As the eCommerce industry grows, so does the range of different sales channels you can explore.
But our guest on this week’s podcast episode believes you shouldn’t discount more traditional channels when looking to grow your business.
Maureen Mwangi is a ‘big box’ retail expert and helps her clients get stocked on some of the biggest retail chains in the US.
In this episode, I quizzed her about when a brand is ready for retail, how to get it ready, and how to create agreements with retail buyers that are a win/win.
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- 00:00 – Introduction to Guest: Maureen Mwangi
- 01:20 – Maureen’s Background
- 05:14 – Can Smaller E-commerce Brands Enter Retail?
- 07:27 – Challenges in Retail Entry
- 10:42 – Launching with Retail as the First Channel: Is It Advisable?
- 11:26 – Crafting Retail Contracts and Protecting Brand Interests
- 15:49 – The Role of Product Packaging in Retail Success
- 19:31 – How to Start Connecting with Retailers
- 22:08 – Pricing Considerations for Retail
- 25:09 – A Case Study: An E-commerce Business’s Journey into Retail
- 28:34 – Where to Find Maureen
Hey folks, welcome back to another episode of The Brand Builder Show. And this week podcast is going to be a great episode all about getting your products into retail, big box stores, how you can develop another channel for your E-commerce business in retail. And to talk through that exciting opportunity, we’ve got Maureen on the show today. Maureen, thanks for jumping on the podcast today.
Maureen Mwangi 00:22
Thank you for having me, Ben, super excited to share my experience in all things retail and E commerce. Yeah, now
Ben Donovan 00:27
we’re excited to dive into it as well. It’s a topic that we haven’t talked about loads because we traditionally are so focused on E commerce and selling online direct to consumer. But retail does present a really big opportunity. We’ve had a few guests on that have brands that are absolutely crushing it in retail. We’ve had a couple of the founders from Simple Modern on who are just crushing it in retail, I just saw they got a partnership with Dude Perfect the other day so my kids are just overjoyed about that. But you know, brands like that are crushing it and retail. And I think often we think that as smaller quote unquote, brands, you know, we maybe don’t have as many opportunities. So I’d love to try and bust some of those myths, hopefully with you today and talk through, talk through that. Before we do give us a bit of a background about yourself, tell us where you’ve, you’ve come from in terms of your business experience, and what’s brought you to where you are today.
Maureen Mwangi 01:20
Got it absolutely. So happy to do that. So I typically usually say that my entrepreneurship journey started at the dinner table when I was 14 years old. So I grew up in Nairobi, Kenya. And both my mom and my dad are entrepreneurs that literally own sort of like a hardware store. So if you’re in the US listening to this, it’s synonymous to Home Depot. And they’ve done that for over 23 years. So as a child and all your parents are entrepreneurs, the only thing they talk about at the table is how to make money, how to stand out and how to market. And so when we were growing up, my brother and I constantly wanted to have a different conversation on the table. But we never understood why it was never the case, especially when the markets in Kenya opened up. Globalization became a thing. So everybody could actually go to China and source products. So we didn’t know that that opening up of the market was an issue to my parents, because the minute that happened, their sales began to tank, the business began to plateau. And at one point in time, I usually say this was the pivotal moment, my mum passed out when she lost everything in her business. And it was a matter of what do I do. And the only thing I’ve known how to do in business is just to be an entrepreneur and sell products. And so for me, I really struggled because I just couldn’t make sense. Like what’s so hard about making money up until they hired a consultant and the consultant told them that you need to start branding yourself. And you need to start finding a way on how you can stand out because anybody can sell what you’re selling. And so that is what created a lot of curiosity for me and allowed me to pursue a master’s in the US. And the reason why I came in I did a master’s in business analytics I did not know was just marketing analytics at the University of Rochester. And that opened up doors for me where I got the opportunity to work for Nielsen, a market research company. I did a lot of predictive analytics, forecasting, brand strategy. And I was like, I kind of know the supplier side, let me go to the manufacturer side, where we make products, we build the brands, we do the marketing, and do all the exciting stuff get into retail. And that’s when I moved to the supplier side and I got the opportunity to work with some of the most beloved American brands, like Lays, Loreal, Dove, Nivea, you name it, I’ve kind of done it. But I’ve done it all from strategy to communications. And to me, that’s when I realized, I now know what makes the big brands the big brands. And this information is not available for the small brands. And so I started dabbling with my parents business, I noticed this thing kind of works. It’s what led me to creating my company started consulting the really focuses on teaching, emerging ecommerce entrepreneurs, the sales and marketing strategies, they need to turn their beloved product brands into a household name. So that’s my story. So I would say my parents are literally the catalyst behind all this.
