Have you seen this week’s episode of The Entrepreneur Road Show yet? You should.
Today we are going to try something new. The below video is a summary of the content you will find in the following article. I know a lot of you are lazy and would rather watch a video than read an article, so I have made this video as an experiment. So please let me know what you think of the addition of video to a normal, everyday post in the comment section. Let me know if it was useful. Oh, and I still recommend reading the content! Thanks!
So you have a great product, now what?
You need to either open a store of your own (or website), or find stores to wholesale your products to. The problem with starting your own physical store is that you have to spend a lot of time and money to operate it, and if you only have one or two different products, your store will be pretty boring. Wholesale entails selling your products at a discounted rate to established stores whom then turn around and resell your products with a markup. My expertise is in wholesale, and I think establishing strong wholesale accounts with retailers is one of the best ways to grow your company. This article refers to my experience selling products via wholesale, however, if you are selling something different, like a service, the lessons here still pertain to you.
So how do you get your first wholesale account? Well, the first sale is the hardest; there is no doubt about that. And the sad truth is, even if you don’t like sales, if you want to be a successful entrepreneur you better be able to sell.
So let’s first focus on how I made my first sale for Sand Shack, my environmentally friendly brand of resort apparel and accessories.
I started Sand Shack in 2006 and made my first sale that summer, and that sale is still the most exciting sale I remember making.
I had been working on and developing the company for three months prior to trying to sell any Sand Shack product. Needless to say, the anticipation and nervousness of whether or not I could even sell the products was at it’s peak by the time I was ready to start selling. Although I was only a freshman in college, 19 years old, I was determined to succeed. However, on my first day of trying to sell Sand Shack products to stores in Cape Cod, MA I came back empty handed. Nothing. Needless to say it was demoralizing. How was I going to build a company if I couldn’t sell my own products? I felt like I had a good plan. I was putting myself out there. I was offering a product of value that a store a store could make profit from. Why didn’t I sell something on that first day? BECAUSE it was my first day! I was inexperienced, not to mention a nervous wreck. I had sold things before, but this time it was different. I was trying to start a company. Anyways, I regrouped my thoughts and controlled my emotions and the next day I went out with a little more confidence, and what’d ya know, I made my first sale. Since then I have also started a coffee company, and I am proud to say that I sold to the first store I ever pitched to after planning and developing the company. But there is more to the story than what I just laid out. Here are five things I think you need to do in order to get your first customer.
1. Plan Plan Plan
- If you don’t plan you can’t sell. If you don’t have a well thought out product, you don’t have anything to sell. And if your product is not of value to people or fulfills a need, nobody will want it. Great businesses don’t develop overnight; they require months if not years of planning. Like I mentioned, Sand Shack was in the planning stages for three months before I tried selling anything. Another example of this comes from a company that was exhibiting in the booth across from me at the recent SurfExpo in Orlando, Florida. The owner of that company had been planning and developing his T-Shirt company for three years before launching it in August of 2008. Guess what? His products are already being sold in Bloomingdales and Nordstrom. If he hadn’t taking those three years to carefully plan out his company do you think he would be where he is today?
2. Do it on your own
- You are going to make the first sale for your company, the sooner you accept that the sooner you will make the sale. You are the most passionate person there is about the product your company is selling. If you don’t get out there and pitch your product, nobody will. This is especially true for a small startup. Not only are you the most passionate person about your products, but you don’t have the funds to pay a team of salespeople to sell for you (unless they are strictly on commission). If you do, 99% of other startups hate you.
3. You’ve GOTS to get out there.
- It’s not a typo. GOTS – Get Out There Stupid. This is self-explanatory. If you don’t get out there and start selling, nothing is going to happen. Once your product is developed you just have to get out there and start pitching to your market. You’ve GOTS to attend tradeshows, networking events, and social gatherings where your target market will be. Selling can either be the most exciting or daunting (or both) part of starting a business. But if you don’t get out there and start selling your product, your business has failed before it even had a chance to succeed.
4. Plan out your introduction
- You have about 30 seconds to make a good impression on your potential customer. If you come off the street without a clear, concise message about who you are, what you’re selling, and why it is good for them to buy your product or service, you will not make the sale. My initial pitch is always the same. Knock them out at the beginning and then you have more wiggle room to improvise once you have captured their attention.
5. Ask for the Sale
- If they seem interested, ask for the sale. It’s as simple as that. You have a greater chance at making a sale if you ask for it. There are two reasons for this. Number 1: The person wants your products and is just waiting for you to ask. Number 2: The person is not sure, but when you ask for the sale they have difficulty saying no (some people don’t like to say no, why not take advantage of that??!!).
