Product Startup Podcast Episode 094: Get a New Product Into Big Retail

00:00:00 Kevin Mako: Hello, product innovators. Today we learn how product startups get into major retail stores from an expert that's worked with over 4,000 small hardware brands.

00:00:12 Narrator: You're listening to the Product Startup Podcast, the show that helps bring your product idea to life by chatting with successful inventors, product developers,

00:00:23 Narrator: and hardware industry professionals. Our goal here is to get to the bottom of what makes a product successful, from initial idea to getting your product on store's share.

00:00:32 Narrator: We're taking you step by step to build a functional product and scale your product business. Hosted by Kevin Mako, one of North America's leading experts on hardware development for small product businesses.

00:00:46 Yohan Jacob: Now, on to the show.

00:00:49 Yohan Jacob: Welcome back, everyone.

00:00:50 Kevin Mako: Today I'm very excited to introduce Yohan Jacob to the show. Yohan is the founder and president of RetailBound, an agency which helps emerging hardware brands get into major retail stores and sales channels.

00:01:00 Kevin Mako: RetailBound has been around for 14 years and has worked with over 4,000 product companies. Yohan himself has spent 30 years in the industry, including being a major buyer for Sears and Office Max.

00:01:11 Kevin Mako: Today, Yohan is going to share some valuable knowledge in how inventors, startups, and small manufacturers can get into the big retailers, including the three major tips on what retailers are looking for these days, and furthermore, how to succeed and scale once you're on the shelves with your invention.

00:01:26 Kevin Mako: Now on to the episode.

00:01:31 Kevin Mako: Yohan, welcome to the show. Good to be here. Excited to have you on. I know we're going to be seeing each other October 5th, I believe, coming up. We're both keynoting at the crowdfunded summit. Looking forward to it. Looking forward to everything that you're going to talk about, about getting into retail,

00:01:44 Kevin Mako: which is something that we get, I guess, a bit of a prequel today. And we're talking about how to get into the big retailers

00:01:50 Yohan Jacob: and what better person I have on the show than you to talk about this. First and foremost, let's give us a bit of the history of yourself and RetailBound. Sure, sure. So I've been in the retail industry for about 30.

00:02:00 Yohan Jacob: years. Starting when I was two years old, I don't know the gray hair foyer, you started selling products as a manufacturer to retailers in our United States. Probably made more of my fair share

00:02:11 Yohan Jacob: mistakes because I didn't have a RetailBound kind of guiding me along the way. Did bear it well, but it took me some time. Then they became a large retail version for two different bill and dollar retailers. Saw the good, the bad, and ugly. It comes to how vendors work

00:02:25 Yohan Jacob: with retailers like myself. And then I started a company about 30, 14 years ago, helping young brands want to scale their products into retail the right way. That's amazing. And now you're all over the place.

00:02:38 Yohan Jacob: Oh, we have offices to see in the U.S., as well as in London. We have about 20 folks on both

00:02:43 Kevin Mako: sides of the pond, and we felt nearly $4,000 on the road get retail ready and place in retail in some former fashion. Wow, 4,000 brands. That's incredible. So let's jump into

00:02:55 Kevin Mako: the topic today so that startups that are either in the idea phase or maybe they've done their first successful crowdfunding campaign or maybe they're even starting to scale when we start to think about getting into the big retailers, which to be honest, I've worked with over a thousand

00:03:09 Kevin Mako: startups myself, more on the product development side. But one of the big things that always comes across is how do I get my product into Walmart or into Best Buy? And it's this dream that I think

00:03:20 Kevin Mako: most inventors, especially in the physical product space, have of eventually walking down the shelves, seeing it's sitting there. And as they're walking there with their family or taking their kids and boom, there's their product sitting on a shelf.

00:03:31 Kevin Mako: So first things first,

00:03:34 Yohan Jacob: I think it's core to understand the difference between retailers and marketplaces. Sure. Can you just get a bit of a description of that? So they're really honed down on what it means to be getting into a big retailer and who they are. Correct. So I'll see, you know,

00:03:48 Yohan Jacob: retail, how they make money is a buy sell of a landscape, right? Where a marketplace, you're paying a retail like an Amazon or a Walmart or a new egg, a monthly fee plus a commission, right?