Ben Donovan 04:13
Amazing story. And it’s amazing how, you know, this is Episode 80 something of this podcast and, you know, of the 80. You know, entrepreneurs we’ve interviewed, how many of the founding stories come from challenge and adversity? And I think that’s what I tried to tell our Brand Builder University community so much is that the challenges we face because there are many, and I have to sort of coach people through many of those challenges, that the challenge, the challenges that we face really do define us as entrepreneurs, because the definition really of an entrepreneur is the ability to solve problems. And so when challenges come our way, that’s kind of the qualification for being an entrepreneur, which is not as glamorous as a lot of people make the entrepreneurial journey out to be but it comes with its challenges. So hat’s off to you, you know, for taking on that adversity and, and creating an amazing sort of career out of it. And we get to learn from your experiences to today, which is amazing. And you mentioned they’re big brands, small brands, I think the first thing I really want to try and cover is the idea of retails selling to retail on a sort of a wholesale basis. Is that a tactic for only brands, once they reach a certain huge size? Or can smaller brands participate? What kind of level does a an E-commerce brand need to get to before they start considering the idea of going into retail?
Maureen Mwangi 05:40
So that’s a really great question. And I have two answers to that. I don’t think there is a level that you need to be at in order to get into retail. I personally think retail is a personal choice. And this is why I say this, because retail is an added channel, it’s like being on E-commerce, it’s like doing it, it’s like selling on Etsy, or selling in other people’s platforms. Just for context, it’s just another channel. For me, I usually tell people, do you have the resources to get into retail? And when I talk about having the resources to getting into retail, I basically mean, do you have the finances? Can you fulfill a high purchase order? Do you have a community or a traffic building system that can drive people that because one thing I usually tell people is that retailers literally give you the shelf? That’s all they give you. It’s your job as a brand builder to figure out how are you going to drive traffic there? It’s your job also, as a CEO and a brand builder, to figure out? Do you have money to incentivize people when they do decide to do promotions? Because promotions is still an expense that you end up taking on. So for me, my feedback is always do you have the resources? Do you feel like you have the investment? Do you have some backing? Do you have venture capitalists? Can you take it off from your profits in order to do this? And are you doing this as a long term sustainable channel? Because to be honest, retail is not a quick fix. You cannot get in and say I’ll be there in one year and then choose to leave? No, it’s a long term game, because it’s a partnership. You’re building a partnership with this channel, and you’re trying to find a way for both of you guys to make money.
Ben Donovan 07:27
Yeah, yeah. There’s a lot to unpack there that you’ve already mentioned. And I think that it would be good to break down some of it sort of step by step you. One of your expertise is is getting brands, quote unquote, retail ready, ready for retail? I think the first thing with that the first consideration you mentioned there is financing. I think a lot of people think that, you know if they get a big order from retail is going to transform their business. But as you rightly said, it could be a challenge from a financial perspective. Talk to us about those challenges, what do initial POs typically look like? You know, and then what are those financial challenges that that can place on a startup?
