In this article Joe McVoy talks about how to get your product into stores like Walmart, Target and other top retailers and make substantial amount of profits from it. Joe has sold over $45 million of his inventions to major retailers including Walmart, Target and others. Find below Joe’s story in his own words.
As an entrepreneur who has developed and sold over $45 Million of my inventions to major retailers including Walmart, Target and others, hereʼs a story about what happens in the real world.
How to Sell Your Products To Walmart? I talk to inventors all the time who have a product idea or concept they want to sell to Walmart. The first thing you need to understand as an inventor is that Walmart or any other large retailer doesnʼt buy or finance ideas. They buy products.
In fact, they expect you to be able to ship their order in 7 – 10 days or less. That means you do NOT have 90 days to get the order made in China after receiving it.
So, you ask, how do you get the money to inventory large amounts of your unproven product?
Congratulations, now you understand the question!
The answer is in most cases, you donʼt. Unless you have major money backing you, this means that a major retailer is the last place you go with a new product, not the first.
They also have this annoying requirement that they expect you to know their customers better than they do and they expect you to have proof that their customers will buy your product before they will buy it from you. So, if you infer from this that major retailers donʼt like to take risks or buy unproven products without a track record, you would be right!
To understand this, all you need do is think about it from their point of view.
The buyers who make decisions about what products to buy are paid based on how well they increase the profits on the shelf space they are responsible for.
So, if you were a buyer which would you prefer to buy – a product selling like crazy in other stores or on TV – or a new, unproven product that could keep you from getting your bonus if it doesn’t sell?
Easy choice, right?
Hereʼs how I handled this.
Back in the 1980s I was selling kids stickers, labels and school supplies made from holographic and metallic materials no one else offered. After I had 10,000 card and gift stores selling my products and having them be the best selling products in their stores I went to Target (Target is more willing to test a new product than Walmart). They bought my product line and later, I actually got an award from them as “best new vendor” in my product category, so we approached Walmart the next year.
Walmart told us we would get a purchase order and a “warehouse slot” for year round stocking of our product line. They also told us they expected shipment within one week of receiving their order.
Since we were scheduled for national distribution to all their warehouses, their opening order would be $800,000. It would cost me around $400,000 to make the product. I couldnʼt get it made in a few days, so had to make it, put it in inventory and wait for the PO and authorization to ship.
We waited . . .
We waited some more . . .
60 days later our suppliers wanted paid . . .
90 days later our suppliers were getting rude about getting paid . . .
120 days later they were filing lawsuits to get paid. Still no PO from Walmart.
Now I realized I needed financing to stay in business. Yes, I should have known this upfront, but I wasn’t that smart . . .
Just so you know, a Purchase Order from a major retailer is not financeable because it can be cancelled at any time with no penalty to the retailer right up to the date of shipment. (Once shipped, that PO becomes an account receivable. An account receivable from a major retailer is like gold and is easy to finance.)
So, not only did I not have an un-financeable purchase order, but I had an even more un-financeable verbal “promise” of a PO.
So, as an entrepreneur,
I went into Panic mode . . .
looking for funding . . . looking some more . . . and some more . . .
It got ugly.
Finally I realized my only hope was people I already knew and the people they knew – I needed help beyond pure business logic because no business person could rationally fund such my deal.
Finally we found a friend of a friend who was high up in a bank who gave us our funding. But, being very un-bank like, they also took controlling equity in our company – this was reasonable in hindsight because we were bankrupt without them.
Long story short, we did get the order from Walmart, our product sold through quickly and all was good – except I no longer owned control of my own company . . .
They put in their own person as CEO and I ended up getting fired by my own
company . . .
Lucky for me, I had another company I founded that was doing well and I just moved over to it. But, that was, as I say, lucky, not because of any skill or pre-planning on my part.
So, bottom line, be careful selling to major retailers. Even if you “get the order”, you can be in trouble. My recommendation – before you try to sell any product to any retailer, make sure to listen to my free 60 minute CD about how to do it right.
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Download my free CD at http://www.WalmartSecrets.com or contact me directly at
joemcvoy@gmail.com or by mail to 1100 Nautilus Court, Lafayette, CO 80026 Phone:
720-890-8760. Also, check out my blog at joemcvoy.com
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