A Small Retailers Perspective

Sales Exclusives

When you retail through specialty retail channels, you may run into store owners who will ask you to give them an exclusive sales position on your product — typically for their local region.  They will claim that they have a unique store and that they need the exclusive to keep their store known as a "place where customers can find unusual things".

Some manufacturers further buy into this mind set by volunteering to give "exclusives" to stores as a selling feature of their product.  "If you buy my product, I promise I won't sell to anyone else in your area, so you'll get all of my sales, etc. etc.

Is it a good idea to play into this mentality and grant particular accounts exclusive sales arrangements?  I don't believe so for the following reasons:

1. Your product needs market exposure to succeed.  If what you're making is anything other than one-of-a-kind original artwork, it won't hurt your sales to be seen in more than one store in a geographic area — in fact, it's likely to help.
    
   If your product is limited to one store per city (or zip code), you will not be seen by some of your potential customer set who typically have a finite set of specialty retail stores they shop at — and that set may not include your "exclusive sales outlet".
    
2. Different retailers will market your product in different ways.  When you walk into a specialty retail store, you will see that each store has a different "story" to tell.  And your product is only one element in that story.  Depending upon how the retailer views it, they will merchandise it differently.
    
   Likewise, customers will view why they want to buy your product in different ways and each retailer's "story" will click differently with different customers.  If you rely on only one retailer in an area, you're relying on only one retailer's "story" to sell your product.
    
3. If your product line has any depth to it, you cannot count on one retailer carrying your complete line.  Different retailers will choose different items (or colors or themes) from your line, or different price points within it.
    
   If you rely on only one store in an area to show it, your customers will not see your entire line.  Some stores focus on products that are done in earth tones, others in primary colors — and each has its own customer set that prefer one over the other.  If you offer both, you need to be present in more than one store to meet both markets.  This is equally true of any other varying parameter of your product.
    
4. Since many of your retailers will not be located near you, you may be surprised when you grant someone an exclusive and have no way of checking how they are merchandising your product — or, for that matter, if they are merchandising it!  Often I would find a product at a trade show and send in an order — only to get a call or a letter from the manufacturer telling me that it was not available because another store in my area already carried it.
    
   To satisfy my curiosity, I would go to the other store to see it.  It was not at all unusual to find that the other store had only a minor, out-of-the-way display — if they were showing the product at all.  Additionally, even though the store was in my "area", I knew from experience that they drew a totally different customer set and had no overlap with my store.

Does this mean that you should retail to everyone and anyone that is willing to carry your product?  Definitely not.  You should have a clear idea of how and where you want your product marketed and who your customers are and actively seek out areas that will achieve your marketing goals.  It is totally reasonable for retailers to decide whether or not to carry your product based on what other types of businesses you market through.

A high-ended gift store will take exception to carrying your product, no matter how appropriate it is in an absolute sense, if you are also selling it through the local hardware chain.  Customers make unconscious associations and where one gift store may not mind being associated with another one of equal quality, it may not want to be associated with a mass-market store.

Another way to limit and more clearly define what stores to sell to can be based upon the retailer's commitment to carry enough of your product to ensure that it will sell effectively.  A scanty display of your product will typically not be enough to generate sales.

It is reasonable to set a relatively high starting order and then allow the retailer to re-order in small quantities to keep their initial stocking inventory full.  The initial order is their commitment to you that they will allocate enough shelf space to properly merchandise your product.  The small re-order requirement will allow them to freely replenish their display as well as be able to do special orders when a customer wants something they may be out of or don't ordinarily stock.

This is very important because if they wait too long to re-order because of your minimum order requirements, they may be out of those products that sell the best until the slower selling items sell out.  This hurts both you and the retailer in total sales accomplished.

Remember that the retailer is your partner in selling and you need to make it easy for them to present your product in its best light.  If they do and it's a good product, the fact that there are comparable stores in their area carrying it shouldn't matter.  Everyone will enjoy good sales!