Maureen Mwangi 08:08
So whatever. Okay, so this is a good point, because we literally have literally got a client into retail just two years ago. And when you’re going into a buyer, really good buyers usually sort of do like a test case and test drive. And they determine that the PO size based on the demand data, you showed them ahead of time. So for this client of mine, they’re already having some sort of success on the E-commerce platform. So when you look at the data, you could see some, like the highest that ever made wasn’t 150 units. So what happened with that buyer, they said, let me give you a few stores. So this where a few stores in the Detroit Michigan area in the US. And that have first year was 150 units. And the beauty of that when I talk about the financing is, depending on the retailer, we have certain retailers that will pay you within the first time you supply, other people will pay you within 30, 60, 90, 120. The other people who will pay you after you sold your product, just depends on what the agreement looks like. And so for this person, she was lucky that her PO was being paid 30 days after the product had been delivered. And so her job was to make sure that those five stores she had been given in Michigan, the product sold out. And so when the product sold out, the order now bumped up to 100 to 200. Then he bumped up to 250 then it became a nationwide conversation. That’s why the finances now became such a big deal because not only does she have to think about three products, 300 products, she has to think about 30,000, 40,000. Does she have the money for that? And that’s when the investor conversations came in? Yeah. So a lot of times it’s dependent on how much the buyer wants from you based on the data you’ve presented. But also it’s the Your willingness, like what can you do to start off with? And can you prove out that you have that demand?
Ben Donovan 10:07
Yeah, yeah. Does the journey often look like that with the test or whatever, big box retail come in and just place a big order, initially, without having to know?
Maureen Mwangi 10:17
A lot of times, I would recommend a test order, because also remember, they’re betting on you. Right? They want to, because this is a partnership, it’s a relationship, they still have other people who still want that shelf space. So they want to bet on you see the success rate and then continue from there. Because also, they also try and see if they can, they are making money if they can maximize the productivity at shelf two.
Ben Donovan 10:42
Do you ever recommend a business try and launch with retail being their first channel?
Maureen Mwangi 10:46
Personal opinion, no. Why? Just you, for me, I’m all about scientific position. Let the data inform the decisions that you make, right. And so if you’ve had success in your E-commerce platform, you know your profitability, you know, your customer size, you know the promotions that make you money, like you are so confident to sell to a buyer. If you don’t have that kind of data, you’re probably even going to be stumbling at the buyer meeting. And so you won’t even have that confidence to make yourself stand out and also think it’s a lot mentally to jump into retail from the get go. It’s a lot mentally.
Ben Donovan 10:46
Yeah. Good. Okay, so that’s financing initial order. Once you get that initial order, what are the, how should you set up a contract? Are there any sort of pitfalls to be aware of? How can brand owners protect themselves? Are there any, you know, big sort of negative things you see or kind of shady tactics from big box retailers that are tried?
Maureen Mwangi 11:48
I think for me, what I would usually tell ecommerce entrepreneurs, there’s there’s a lot on the legal side that I am not the lawyer, then I don’t know how to do that. But I usually really tell them to look at like the promotional incentives, like what’s in it for them? How much are they making? Because where people really get stumped is when it comes to getting the product to move really fast with driving the velocity. So most people think that if I put the product on shelf, it will sell itself kinda like build it and they’ll come. And then you realize, “Oh, my god, nobody’s coming, the only way to move this product is to actually discount it”. So now this is where the question comes in. How much money are you making? If you discount, are you losing? If you’re losing, is this really a worthy investment? That part is the part I have seen a lot of people don’t look at. And that is what makes retail very expensive for an E-commerce entrepreneur. Like right now I have clients who are very successful in retail, and they’re building their e commerce platform. And often, the main thing they tell them is that this is costly. I need my E commerce platform to make it up for me. And you know why that is an issue like with every product based entrepreneur, like you know, this, there’s a lot of seasonality, right, and people never think about seasonality ahead of time. So what happens in your down months, for the beauty space, the dark months tend to be the summertime, you will notice a lot in your E commerce and you will notice a lull in the retail storefront. And when there is a law that retailers come and tell you, we’ve got to incentivize, you’ve got to promote, you’ve got to promote, do you have that money, that’s the only thing from a marketing standpoint, that I usually tell people to make sure that they baked in promotional incentive into their P&L?
Ben Donovan 13:40
It’s interesting because like many, I’m sure would have had the assumption that when you sell to retail, you sell your X amount of units. And you’re kind of like, “Okay, you might have washed my hands or that, you guys have got the units, you put them on your shelves, you’ll sell them I don’t need to do anything. But you’re talking about getting people in front of those products strategies for that. That’s quite a unique thing I’ve heard about, you’re saying that obviously needs to be done to maximize the opportunity.
