I've done this to some degree before. In late 2000, my brother started a blank CD-ROM distribution company, and I was helping out - part of that was approaching small stores to stock the blank CD-ROMs.
It wasn't hard to do - if they feel they could make a profit without too much risk, then of course stores are usually happy to stock your stuff. The "gimmick" of the blank CD-ROMs we were distributing was that they came in many different colors.... My brother knew the people who set up the company to import these.
Anyhow, to make a long story short, the business wasn't a success. The colored CD-ROMs turned out to not be of the best quality for "burning" and seemed to have a lot of errors, even though they looked pretty snazzy. (We didn't have a CD-burner at the time to test them ourselves, and we mistakenly took the word of the importers about their quality.) The other CDs we were distributing were good, but there was really nothing to distinguish those CD-ROMs. Also, distributing CD-ROMs has pretty small margins - the margins are as small as 5% to 10%.
However, I did get some experience in approaching stores to stock a new product. We only approached small stores, though, since another distributor already had the rights to distribute to the large chain stores.
Having said that, does anyone have tips on getting your product in the stores? Our approach was to simply go to these small stores, and talk to the guy at the counter. In most cases, he was also the store owner, and we'd demonstrate the product, give a spiel about it's benefits, and let him stock it on a trial basis (he only paid for what he sold).
Has anyone done this? I'm also especially interested in any experience in approaching chain stores too....
If you have the ability to get products in the stores, there are a lot of little "product developers" around who you might be able to work with, to distribute their products. I think this could be a very lucrative business to get into.
- Dien Rice
Distribution is also another example of using Leverage....