Developing a Retail Product
From Production to Shelves - A Handy Cheat Sheet
Throughout this blog, we’re going to cover each step of taking a product to the retail space. Please revisit this blog whenever you are uncertain of the next step. We speak only about what we have real experience in, we hope this will make the information extremely practical.
Bottling our bbq sauce was something we always wanted to do. Truthfully the reason we hadn’t done it sooner was not for lack of effort. We had reached out to over 50 co-packing companies. The answer we were continuously given was that our order size was not going to be worth their time. We’ve now figured it out and hope to help anyone attempting to take a product from production to shelves.
There’s no reason to go through the long grueling process if you don’t have a product that people want to buy. It’s not enough to have friends and family tell you it’s a good idea. Get out there, let strangers try it. We had a bit of an advantage here. We’re a restaurant, we have new customers coming in every day giving their input on our BBQ sauce. We felt fairly comfortable that we had something worth selling and that there would be some demand for the product.
Since most people don’t have this advantage they often skip this step. Please don’t do this, this is possibly the most important factor separating success and failure. Craft a simple prototype, don’t spend much time on this, you’re just going for a Minimum Viable Product. This way outsiders can give their input. You can see what features people enjoy and which are frivolous.
There are other options that will serve a similar purpose, this is just the one that we’re familiar with. It’s a fairly simple platform to use. The setup for a project takes less than a day and the payoff can be huge.
Video - going over what motivated you to make this product, your background story, what you will use the money for.
Attractive Rewards - for people that back you. You can do several tiers for different levels of backing (ie a different rewards for $5 pledged than for $100).
Setting Your Goal - This is important, specifically for Kickstarter, if you set your goal to $10,000 and you reach $9,999 you don’t receive a single dollar. There’s really no reason to make your goal something you don’t think you can comfortably hit. There are no rules to how much you can go over. For example our goal was $4,500 and we raised over $16,000 (Humble Brag).
Promoting Your Campaign - This is crucial, you need to use whatever existing audiences you have and all social media tools to your advantage. Post about the campaign on Facebook and Twitter. Use your business page (if you don’t already have one you can make one in less than 10 minutes) to talk about the campaign. Boost your posts to audiences interested in topics similar to your product.
This portion of the blog is specific to food products
Once you have a product you’re confident with you need to have it tested in a lab. There are companies that offer these services as well as most universities. We’re lucky enough to be down the street from the largest university in Michigan.They tested the PH level, shelf stability, and nutritional breakdown. This is all mandatory before taking your product to retail stores. This step can seem daunting, but the company or university will really guide you and take the difficulty out of it. The most difficult portion was getting MSU a recipe to the gram, it needs to be uber specific.
This step took the longest. There are seemingly infinite companies out there offering these services. Not to mention the fact that you could produce the product in house and potentially save money. If you’re going to produce in-house make sure you’re bargain shopping. Buy used, compare many prices, and don’t be scared to barter. We chose, for now, to have the production done out-of-house. This way we save labor and are able to save money since we currently don’t have the necessary equipment.
If you’re going to hire a production company, this is cold calling, you truly just need to pick up the phone and start dialing. You should weigh options, get a sample from each company, and pick whichever company best suits your situation. Remember if you find a company but are unhappy in the future for any reason you can always find a new production facility or do it yourself.
The retail world is a game of pennys. Everything you can do to shave from your cost helps. There are several techniques to finding ways to save on cost. You’ll likely be working with several different companies to produce your product. Every company you work with should be viewed as an opportunity to save money. You can shop quotes from other companies and use the quotes to leverage better deals.
Another technique is to try to find cheaper materials, shop around the market and see if there are better options. It should be noted if organic or biodegradable resources play into your brand you won’t have as much wiggle room here.
Buying in bulk, this is one of the most popular ways to cut your margins, it’s also one of the riskiest. If you don’t know you’ll have continuous demand for your product and you order in bulk you could be left with a warehouse full of product nobody wants. You could also buy in bulk and have legislation change requiring you to make changes to your current product. This can be very costly and time consuming. With that being said there are absolutely benefits, you’ll probably save money per unit, you won’t have to worry about reordering, and you’ll save on shipping.
Once you figure out how you will produce your product you need to find a labeling company. This not only means finding someone to produce the labels but most likely, designing your labels. It’s important that your labels stay on brand. One great idea is to give a shout out to your local community, these are the people you have to thank for your opportunity to go on this journey. Give the labeling company some ideas and see what they come up with. Don’t spend too long on this. You may be enticed to order way more labels than you need to “save money”, I would recommend against this. Do a smaller order of labels, that way if you think of a way to improve the label down the road you won’t be sitting on tens of thousands of labels customers don’t love. They’ll need your nutrition label, which you should already have from the “Testing” step above, and a UPC which we’ll go over next.
This step goes hand in hand with the labels. You’ll need barcodes on the labels to sell them at the retail level. This again seems more difficult than it is. Go to www.gs1us.org, all in all it might be a 30-minute project and cost around $250. Send the information you receive from them over to your labeling company and they’ll put your barcode on your label.
At this point, you’ll have all the necessary steps complete. That’s it. We hope you use this document as a guideline in the future.