What you’ll learn:
Whether you are a CPG startup or established company, you’ve dealt with the challenges of getting in-store at National Retail Channels. Today’s episode is full of sage advice on how to get products in front of buyers, along with marketing strategies to raise awareness on products already in-store. As most business owners know, getting on the shelf is half the battle—it’s how to stay there that matters.
About our guest:
Chris Rebsamen is a strategic senior sales/business development executive, with extensive 30 years’ experience in the consumer product industry. He manages sales and marketing efforts in the National Retail Channel points of Distribution. Chris is driven by implementing innovation and generating new revenue at existing and new National Retail Accounts across all channels. He started Jupiter Sales and Marketing as a turnkey sales and marketing solution for CPG and consumer product companies that want to both learn and succeed in the end to end business of retail. JSM works with startups to established firms with revenues of up to $100MM per year.
Key takeaways from this episode:
- Chris’s path to founder of Jupiter Sales and Marketing—2:00
- Park City, Utah’s underrated entrepreneurial network—8:12
- The biggest lesson startups learn the hard way when they get in-store—10:00
- Top 3 retailers JSM accelerates in—10:25
- The most common misconception entrepreneurs have when trying to get instore—12:55
- Client example: what happens 2 years after getting in-store at Walmart?—14:00
- What percent of JSM clients end up in-store? –15:10
- Marketing strategies to raise product awareness once in-store—15:35
- Your silent salesperson: product packaging—16:30
- Sales strategies don’t start with big-box retailers—17:20
- Why CPG should start with regional sales stores—18:40
- How to navigate tariffs on products already in-store—21:00
- Pricing strategies, net margin & EBITA goals—22:20
- CFO Controller: a key early investment for entrepreneurs—28:00
- Key advice for entrepreneurs to hold onto capital in early stages of growth—28:45
- The best strategy and channel for moving excess inventory—31:15
Speaker 1: Welcome to the Page 1 Podcast, a twice weekly podcast featuring a variety of guests and thought leaders on topics ranging from channel strategies to tariffs, influencer marketing, best in class product launches, and all the details about how to accelerate your eCommerce sales with the big box retailers or what we call rCommerce. Now here’s your host, Luke Peters.
Luke Peters: Thanks for joining us on the page one podcast. I am your host, Luke Peters. This is where I bring you the best and brightest leaders to share consumer product sales and marketing strategies that will help you grow your business. I’m the CEO and founder of NewAir Appliances, where I cut my teeth selling products online, and now I’ve started Retail Band, where we help other brands succeed in product launches, influencer marketing, and B2B online sales strategy. And really quickly, let me get this in here. I’m now offering a free evaluation of your online sales strategy, so if you’re interested, find me on LinkedIn or email me email@example.com, and we’ll try to help you generate more sales online.
Luke Peters: In this episode you’re going to learn from Chris Rebsamen on the challenges that CPG companies face today, especially startups and small companies. So, why some retail is stuck and where the growth areas are. Learn where you can still grow in store. Thanks, Chris, for joining me on the Page 1 Podcast.
Chris Rebsamen: Thank you for having me.
Luke Peters: So, a quick bio for you, Chris. Chris is the owner of Jupiter Sales and Marketing and has 30 years experience in consumer products with a focus in hard goods, textiles, food, and beverage. Chris also has a B.S. In management from St. Francis University in Pennsylvania. And anything that I left out there, Chris?
Chris Rebsamen: No, not the summary.
Luke Peters: So Chris, why don’t we start with your early years? I always love to learn what got people started are going, so maybe you could just briefly describe what formed your youth in a way that helped guide you to this point in your business career.
Chris Rebsamen: It’s a funny question because I go back when he graduated college in 1989 in May. My sister was getting married in June and came home and did a lot of work for my father. New roofs, new gardens, kind of spruced the house up to make it look good. And I went right to looking for a job, and the first job that I got I actually started working for a company called Gruber Industries, which was a division of Springs Global. That’s how I got into textile business. Springs Global was the largest U.S., at the time, manufacturer of textiles. They own brands called Wamsutta, so on, so forth.
Chris Rebsamen: And I started as a sales service rep servicing the stores at store level, so I learned about a lot of inventory, how to manage inventory, and that was kind of my intro into the retail channel. I sold a lot into the home center channel. We were living in New York. A chain called Pergament Home Centers. Kind of owned that. And that was really where I got my understanding on retail margins, ROI, and I really enjoyed it, and I’ve just stuck with it the whole way.