00:04:00 Yohan Jacob: So with a marketplace, you know, the access to a lot of marketing assets that a retailer would be able to offer you as a brand. A lot of times with larger

00:04:11 Yohan Jacob: retailers, while they're probably a little risk involved versus the marketplace, there's a lot more opportunity in building your brand. I think for a lot of young brands we work with,

00:04:21 Yohan Jacob: We gave me to a Best Buy or a KVC or even a Target that it actually legitimizes a brand

00:04:32 Yohan Jacob: and drives traffic to an Amazon marketplace, by the way, because, hey, I saw a Best Buy online or in store.

00:04:40 Kevin Mako: Let me go check Amazon and see the prices. I'm a prime member. So we see a lot of clients, their sales grow on a marketplace, like Amazon, when they're actually in an institutional retailer, like a Best Buy, or.

00:04:51 Kevin Mako: or a kvc by the way it's interesting too that i mean that's a really good point you brought up about the cross pollination of uh online to retail as well because for sure one of the common characteristics

00:05:03 Kevin Mako: of somebody today as well is while they're in a retail store they'll look up the review on amazon or while they're in amazon they'll say well i wonder if i can go touch and feel it and see it in my

00:05:13 Kevin Mako: neighborhood best buy or whatnot so it's it really creates a lot of brand value let alone the fact that You can use that as a feather in your cap to say, we are now selling in Best Buy, meaning that, and I really think it's important, that differentiation you made between marketplace

00:05:28 Kevin Mako: and the retailers. The retailers basically have ultimate control. So one of the nice things is if you are in one of these big retailers, at least in a minimum,

00:05:36 Yohan Jacob: what the market knows is that that retailer trusts by your product. They think that you have a certain caliber, a certain minimum threshold. They think it's a valuable enough product for society, for their buyers, whatever else, that they were willing to put it on the shelves. Correct.

00:05:49 Yohan Jacob: And the marketplace can go back, can also be an advantage for you when talking to retail because, you know, so many times, especially with Best Buy in Minneapolis, question my house and, hey, I see your clients on Amazon, yep. Are they on vendor central or seller central?

00:06:03 Yohan Jacob: If I say vendor central, probably a very short conversation between me and the merchants because they don't want to compete against Amazon who can, you know, lower the price, right, self-inventory. They prefer, if you're going to be on Amazon, okay, if you're a small brand,

00:06:18 Yohan Jacob: Beyond seller central where you as a small brand can control the inventory, can control the price point,

00:06:24 Kevin Mako: hopefully limit the amount of third-party sellers to get access to your buy box by using being a brand registered on Amazon.

00:06:32 Kevin Mako: But if you weren't working with a retail like a Best Buy or a Walmart, it's important that you control your marketplace, right?

00:06:40 Yohan Jacob: If not, you have a very short life in retail at a Best Buy or a Walmart. that's a smart tip and on that line what is it you know you mentioned certain things that

00:06:53 Yohan Jacob: they're looking for or not looking for but what are some of the key things that retailers are looking for in a new prospective product sure sure so most large retail bars like myself right

00:07:05 Yohan Jacob: they're very risk averse right because they want they want to have a they want to keep their job right yeah as a baseball bat if I'm below 500 percent I probably will last next see

00:07:16 Yohan Jacob: season, right? So it's important for bars to find the right products. And are they right 100%? No, they're not, right? There's a little, unfortunately, a little more of a gut decision. But something they look at,

00:07:29 Yohan Jacob: first they look at, they have free KPIs. One is where your product kit, top line sales, right? So if you're in a hot category,

00:07:37 Yohan Jacob: maybe it's STEM toys, maybe it's smart home, right? Using the hardware, right? Sure, it's a growing category. Let's look into it. But look at profitability. To the day,

00:07:47 Yohan Jacob: that's how I keep the doors open. That's how they pay the employees, how they keep the lights on. So, boil your pocket certain margin threshold. And by each different category,

00:07:56 Yohan Jacob: where it's a, you know, where it's a smart assistant, where it's a TV, where it's a TV mount, right? Each has a different margin thresholds that you need to make if you want to be in a retail.

00:08:07 Yohan Jacob: The third KPI cabinet they look at, besides top line sales and bombing profits, is inventory terms. turns, where your product turn X number times, right?

