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Retail Strategy

10/07/14

Handbags in Retail

Often in a company’s bio you’ll hear them tout which retailers carry their products.  In every press interview I’ve had the reporter wants to know who carries Alesya Bags.  And people get super excited when they hear about their favorite line being carried by a big chain.

But retail isn’t all fame and glory.  Large stores wield a lot of power.  Did you know large merchants:

  • Can return merchandise to you if it doesn’t sell as expected?
  • Require that you contribute dollars to the advertisements the retailer runs?
  • Lower your wholesale price so the retailer may put an item on sale?
  • Pay for merchandise at their own discretion – often many, many months after you’ve sent them your products?

I know what you are thinking.  “Daaaammmn” because I’m thinking the same thing.  Not exactly movie stars and swimming pools.

On the  Season 6 Premier of my beloved Shark Tank a company called Sleeping Baby came on the show with their product the Zipadee-Zip that helps babies stay asleep.   After they told the sharks they had a million dollars in sales Daymond John asked how they made those sales.   “All through our website,” the founders replied.    “100%?” Daymond asked again.    “Yes, 100%.” they confirmed.

Sleepy Baby on Shark Tank

When asked if they wanted to go the retail the couple from Sleeping Baby said they didn’t know yet.  Daymond replied, “You need to have that answer clear, because I’m the guy who wants to take it to retail.  But that doesn’t mean that’s the right answer.  (…) You’re going to bring in a million dollars with no hassle of retailers sending it back?  You might not want to go to retail.  These guys want to squeeze you when you go to retail.”

Shortly thereafter Kevin O’Leary compared Sleeping Baby to a company that his family came to North America with, “They were in existence when we could make this stuff in America at a cost that was competitive and when it transitioned to Asia they got killed.  Retails is a very difficult beast to manage.  I think this connection you’ve created with your customer base is unique and it’s from the heart.  It’s hard to listen to your story without getting emotional it’s so powerful.  I’d do your deal – $200,000 for 20%.  I do not want to see you die in retail.”

Daymond John on Shark Tank

Daymond goes on to match Kevin’s offer but says they are going to “test” retail and if it doesn’t work they are going to stay right where they are.  The Sleeping Baby couple ends up taking Daymond’s deal.

For our purposes, the most important thing here is that in Season 1 of Shark Tank this conversation would NEVER have happened.  It was all about distribution and big names and large orders.  Now the tune has changed.

While I love being in small stores (you can find Alesya Bags at Campo Marzio in Charleston for instance – and they’ve been fabulous) my retail strategy is now very different from when I started the company.  I believe there is a huge opportunity to sell directly online and do 7, 8 or 9 figures worth of business.

After hearing this new strategy and feeling bullish about our collection, my manufacturing team asked me “What are we going to do when Neiman Marcus comes calling?”  Make no mistake, that will be a good day.  “We’ll pick up,” I replied, “But we won’t go running.”

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2 Responses to “Retail Strategy”

  1. Angee says:

    You continue to inspire me! I love what you’re doing. I can’t wait to see more.

  2. Londongal says:

    I still recall your post where you were instragraming to one of the big retailers and now this article. I am very inspired by this cos I thought I was crazy for not wanting to get my goods into the big stores when everyone else around me is all they talk about. Now I know you can still be successful without Retail, i.e it can be done!

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