. It can even derail and bankrupt your brand. You need to know the difference and how to avoid this fatal mistake.

Do you want to know how to get more profitable distribution? You might be surprised to know that not all distribution is healthy for your brand. Having your brand in the wrong store can even derail and bankrupt your brand. You need to know the difference and how to avoid this fatal mistake.

As a grocery manager for Price Club (now Costco), I quickly learned about the importance of product placement and how displays could explode an item’s sales.

As a DSD chip salesman, it was all about getting my products  merchandised in the right place to drive impulse sales. A large display by the front doors or by the checkout lanes worked like magic! All I needed to do then is simply keep them full.

When I went to work for Unilever I learned about the power of distribution and it’s compounding effect. Simply put, having distribution in more stores locked in sales from more stores which quickly added up. It was all about getting your products slotted into the category schematic. It was the marketing department and their deep pockets that then drove sales using traditional promotional methods.   

This is the model you’ve been taught and it works well for brands with deep pockets, huge sales teams, and robust marketing engines. Essentially products that we think of as commodities.

This model, however, does not work as well for niche items and specialty items with small marketing budgets. Chasing after distribution that does not align with your core customer can be fatal to your brand.

Download the show notes below

BRAND SECRETS AND STRATEGIES

PODCAST #162

Hello and thank you for joining us today. This is the Brand Secrets and Strategies Podcast #162

Welcome to the Brand Secrets and Strategies podcast where the focus is on empowering brands and raising the bar.

I’m your host Dan Lohman. This weekly show is dedicated to getting your brand on the shelf and keeping it there.

Get ready to learn actionable insights and strategic solutions to grow your brand and save you valuable time and money.

LETS ROLL UP OUR SLEEVES AND GET STARTED!

Do you want to know how to get more profitable distribution? You might be surprised to know that not all distribution is healthy for your brand. Having your brand in the wrong store can even derail and bankrupt your brand. You need to know the difference and how to avoid this fatal mistake.

As always, Thank you for listening. This show is about you and it's for you. In appreciation and to give you a competitive edge, there’s a free downloadable guide for you at the end of every podcast episode. I always include one easy to download, quick to digest strategy that you can instantly adopt and make your own, one that you can use to grow sustainable sales and compete more effectively with. Remember, the goal here is to get your products onto more store shelves and into the hands of more shoppers.

On these shorter episodes, there is a YouTube component where I may share visuals to help illustrate the points that I'm making, the things I'm talking about. So you will want to also check out the videos as well.

If you like this episode, share with a friend, subscribe, and leave a review or comment. If you want to be the first to get more brand-building content like this, subscribe and hit the like bell so you will be the first to get the tips and strategies as soon as they become available.

Today, I want to talk about good and bad distribution - what the difference is and why this matters to the overall health and future of your brand. The right distribution in the right stores can skyrocket your growth while trying to sell your products in the wrong stores can be fatal. Today’s episode is focused on the three potential landmines that can derail and even bankrupt your brand.

As a grocery manager for Price Club (now Costco), I quickly learned about the importance of product placement and how displays could explode an items sales.

As a DSD chip salesman it was all about getting my products merchandised in the right place to drive impulse sales. A large display by the front doors or by the checkout lanes worked like magic! All I needed to do then is simply keep them full.

When I went to work for UniLever I learned about the power of distribution and it’s compounding effect. Simply put, having distribution in more stores locked in sales from more stores which quickly added up. It was all about getting your products slotted into the category schematic. It was the marketing department and their deep pockets that then drove sales using traditional promotional methods.

This is the model you’ve been taught and it works well for brands with deep pockets, huge sales teams, and robust marketing engines. Essentially products that we think of as commodities.

This model, however, does not work as well for niche items and specialty items with small marketing budgets. Chasing after distribution that does not align with your core customer can be fatal to your brand.

Consider ethnic foods that only appeal to certain pallets. It would be difficult if not impossible to sell some of those items in neighborhoods that they don’t appeal too.

That’s where today’s conversation begins. Having distribution in the right stores can help you explode sales BUT getting your products in the wrong stores can derail and even bankrupt your brand.