00:08:19 Yohan Jacob: It returns one time a year, and it's a iPhone case, you're not going to last very long, right, versus a, you know, a $3,000 TV. So those are the three KPIs, that's one thing they look at.

00:08:31 Yohan Jacob: The thing I look at is your past sales history. So if you're on Amazon or Walmart marketplace or in your e-tailor, they will look at your past sales history, you know, it's like a baseball card. You should know those stats, like the back of your hand.

00:08:46 Yohan Jacob: So what are your sales month and day, you know, a year a day, right?

00:08:50 Yohan Jacob: What are your returns? You know,

00:08:53 Yohan Jacob: are they truly defective or are they really barge-remorse? If it's either or what are you doing as a vendor or a brand to lower that return rate? Because buyers, they want to sell product and keep it sold.

00:09:08 Yohan Jacob: They probably keep coming back to the retailer because it's defective or not happy. It's additional work that the bar does not want to have, right? So it's important that you know those stats, your returns, as well as your sales.

00:09:22 Yohan Jacob: And finally, they're going to look at your reviews as well on Amazon and as well as Walmart. If you're a 2.3 star in Amazon or Walmart, very tough, right, to convince the buyer to give real estate space or even online space.

00:09:37 Yohan Jacob: I mean, Best Buy.com, it's a very robust assortment. it's a creative assortment. That means the buyer for dot-com or in-stores selected your pod for online. On Amazon or a Walmart marketplace,

00:09:50 Yohan Jacob: anyone could be on that site, right? So with Best Buy and our retailers, it's a very creative assortment, right? But the third thing, besides the KPIs and past Susset Street,

00:10:03 Kevin Mako: the third thing that buyers look at is what are you going to do to build awareness? What's your marketing plan? If you're going to say I'm going to put on Best Buy.com, My job is done,

00:10:14 Kevin Mako: again,

00:10:15 Kevin Mako: not going to last very long. So the third thing of bars look at, Kevin, is what is your marketing plan? Your marketing strategy to build awareness and try traffic to a best buy.com, a target.com, a pbc.com.

00:10:28 Kevin Mako: Because again, rather than to maybe put you to give you big opportunities where it's on air or in store, you need to show some progress on their dot com platform.

00:10:39 Kevin Mako: That's your, wow, those are three powerful things. I appreciate that you broke down each of those as well, right? You're looking at just kind of as a summary, one, basically your numbers, revenue, two, what have you sold already? And I think this is a really important one as well for startups.

00:10:54 Kevin Mako: It's why having just a few sales out there, it's not about selling to the world because obviously you're scaling an emerging brand. But when you do start selling, even if it's 500 or 1,000 units, make sure that you're tracking that.

00:11:05 Kevin Mako: That is your best card on the table, whether it's for an investor to raise money or whether it's for a potential buyer, distribution partner, whatever it might be, your numbers there are gold because what they're looking at is, understandably, their market is far, or Billy did access

00:11:19 Kevin Mako: the market is far bigger than yours is. So it's not that you're selling big numbers. It's the fact that of the numbers that you're selling, how well are you doing? And how does that compare it to others in that category? And I think the other thing that's really important for startups, especially to

00:11:33 Kevin Mako: think about, and you kind of mentioned that in terms of reviews, which also leads to your third point of awareness.

00:11:39 Kevin Mako: But the second thing is really understanding the value of your product and how the market perceives it. Those reviews are gold. So if you've got 50 units out there that have

00:11:49 Kevin Mako: reviews on them and most of those reviews are great, then you're in a really good position. And likewise, you know, in a bad position if they're not, which leads to the fact that as a startup, you've really got to make sure that your quality is number one. And that's something

00:12:03 Kevin Mako: we really drive into our product development clients as well. When we're designing these products from sketch to production is that it's not about the number of features that you have. That's not going to give you bad reviews of the features which you do have, the pain point

00:12:15 Kevin Mako: which you're solving, make sure you're solving that well. Do that world class, that one thing.

00:12:20 Yohan Jacob: Then down the road, you can worry about scaling or growing the product or making your pro version or whatever else. But remember, those reviews, those first few sales, that's what the big buyers or the big investors are looking at. And that's exactly what Yohan's talking about here.

00:12:34 Yohan Jacob: 100% my friend.