Maureen Mwangi 14:05
It’s because it’s it’s a partnership, right? It’s because people forget people think you’re just giving me the shelf. No, this this person is investing in you, investing in your brand. It’s trusting you. This is all human conversation, right? And there’s another person, your competitor of the same shelf set that is also doing more to move their product, especially now we are in a highly competitive market. So you’ve got to think about how do I get my people which now brings me to the second thing that people also forget is positioning. And I know positioning is a word that is thrown out there. And people really don’t know what what exactly it means. For me. It’s like what is the idea that will unlock your customers by motivator? Why? Because somebody has a reason as to why they buy a product. Is that idea clear and compelling enough to drive that distinction? Because what I’ve noticed is businesses and E-commerce brands try so hard to be different. Instead of spending time figuring out what is my distinction? Because the your distinction is what influences your perception, which is that what influences the sales you make in your new brand? That positioning work has to be done even before we talk about the financing. It’s like, Do you know the idea behind you? Would you know, the idea that would unlock your customers buy motivator? That’s it.
Ben Donovan 15:50
Yeah, definitely. What about when it says on the shelf, how you don’t have obviously a huge amount of control over how it’s presented from a shelving point of view. But packaging is a consideration that a lot of E-commerce startups, I feel don’t put enough time and energy into, you know, they think, Well, I’m just going to put it in a basic box because nobody sees the box before they write. And then we talk about maybe it enhances the customer experience when they receive the product. So might help with reviews, that’s about the extent we’ll go to maybe even Oh, if I do a nice box, I can put it in the in the photos to help it sell whatever, right. But in retail packaging is obviously a whole nother consideration because they don’t have a product listing page to be able to read. So what are some of the mindset shifts and some of the key things that need to be considered with regards to packaging.
Maureen Mwangi 16:43
So packaging is complex to entrepreneurs, but it’s the easiest part of it. You know why? Depending on what category you are in, there are settings, table stakes that have to be there, in order for your product to stand out. That work has already been done by your competitors. You know what you need to do, just walk into the retail store you want to get into, take a picture of your shelf set. And literally look at the similarities across all the products. You know why? If that product has been placed on shelf, it’s passed, the buyers vetted, it’s been vetted by the buyer. So that means it works. So what you need to do is identify how can I get my product to be closely similar to what’s on shelf. That already gives you a winning psychology or a winning strategy when it comes to packaging. And then also, those brands have already done a lot of customer work. They’ve done a lot of customer psychology analysis, you’re already going to bake that into your packaging design ahead of time. Like it’s such a simple strategy that people will forego or overlook. But it’s just as simple as that. You want to be a target in the US, go to your category, take a picture, look at what all the brands have, try and simulate. I’m not saying copy and paste, because I personally believe all brands are unique. And then try your best to mirror that as much as possible. Otherwise, invest hundreds and thousands of dollars into customer packaging research, of which you probably don’t have the big brands do that?
Ben Donovan 18:26
Yeah, no, definitely, definitely let them do it. And you can learn from them for sure is a great tip. We just went to Portugal on holiday and we spent a day in in Porto in the city and looking around closer. I’m working on a clothing like fashion project at the moment, like a start up. When we’re doing and I looked, we went kind of to some of the clothes shops, and I found myself doing exactly that looking at the packaging and looking at how they present things. And there’s so many little ideas and nuances that I just never would have considered because our ability to create from nothing, you know, is actually quite limited. You know, we need inspiration to be able to create something. And so I think that’s a great tip from the inspiration point of view. And also I think from the information, because we underestimate the amount of information maybe that needs to go on packaging in retail because again, in E-commerce, we don’t need to give the information on the packaging as much, right? You do still need some but you know, because the information is there on the product listing whereas in retail or you can rely on is is our packaging. So, yes, that’s some great tips for sure. In terms of getting started with retailers, what are some of the things that a brand needs to do, really to get their foot in the door? You know, this all sounds great. But I’m sure there’s a lot of people screaming at me, Ben, how do I find out how do we actually get in contact with these people? What’s the first step? Where do we start with this whole process of getting in?