One of the biggest mistakes that small brands make is that they accept distribution opportunities from anyone who offers it. Let me give you an example. You go to Expo West, Expo East, or the Fancy Food show and a retailer comes by your booth and says that they want your brand in their stores. Congratulations! This is the primary reason you attend trade shows.

You immediately begin to figure out how to fill those orders without thinking about how that retailer aligns with your longterm strategy. This is why I spend so much time talking about the importance of a solid business plan on this podcast. Here is where you need to throughly evaluate each and every opportunity to determine if it makes sense. Here is where you need listen more to your head and not your heart.

I see this all too often. A brand on the east coast getting distribution on the west coast without having the resources or the infrastructure to support it. They are putting the cart before this horse.

In this instance, you need to be absolutely certain that you can support your brand at the highest levels BEFORE you say yes to the opportunity.

It’s always best to grow and scale in your backyard before going national. Any mistakes or issues are easier to fix when you can catch it before they blow up. For example avoiding any out-of-stocks or product performance issues. Like learning how to ride a bike, this is where you leave the training wheels on until you gain the confidence to venture into the street.

This is where you learn more about the customer who buys your brand, how they use it, and what you need to do to help the retailer satisfy their needs and wants. It’s these key learnings that can help you grow and scale profitably so don’t skip this step.

On podcast episode 132, SECRETS 132 Choosing The Wrong “Expert” Jeopardizes Your Brand With Jeff From Bubba's Fine Foods we talk about exactly this. You will want to listen to this episode.

Jeff talks about how he hired a master broker to help them drive sales. The master broker did exactly what he promised - a good thing, right? The problem is that Jeff got new distribution in stores that he could not properly support. Some of the stores did not cater to his ideal customer. It was expensive and it almost bankrupted him.

Think about it, having to play slotting and all the promotional fees to get you products on a retailers shelf, the cost of servicing every store, and the cost of having your products delivered to those stores. Now multiply that times every new store. To complicate things some of the stores he gained new distribution in were far away sometimes clear across the country. As you can imagine, this placed a huge strain on his finances.

Jeff eventually had to fire his master broker and he began to focus on gaining profitable distribution in his own back yard - distribution he could properly support. Remember that you name is on your brand - it’s a reflection of you and your commitment to your loyal shoppers. You never get a second change to disappoint a customer or a retailer.

Listen to podcast episode 132 to hear all the details. I also help solve one of Jeff’s most challenging bottlenecks on that show - perhaps your most pressing bottleneck.

The problem was that the master broker did not take into consideration the brands capacity to support the growth. This could have easily been remedied if the master broker aligned their sales objects with the brand. I see this a lot. Don’t fall into this trap!

Next, another distribution mistake that plagues brands and how to ensure it doesn’t happen to you.

Most retailers like to test a product in a few of their stores before they give you widespread distribution across their entire chain. Makes good sense, right? The problem is that they don’t understand who your ideal customers is as well as you should.

This is exactly why I created my free Turnkey Sales Story Strategies course. Every brand says that they know who their shopper is BUT I’ll be that there are things you don’t know about them. For example I worked with an oatmeal brand that learned that new moms loved feeding their brand to infants - something the brand never considered. They positioned there brand as a healthy hot cereal. I see all brands struggle with this - literally all brands. If you have the discipline to adopt the strategies taught in that course you will gain a significant competitive advantage.

My point is that you need to help guide your retail partners to be successful when it comes to where they try to sell your brand. They need your help and guidance and savvy retailer might even reward you for it with incremental promotional and merchandising opportunities. Sometimes it’s as easy as seeing what kind of cars are in the stores parking lot and what kind of shoppers are in their stores. What kind of clientele does each store cater to?

Here’s why this matters. Several years ago I was talking with a brand that had a $12 jar of organic peanut butter. It was amazing! They had gained distribution in a retail chain of 160 store chain. The problem is that they tested the product in stores that did not align with their ideal shopper.

The brand performed well in affluent neighborhoods but it failed miserably in less affluent neighborhoods. As a result, the test implied that the brand might not be a good fit for the chain and it was discontinued.

