Many producers, especially of consumer goods, get excited when their brand is for sale in some far away city across the country. They act like it’s some kind of an achievement to have placed their product there. They may even brag about all the places their product is “sold.”
The fact is, their brand may have been placed in those retail stores, but reorders require constant vigilance. We considered our brand as “in” a retail store only after it was reordered within 30 days of the initial placement, and then reordered again within the next 30 days. Even then, there was no guarantee our product would stay in that store.
Our brand was sold through the three-tiered system. This is industry slang for the producer selling to the wholesaler (also know as the distributor or jobber), and then the wholesaler selling to the retailer who sold to the consumer. We found that without our own representative servicing that store, our product would disappear, often shortly after its initial placement.
Why? For a myriad of reasons that have nothing to do with the product, the price, the quality, or the branding. Most reasons were fixable, but only if our rep physically went into those stores. The many unbelievable-sounding reasons were painfully real. Here are the 10 top reasons we discovered for no reorders:
1. The wrong product was delivered by the wholesaler and was never returned or put on the shelf.
2. Price tags were wrong or missing altogether.
3. Too much of a similar product was sold to the retailer by the wholesaler’s representative. Now the retailer won’t buy anything from that rep until the over-stock sells out.
4. New brands are not yet well known, resulting in the wholesaler’s rep and the retailer forgetting to reorder it.
5. Fast movers sell out so quickly that the shelf space is left open, soon to be taken by a competing brand.
6. A new owner wants to start fresh with different brands.
7. A new distributor’s representative didn’t know to reorder our brand.
8. A stack of someone else’s product completely covered ours from view.
9. It’s still in the back room, and never made it to the shelf. In the wine industry, we called this “aging in the back room.”
10. No promotional signs were put up to help it sell.
The list goes on. None of these reasons has to do with the brand itself, but all affect brand-building results. In fact, they can stop the brand dead in its tracks.
When you are starting out, your investment in brand building can be lost to simple out-of-stocks. Every new placement requires a follow-up on a timely basis. Your rep must see if its still there, and do what needs to be done to get reorders.
Before you start telling your customers where they can buy your brand, make sure it’s still there. Be sure to have room in your brand-building budget for your own field representatives. It can be the most essential part of brand building. It’s not the initial order that counts, it’s the reorder!
Who Are We.
Having built and sold a bestselling national brand, we appreciate the value of brands and everything it takes to make them successful. Companies are valued by their brand equity. Achieving and maximizing brand equity requires tremendous respect for all your customers, from your wholesaler to your end user.
Starting in our laundry room with no money and no knowledge of the industry, we built the famous Barefoot Wine brand. We learned a lot they don’t teach in school and much of it the hard way. Although our success was in consumer products, our real world experience will be helpful to anyone looking for information and advice about brands.
We have written the New York Times Bestselling Business Book, The Barefoot Spirit: How Hardship, Hustle and Heart Built America’s #1 Wine Brand, which chronicles the history of the famous brand from its inception through its acquisition. Our book is now required reading in schools of entrepreneurship across the country. We hope this book will provide inspiration and encouragement for all those contemplating starting a brand or wanting to improve their existing brand.
Michael Houlihan and Bonnie Harvey
-Barefoot Wine Founders