00:12:36 Yohan Jacob: That's great. Well, when we talk about, about selling and success in selling. One of the things that you mentioned is it's not just about

00:12:45 Yohan Jacob: getting into those retailers. I mean, for somebody like you, it's easy. You can get really any product in. But the big thing is, how does that sell through and how does it scale? And I think that's something that you focus on right from the early phases of getting somebody into the

00:12:59 Yohan Jacob: retailers. I want you to talk a bit about that so that people not, don't just think about getting into the stores, but think about how to crush it once you're actually into those stores. Yeah, that's really that third point at marketing. I think it's a lot of young grants fall.

00:13:10 Yohan Jacob: I think they're so excited about, hey, getting a product placed in retail where it's online or in-store, in print, or on-air, or the four vehicles of retail.

00:13:20 Yohan Jacob: And then they're going to know off doing some else. And they get an angry phone call or angry e-mails and say, hey, Kevin, it's been three months. And the three-thousand pieces we bought in our warehouse is still sent a warehouse.

00:13:32 Kevin Mako: We haven't seen any sales. Now, retail like Best Buy, you know, they've told my client. We will provide you a platform, right? It's up to you succeed. Best buy the large merchant. If you're Sony or Samsung, there's been a lot of time with the merchant.

00:13:46 Kevin Mako: If you're a one-skew brand of London or Hong Kong, you're not going to get a lot of FaceTime. It's up to you to be self-motivated and fair or the right levers, but internal on your own team.

00:13:58 Kevin Mako: Well, external, because best buy and other retail typically have various market market. It could be pay-per-click, email blast, paper views.

00:14:06 Kevin Mako: hundred things to drive traffic both online in store. So I tell a lot of brands, you got to think about the post sales support, the post sales marketing. You get the product on Best Buy or another retail. That's great.

00:14:20 Kevin Mako: That your job has just begun. Now the hard part begins. And it's an incredible platform to scale. And that's why it works. And that's why so many, especially many of your clients have been able to create even multi-hundred million dollar brands. It's because they understand

00:14:34 Yohan Jacob: they've got this brand value by being the Best Buy or the Walmart in store or even the Walmart online. Like you said, even though it's just a marketplace, there is still brand recognition there. So you've got the world at your fingertips. Hopefully you've created a great product. You've got even just a few great reviews.

00:14:49 Yohan Jacob: Now you've got that opportunity where you're in the retailer. You finally got that decision. Leverage that. Use that. That should be a big part of your marketing program is to drive sales into there, not just to appease your retail partner.

00:15:03 Yohan Jacob: let's use Best Buy an example, not just to get people into Best Buy to buy your product, but also to enhance the overall brand value of your product and start building your community, your tribe, those people who actually love your product and love how it's helping their lives. Correct.

00:15:17 Yohan Jacob: Again, 100% true, my friend. So how does RetailBound fit into all this? How do you help work with these emerging brands to facilitate these processes, to learn about these three things and to make sure to do it right?

00:15:29 Yohan Jacob: Sure. So I always saw our young brands, you know, the 60, see secret success of retail is making the retail buyer's job easier. And we think we're a big part of that.

00:15:40 Yohan Jacob: You know, so, you know, again, since our entire team is made of a former large retail buyers, we kind of vet out the good from the bad, right? And we have various criteria from, is it probably unique, is it different, right? Is there a margin behind it?

00:15:55 Yohan Jacob: Are they capitalized, right? And by the third criteria is will they follow through on request made by bar. Bars aren't asked you get Kevin, any of a sample that are bored. They need a sample because they get their job done, right? I can't tell you how many times as a merchant.

00:16:09 Yohan Jacob: I've asked young brands, hey, I need a sample. I need pricing. I need a sell sheet. And it's like days, weeks, whatever. I'm like, in that case, I'm firing Kevin and I'm going to hire Susie to take his place. So it's important to be followed through.

00:16:23 Yohan Jacob: So I'd read tip on what we do. As we know a lot of young startups, you've got a lot of things they're doing, right, from, you know,

00:16:30 Yohan Jacob: fundraising, product development. and we're just running the company, right? So our job is to take that work, some of the retail work off the plate, at least on the end term. Most of our clients stay was a year, two, three years. What we do is basically, Kevin, we help a young brand to get retail ready.