The better strategy would have been for the brand to help guide the retailer to test their products in the stores where their ideal customer shopped. This would ensured that the brand maximized each and every selling opportunity. The retailer would then have been happy to off their the brand to their customers after the test.

The moral of the story is that you need to take complete responsibility of every aspect of your selling strategy. It’s up to you to align your distribution with the stores that cater to your ideal customer. The win’s from this strategy will compound over time and your sales will grow sustainably.

Getting back to your go-to-market strategy. This is why I am a firm believer that your business plan needs to proactively address this. In a perfect world, you should be able to hand your business plan to someone else to execute it on your behalf and in your absence! If that is not the case, then you need to work on it. This will help you grow and scale faster and more sustainably than other brand. This will also help you avoid the potential landmines discussed on this podcast.

Lastly, you want to ensure that you have the capacity to support the increased distribution - another fatal mistake I see brands make.

You’ve probably heard the term getting out in front of your skis, this is a good metaphor for this fatal mistake.

You're so eager to grow and scale your brand that you overlook your ability to support the new distribution - that your capacity can handle the demand. Sometimes its a matter of your co-packer not being able to produce what you need when you need it.

This is where you need to know your numbers. Never assume anything - another huge mistake. Never blindly trust anyone including the retailer to make it easy for customers to find and buy your products.

Most brands simply allow the retailer to place orders to support their sales but again, they don’t know your customer as well as you do. You need to help guide them to drive sales with your brand.

Brands frequently think their sales volume is good without realizing that their product may be out-of-stock on a regular basis - especially when the brand is promoted. Canned topline or templated reports will not highlight this issue. It requires a deeper dive into the data - where a talented category management expert is worth their weight in gold.

Every out-of-stock is a missed opportunity that embarrasses the retailer and disappoints your customers.

The simple way to fix this is to know exactly what your weekly average turns with out-of-stocks are in each store. Remember that no two stores are alike. Then give the retailer a recommended order quality and frequency. Be able to do this when your brand in not on sale and when it is promoted. How much incremental product does each store need to support the promotion and when does the product need to be delivered to avoid out-of-stocks? When you see a store place a small order, follow up with them and help them order enough product to service their customers - your customers.

This is why you need to know your numbers and this is how you stand out as a leader in your category. A category leader is any brand willing and able to help their retail partner drive sustainable sales by leveraging the strength of their brand.

Simple strategies like this will differentiate your brand from others. This will help you become a trusted and valued partner to your retailers. Savvy retailers may even reward you with incremental promotional and merchandising opportunities not available to you competition. This is exactly the strategy I used to push around some of the biggest most iconic brands. It worked for me and it can work for you. At the very least, it will give you a roadmap to sustainable and profitable growth.

Thank you for listening. Today’s free downloadable guide is my “Strategic Solutions to Grow Your Brand’. It’s been a while since I offered this free guide. It is one of the most popular resources I’ve ever share. It will give you a good overview of the key things needed to help you develop a robust go-to-market strategy as we discussed today.

You can download it on the podcast webpage in todays show notes. You can get their by going to brandsecretsandstrategies.com/session162.

Thanks you for listening and I look forward to seeing you in the next episode.

Thanks again for joining us today. Make sure to stop over at brandsecretsandstrategies.com for the show notes along with more great brand building articles and resources. Check out my free course Turnkey Sales Story Strategies, your roadmap to success. You can find that on my website or at TurnkeySalesStoryStrategies.com/growsales. Please subscribe to the podcast, leave a review, and recommend it to your friends and colleagues.

Sign up today on my website so you don’t miss out on actionable insights and strategic solutions to grow your brand and save you valuable time and money.

I appreciate all the positive feedback. Keep your suggestions coming.

Until next time, this is Dan Lohman with Brand Secrets and Strategies where the focus is on empowering brands and raising the bar.

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Strategic Solutions To Grow Your Brand

This short guide levels the playing field between small brands and their more sophisticated competitors. It highlights the advanced strategies the big brands use called Category Management – what retailers REALLY want. 

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