With so much emphasis put on the logo, catch phrase, brand promise, brand story, and even matching corporate business cards, letterhead and envelopes, brand builders can forget the most important factor in any retail consumer brand’s success: staying in stock! Being out of stock is a killer of an otherwise fantastic brand.
It’s better for your brand’s reputation to never have been on a retail shelf than to be there and run out of stock. It’s only when you are finally given the chance to prove your product’s viability that you risk losing that reputation. Once your brand gets the stigma of being “hard to get” with end-user customers, retailers, or distributors, you’re done. The consumer will just quietly buy a competing brand, and the retailers will say that your product was undependable.
“But it’s not my fault!” you may say. “We have plenty of product! The retailer didn’t order enough! The store didn’t merchandise it properly! The distributor didn’t deliver the correct order! The price was wrong!” And on and on. But guess what? It is your fault!
As the producer, it is your responsibility to make sure your product never runs out of stock, even if that means doing somebody else’s job. Never let your brand get the reputation of being hard to get or undependable. Remember, it’s not “sold” when the wholesaler buys it; it’s now in danger of discontinuance, and for reasons that have little to do with the price, the quality, or the branding.
Here are 10 distribution challenges we had to overcome in our consumer product business:
1. Wrong pricing caused by distributor invoicing errors or retailer errors, resulting in a shelf price that was too high.
2. Back room stock never made it to the shelf.
3. Missed Deliveries of either the wrong product or no delivery at all.
4. An oversold retailer who bought too many other products from our distributor’s rep, then punished him with no orders of anything that rep was selling – including our product.
5. Wrong product code programmed into the cash registers, resulted in sales that were not counted, causing the retailer to never reorder because his reports showed excess (phantom) inventory.
6. Back door scanner was mis-programmed, so our product was refused as “unauthorized” and sent back to the distributor’s warehouse, and another brand took our spot before the problem could be sorted out.
7. Unconcerned retailers and/or sales reps who didn’t recognize our product as profitable.
8. Potato chips had been placed in front of our products hiding them from view.
9. Six packs entered as twelve packs at the corporate buyer’s computer, so when our product sold out, the computer showed (phantom) inventory remaining in the retailer’s warehouse, causing us to be discontinued for being a “slow mover.”
10. A tired stocking clerk who grew weary of constantly restocking our product (because it was selling so fast) pulled the shelf tags preventing our product from being reordered, thus saving himself some work.
There are many, many more horror stories we could cite, but the point is, it doesn’t much matter if your business card matches your letterhead when you are out of stock. You must protect your brand from getting the reputation of being hard to get, undependable, or a slow mover. No matter whose fault it may be, everybody will blame your brand! So, roll up your sleeves and take control with constant vigilance at store level, NOW!
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