00:16:45 Yohan Jacob: So the other strategies, from pricing to logistics, to marketing. Then once that's done, and we feel their retail ready, because in retail, like a job review, we don't get a second chance of making a first impression.

00:16:59 Yohan Jacob: So then we have about two hundred sales agents.

00:17:01 Kevin Mako: about 40 distributors that help us our brands cover all to the retail in North America as well as in Europe. We start knocking on doors, literally and frequently.

00:17:11 Kevin Mako: Once product is placed in retail, our job is to do the marketing. Again, allow our young clients, the resources or the experience, right, to work with the retailer

00:17:22 Kevin Mako: on marketing and driving awareness, whereas in-store demo events, where it's doing a campaign online and drive travel to a retail.

00:17:31 Kevin Mako: website. The other things we do re-debound to help a drive repeat POs to help our client expand a shelf space. Also maybe their first gen online today. Next year, they get Gen 2

00:17:46 Kevin Mako: in store, right? And if I do, if I continue to my job correctly, our client will continue to be a long-term brand with that retailer. You see a lot of young brands today, Kevin,

00:17:58 Yohan Jacob: here a day and out tomorrow. Our job is keep out that. brand in retail as long as possible.

00:18:05 Yohan Jacob: That's amazing. And that stuff's super valuable because the whole concept of retail, it's not simple. And even just getting into retail is not just about getting into any retailer. They all have different nuances. They all have different strengths

00:18:18 Yohan Jacob: and weaknesses, pros and cons, as well as just the whole methodology and processes all behind it and making sure the strategy all matches for each unique product because every product's different. Every product has different methods that it will need for its own thing. So

00:18:32 Yohan Jacob: really appreciate what you've done over the last 13, 14 years building this thing up to really help people with that scaling step because that can truly create an empire out of a product,

00:18:41 Yohan Jacob: whereas it may just sit stagnant without it or you may be really limiting your potential by

00:18:47 Kevin Mako: not thinking about what are some of these options. And I know as well, Yohan, you deal with not

00:18:51 Yohan Jacob: just retail, but you're getting into Amazon sales and all sorts of other things as well,

00:18:56 Kevin Mako: really looking at the best avenue or avenues for somebody to scale their product after they've had a little bit of early success. That's correct. We have clients to help in both BC, like a bus buy or a KVC, but you also have clients

00:19:10 Kevin Mako: in B2B, like contract or hospitality. Our job is help our client expand mobile income street because in retail, it could take, you know, you know, two months to 12 months.

00:19:21 Yohan Jacob: It depends on certain variable I can't control, such as, say, the bars already made decision for 2021, see you next year, or the bar is over inventory like us. We all have checkbooks. So as a buyer, there's no unlimited, no money, money tree, right?

00:19:36 Yohan Jacob: Or they have some of the products already on the shelf, and they're very happy with the current assortment, right? So while we're trying to get a buyer to move forward to our client, we look at other other variables like B2B.

00:19:48 Yohan Jacob: We've seen a lot of our clients see success in the contract, hospitality, health care, other verticals while we're waiting for a retailer to come back to us.

00:19:58 Yohan Jacob: That's great. Where can people find out more about RetailBound? They go to Retailbound.com or show us an email at Info at Reitabound.com. And as always, I'll put all the links into the show notes. So if you're listening, check it out no matter what platform you're on.

00:20:13 Yohan Jacob: Yohan, really appreciate you being on the show to share some words of the wisdom about getting into the big retailer. So thanks again. We'll look forward to talk to you and see you at the crowdfunding summit coming up. Likewise. Thanks for having me, Kevin. Thank you. Take care.

00:20:26 Narrator: Thanks for tuning in to this episode of the Product Startup Podcast, the show. that teaches you what it really takes to bring your product to market and turn it into a big success.

00:20:37 Narrator: This podcast series is brought to you by Mako Design + Invent, the original and leading firm in North America to provide global caliber in-to-in physical consumer product development

00:20:48 Narrator: to startups, inventors, and small product business clients. If you're looking for product development help on your invention, head over to Mako-design.com. That's M-A-K-O-D-E-E-O-D-E-Eign. That's M-A-K-O-E-E-E-E-E-Ean

00:21:00 Narrator: for a free consultation from one of Mako Design's Ford Design Studios from coast to coast. Thanks for listening and see you next time.