So, now you’ve got your first customer. Congratulations! You’ve gone through all the trouble, time, and money to acquire a customer, and you probably didn’t make much money on the initial sale. Don’t despair, however. The key is not in acquiring customers it is in retaining customers. Keeping your customers happy is essential if you want to grow your company and start making serious profits.
How to retain and keep your customers will be discussed on a deeper level in a future segment of this site’s How to Be a Successful Entrepreneur Guide.
So, how did you get your first customer? If you haven’t gotten your first customer yet, how do you plan on getting one? Do you have anything to ad to the above list? Let’s discuss this in the comment section.
{ 6 comments… read them below or add one }
I really love to watch your videos, but what I find is, that if your post is about something more “technical” or about strategy its better to just write some text. Video is fine for all the lazy fellahs, but it can be also some kind of an overload. Plain text is also better for selective reading.
On the other hand: The video in your persistence-post is priceless. There is no substitude for that. It was awesome to see you operate under real conditions. No bla bla or creepy talk, plain, direct action. So when there is a more emotional or real action topic than a video is really invaluable.
And I think too many clips won’t keep your blog real, like a blog is meant to be – just oldsk00l.
Jens,
Cool, thanks for the great advice and insights. I definitely agree with you on that point…it is a little repetitive eh. And real life action is more valuable and rare on the internet than a talking head sitting in the kitchen…yes…I see.
Cheers,
Brian
At the end of the Roadshow video 1.2 (or 1.3?) you are taping yourself singing in the car, that’s of no entrepreneurial value, but it delivers your personality and it gives the video a great touch. So these little things are really nice. Just think of a bathroom with black tiles that got little spots of gold in it – these look way more awesome than tiles made out of pure gold.
Jens, haha, yes, the singing was fun. I totally get what you mean about the video. Showing personality is difficult with words, but video is a completely different story. What I have found recently is that video is a very powerful tool online for a number of reasons. I think one of the ways I can use it better in normal posts is not to necessarily outline the entire article, but maybe use it to show a certain thing that words cannot express, sortof like how I did it in this post: http://brianlinton.com/what-if-my-company-fails/. haha, also, that’s a neat analogy about the speckled gold tiles (although if I had my choice I would want pure gold, no?)
Hey Brian,
Great stuff, I really enjoy hearing your opinions on entrepreneurship and actually seeing you put your words into action. I am maybe a year younger than you and I am just starting to get into entrepreneurship, so I am trying to take in any information I can get before I actually go out there and start a business or sell a product.
I was wondering, what is your opinion on wholeselling versus directly selling a product? Do you think it is better to start off with one or the other? For example, directly sell your product to establish your brand then try to wholesell it? I thought I remember reading that you started off selling jewelry at the shore (I may be mistaken though). Should you keep doing both, meaning sell your product on your website and in stores (like you do for Sand Shack) or eventually focus one option? I see you suggest to use wholesale to establish your brand, but could you elaborate some more and maybe tell the pros and cons of each choice? Thanks a lot.
-Adam
hey Adam,
Thanks for stopping by! To answer your questions: I actually started with wholesale. I started by just going into random stores in Cape Cod, MA and selling them wholesale quantity jewelry. Now I incorporate a small amount of retail sales into my website…but 98% of the business is still wholesale. I am a big fan of wholesale as opposed to retail. Here is why. The overhead is lower (this is only if the customer doesn’t need it right away). You can take large orders, then manufacture them, then deliver. This is because most stores place orders months in advance…retail doesn’t allow this, the endline consumer buys retail, and when they buy, they want it right then and there. Secondly, although the profit margin on wholesale is smaller, the quantity and overall gross revenue potential is higher. Thirdly, it is a way to get your brand out there quick and make it look bigger than it actually is. If you have a retail location you will only be able to start with that one location, it is too expensive to open multiple locations off the bat unless you have millions in funding. Wholesale allows you to get into hundreds of stores. The stores buy the product and do the hard work for you, which is selling them to endline customers (although you do want to help them sell the product in any way you can…your real profit is in the reorders). Now that my brand is ’somewhat’ established I am now considering opening up a few retail locations…but I would have never done that even a year ago. A retail location has the potential to be highly profitable, but unless you have the time, money, and brand strength to make it work, it is not a good way to go. I would always recommend selling wholesale at first (and a little retail online). So that’s my five cents. I hope it helped… by the way, this is a good topic for a future article. I hope you keep coming back to see what’s new!!!
Also, consider checking out the business model of the company ‘Life is Good’. They are similar to how I operate Sand Shack. Google search life is good to read their story.
Oh, and here is a related article, about tradeshows and store-to-store selling: http://brianlinton.com/is-attending-a-tradeshow-or-selling-store-to-store-better/
Cheers,
Brian