Back in 2013, Walmart Inc. announced that it would commit $50 billion over 10 years towards purchasing domestic products. The retailer also stated that it would focus on U.S. manufacturing of goods such as clothes, furniture and appliances.
In June of this year, WalMart opened its Culinary & Innovation Center. With over half of WalMart’s sales revenues coming from its food and grocery items, the company is taking strides to include more local and private label products because such products have the most loyal customers.
What this means for aspiring product inventors and manufacturers and small entrepreneurs is that they can pitch their products to WalMart and/or Walmart.com and get a much more receptive audience than ever before.
For example, KettlePizza of Groveland, Mass signed a deal last year to sell their pizza oven conversion kits in 500 WalMart stores. Myndology, Inc., based in Appleton, Wisconsin, signed on to sell their ring-bound flashcards in 3,000 Walmart stores.
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Such product pitches are being actively solicited by WalMart via its U.S. Manufacturing Summit and Open Call. While this year’s summit is over, hopeful suppliers can also peruse WalMart’s supplier application form and make their product pitch there.
How can you better ensure that your own WalMart product pitch is successful?
Ask yourself some tough questions.
Before you present your product to WalMart, consider what questions its buyers will throw at you. Some points to consider include the following:
- Exactly how much money does it cost for you to manufacture your product? Could you (ideally) lower your manufacturing cost to one-fifth of the product’s retail cost?
- How low can you price your product and still make a profit?
- Are your raw materials suppliers reliable and/or can they be easily replaced?
- If accepted, can you start mass producing your product in 30 days?
- What’s your return policy? Product warranty/guarantee? Discount policy?
- Do you have product and business liability insurance?
- Does your product have a UPC code?
- Do you have a Taxpayer Identification Number (TIN)?
- Does your business have a Dunn & Bradstreet number?
Learn about your local WalMart.
Go into your local WalMart store and peruse its shelves to better understand if there is truly a need for your product. Also, if your product were stocked alongside competing products, what would be the advantage (price or otherwise) in stocking it? Keep in mind that your product must fit WalMart, not the other way around.
Once you’ve familiarized yourself with the store, get to know its local store manager. This is the person you’ll eventually pitch your product to, especially if it’s a local product. The local store manager will also be the person who presents your product to the Market Manager (MM) and Regional General Manager (RGM) for final approval and placement.
Create several different product versions.
Don’t just walk into your WalMart meeting with one product to present. Take your product apart and consider the different product sizes, colors, and configurations that customers might purchase. For example, deodorant could be sold as a single, double or even triple unit, with each configuration priced differently and including a bulk discount. Toys could be sold as-is or broken apart so that their different parts are offered as promotions.
Understand that the lower your item can be priced, the likelier it will be stocked and sold by WalMart. Currently, the store particularly likes products that break the $2 threshold (i.e., sell at $1.99 or less). This is why you should strive to create the smallest sellable item possible.
Also, your buyer may not like all your products during your sales pitch, or may only like certain configurations/colors/styles/sizes. You may be asked to redesign your product packaging/logo/label. Again, this is why you need several different products to present instead of only one.
Consider working with a manufacturer.
If WalMart likes your product, it will be immediately asking you how soon you can produce it, how you will ship it, and what your product turnaround time is. If you can’t answer these questions quickly, or you don’t have volume manufacturing capabilities, then you won’t have much of a deal.
To address this need, consider licensing your product to a manufacturer. One way to find a suitable manufacturer is by first joining trade organizations that deal with your product.
Keep in mind that WalMart requires manufacturers to comply with certain environmental and work conditions, and that requires inspectors. So, if you end up working with a manufacturer, you’ll need to add inspectors to your cost of production.
If you have stage fright, hire a broker.
A typical WalMart product pitch, with buyer questions included, lasts just 30 minutes. However, even those 30 minutes may be too much for those of us who don’t speak publicly on a daily or even yearly basis.
Don’t let your fear of public speaking and/or presenting stop you from pitching your product. Many inventors and entrepreneurs hire brokers (i.e., independent manufacturer’s representatives) to pitch their products. Should your broker land a deal, he or she will get 5-15% of the sale. The tradeoff, however, may be worthwhile because such brokers typically know of buyers in different regional industries, as well as what these buyers’ needs are.
Exposing your product through WalMart
Hitting “the big time” with WalMart is not as difficult as you think but it does take some preparation. However, the investment is worth it because getting Walmart to stock your product in even one or two of its stores can be a complete game changer for your entrepreneurial future.