Maureen Mwangi 19:52
So first things first is have your pitch deck. I usually say like whether you are planning to get into Retail and are planning to get into retail, I strongly believe every branch should have a pitch deck. And a pitch deck is basically a deck that summarizes who you are? What your sales have been? What your competitive set looks like? What is your distinctive factor? What are the packaging elements that have to be? What’s your product photography, like, then once you do that, it gives me the assurity. And the clarity that you can sell, you can sell your brand, because a lot of people are able to articulate or sell their brand to somebody else. And then really not stop thinking about trade shows and expos that you can attend. So for example, there’s one that usually that there’s one big event where you have a lot of buyers, it’s usually the Expo West or Expo East. Attend those trade shows, go and sell your product to buyers, have those conversations, because that’s where you meet a lot of these buyers. And also the manufacturers like you’ll find a lot of manufacturers attending because they really want to look at what’s the new innovation in market. That’s even where small businesses start getting bought. If you think about acquisition, you’ll probably find a manufacturer who’s willing to acquire you, but you sort of have to present yourself at those trade shows and those emails. I know what people are trying to do is stalk a buyer, send them a message on LinkedIn, that rarely works. You know why? First of all, also the thing with buyers, I try to rotate a lot internally, just because of biases. And that’s not something internally, the organization’s want to deal with. So if you’re constantly sending a message on LinkedIn, how many other people are doing that, your message will get overlooked. And I don’t even think a buyer wants to use their LinkedIn profile to get somebody to sell themselves. So I say find vendor events, vendor meetings locally in your region. If you really want to come to the US and you’re in the UK, find the big ones like Expo East, Expo West, attend to those because that gives you, it opens your eyes as to what vendors are looking for and gives you a chance to pitch yourself to them. And you never know where that conversation could go to.
Ben Donovan 22:08
Yeah. Once you do begin those conversations, the vendors, the retail companies will undoubtedly ask, Well, what price are you offering your product? You talked earlier about discounts, you know, being part of the game and margins, etc. What are some of the pricing considerations when you pitch an offer price to retail if someone has, for example, a classic example in E commerce a product that retails on Amazon or their store for $30? They source it for $6. It’s $1 of shipping? Those are the kind of numbers you might be working with what then do you present to retail? Because you obviously need to give them margin but you need some margin? Do you have like a formula that works for that out? Or how do you approach that?
Maureen Mwangi 22:54
How I approach that is I typically ask people to have their wholesale price and their retail price. But then also remember with retailers, some of them have their own strategy, they’ll tell you, some people will do a 60:40 split. Others will do a 70:30 split, it varies by retail. But when when I’m talking to people, I’m usually like, make sure you have your wholesale price at the back of your mind. Because that is what you’re going to sell the retail. That’s what you’re going to pitch to the retailer with. And that’s another mistake I noticed a lot of entrepreneurs make is they don’t they don’t have pricing strategies that can cut across all channels, and other people just think E-commerce or retail. And so they forget to think about “If I was to do wholesale, what’s my wholesale price?” So before you even go and pitch ask yourself, “Do I have a pricing strategy for different channels?” If you do, when and goods so if you’re pitching to a buyer, you’re probably gonna go at your wholesale price. But then also a caveat here, there’s some splits that they will ask you for. So it’s your job to figure out, “Can you pull this?” Yeah, it’s not a one size fits all when it comes to pricing? Yeah. Oh, the margins are different. Yeah.
Ben Donovan 24:11
Yeah, I was just gonna say I think it is worth noting the difference on the margins, because with wholesale to retail, you don’t have your advertising costs. You don’t have your fulfillment costs. You know, there’s a lot of costs that are taken out. And so a lot of the times you can sell 50-60% of your retail price to wholesale, but still, you know, make good sort of 30% or more margins on that. And people think, “Well, if I’m selling a half price, how do I make those margins?” Well, because of those facts, you are selling a bulk load of goods that you deliver at one time to someone and not only can you achieve those margins, actually it can be great for cash flow can be challenging to cash flow when you need to produce the first amount but then you know you if you’ve got good terms set up like you said net 30 days. You can, you know get paid 30 days after all of the goods are delivered, whereas that order might take you 2, 3, 4 months to sell through DTC or Amazon so it can be a blessing and a curse for cash flow.
Maureen Mwangi 25:07
Ben Donovan 25:09
Definitely. Cool. Okay. So, in terms of your experiences, have you got any sort of like real world examples? You know, maybe off clients or case studies obviously don’t have to give sort of details about the brands, but just, I suppose juice looking to finish up the episode by inspiring ecommerce brands about the journey of say some, you know, six, seven figure, ecommerce brands that then pivoted into retail as well. And the kind of the benefit that it had for their businesses or anything like that?
Maureen Mwangi 25:39
Yes, absolutely. We can talk about the earlier on, I was talking about a client who got purchase order of 100. So when she was getting into retail, she didn’t even have a lot of success in E commerce. She was just about a five figure brand. We’re talking about 50,000 annually. That’s mostly done with umbrellas. But luckily, she attended like what what I was telling you vendor meeting that was being hosted by the Chamber of Commerce in her lock her local state, and she built a great relationship. She was ready with her pitch dead because she knew her brand really well. And she got that opportunity. And that pushed her brand to like multi six figure within a year. So this just goes to show you that if if you mentally are ready, because for her, she was like Marine, and I’m telling you, she’s like, she was 68 years old. And she was like, I don’t have the energy to sort of compete with the whole online space, like you probably know online is getting crazy with the videos and the UGC content and she was like, worried I’m 68 years old, I kind of just want something that I want to retire, just easy ease into lead in. That’s why she jumped into it. She jumped into retail got that great conversation with the buyer started off at 100 grew up 150, 200 is now in multiple stores. But I can tell you one thing. The minute she got that order, she was going to that store every single day to sell. Because she could not invest in shelf, you could not invest in Al shelf display. She was the person in store. So you can imagine a 6080 and old lady selling her product. So the last is did really, really well. And she was so she sent me a message yesterday. She’s like Maureen, I’m on track to being a millionaire. I couldn’t have done this. And for her that was exciting. Because like you mentioned before, it’s one huge order. You ship it, you go, and you kind of don’t have to scramble with this one sale formula E-commerce running up to UGC content. And she has been doing really well just through the partnership. But let me tell you, she works hard. And I told you she shows up at every store. She’s always doing activations, traveling across the US just to make sure her product is top of mind across people.
Ben Donovan 27:59
Yeah, amazing. Amazing. Now that’s really, really helpful and very inspiring for a lot of our listeners, I’m sure. Is there anything that I have not asked you that you think it would be good to mention on the topic?
Maureen Mwangi 28:12
No, I think we’ve covered it all. I think retail retail is a very specific topic. But it’s also it’s also a really good top up segment or a good channel to get into if you feel like you’ve you’ve maxed out your E-commerce and you want something incremental. I would, no hesitations on retail, absolutely love it, but just be prepared. That’s what they say.
Ben Donovan 28:34
Yeah, absolutely. Obviously, you’ve got a lot of experience with this. You have clients that you work with on this basis. If someone wants to learn more and reach out and potentially you know, work with yourself, where can they find out more information about you?
The best the best place, you can go to my website, but I usually recommend people go into my podcast. It’s called the product entrepreneur podcast. It’s on all platforms, Spotify, Apple, it’s also on YouTube, that that’s where you can get a lot of insights. And from that podcast, you can go to my website, which is www.startwardconsulting.com
Ben Donovan 29:09
Amazing. Well, we’ll include the links to those resources in the show notes and a description of course, Maureen, this has been super insightful. Very, very helpful. And we really appreciate you taking the time out to come on the show.
Maureen Mwangi 29:22
Thank you for having me, loved having this conversation.
Ben Donovan 29:25
My pleasure. Well, there we go, folks. That is an overview of how to get your products in retail. I hope that you found this very useful. I know there was lots that I’ve learned and I know that there’ll be some great stories coming out of people taking action on the tips from this episode. If you have liked it, please do us a favor by and like share, subscribe, all that good stuff, and that we’ll see in the next episode same time next week. Take care