Chris Rebsamen: Moved on into management. I was in the picture frame industry for about 15 years, both custom and also on the ready-made side. We were dealing with customers such as AC Moore, Michael, Kohls, doing everything from ready-made to framed art, and really understanding the creative side. That was really where I got what I’ll call my MBA retail. Had some real solid people that took me under their wings to help me truly understand the challenges of retailers back then. So, then I just graduated and moved up into rankings with a smaller company in Rochester, New York, and then it was time to either buy or move. So, we moved on. I picked up my family, and we moved to Park City, Utah about 10 years ago. We didn’t have actually a game plan at all. It was more of a whim than a test.
Chris Rebsamen: And so we planted here, and then that’s how I kind of started Jupiter Sales and Marketing. Jupiter Sales and Marketing was kind of created not out of the need, just by accident. And what I mean by accident, we just had some friends in the consumer industry during the financial crisis kind of hold onto their sales that they currently had it in the marketplace, and getting cash was very difficult at that moment in time. So, they offered me a small salary and asked for me to help manage their sales and try to grow their sales as best as possible. So, I did that for a while, and then I went to look for a management position and kept coming back to Jupiter. Jupiter was again just helping those companies grow, develop new acceleration, understanding the challenges and strategies behind getting into the retail channels. So, I decided to finally make it a business instead of a hobby and 10 years. There we are.
Luke Peters: Great story. And wow, you’re fortunate, you got into Park City 10 years ago. I think the first time I went on a family vacation over there was about seven years, and I’m kicking myself for not buying a condo or something. The real estate has gone through the roof.
Chris Rebsamen: It has.
Luke Peters: Have you guys stayed in the same place, or have you kind of moved around along the way? And that must’ve been a ride in itself.
Chris Rebsamen: The funny thing is all the moving parts during the real estate housing crisis and all the Wall Street… The funny thing is that my sister was in the process of moving as well from Arizona. She had a condo up here as a second home because we had been here earlier in our lives skiing, so we knew Park City. So, we all moved into this three-bedroom condo with two dogs, nine people, and that’s how we got started. And then luckily, my sister’s neighbor was looking for someone to rent a place, and we were there for a couple of years, and we moved on. So, we’ve been in the same place for about five years now. So, we moved around few times, but it has been an experience. I have nothing I would ever… I wish I did this 20 years ago to be honest with you. But this is an experience I would never ever trade for. Hard to explain.
Luke Peters: Yeah. For the listeners out there, and I don’t want to get into inundation… I guess the inundation into Park City has already happened, but if you guys haven’t been, you fly into Salt Lake, and it’s about a 45-minute drive through an easy freeway. There’s no mountain driving, and it’s really a beautiful city with just a lot of culture and fun shops to walk in. And then of course, lots of fun skiing and snowboarding, and beyond Park City, there are tons of other snowboarding and skiing in the area with Brighton and Alta and just a bunch of other mountains. So it’s a unique place. We go to Mammoth quite often. We’re in Southern California, and if I wasn’t flying so many kids up, it would be just as quick or easier to go to Park City because you can hop on a plane and rent a car. And if not for having to load all the gear and everything, I’d probably be doing that more often. But yeah, it’s a great place.
Chris Rebsamen: It is, and what’s unique about Park City we have about 7,000 or 8,000 full-time residents. But during Sundance, we swell to tens of thousands of people in Christmas, and the funny thing is the community here is so strong for entrepreneurial because I’m also part of PandoLab, which helps the entrepreneurs learn increased strategies. So, it is an incubator for entrepreneurs. I’m very connected with them and have been involved with them as a mentor for the last six years.
Chris Rebsamen: So, I’ve been fortunate to be involved with that, and it’s such a tight-knit community here around the entrepreneurs and people kind of growing the business because at the time, Salt Lake City didn’t have a ton of jobs available. We now have the opposite problem where we don’t have enough people to fill the jobs that are needed within the Salt Lake City area. But my point being is that the school district had a program called PC Tap, which teaches students in 11th and 12th grade how to build a business from the ground up. And those opportunities in Park City have just been monumental for my children that went through the school system here. So, that’s one of things that’s kind of under the radar as far as Park City is concerned as it offers in the community.
Luke Peters: Yeah, that’s great, and it’s cool that they have that with the kids. And wow, we could do a whole another podcast on that.
Chris Rebsamen: Yeah, I know. I’m didn’t mean to deviate, I’m sorry.
Luke Peters: I got you. So, why don’t we… So, we were talking before we started this podcast just a little bit more about your firm, and it your firm operates, it sounds like, like a fractional VP of sales and marketing or like a consultancy. Can you quickly describe anything I missed there, or is there another way to describe the company?
Chris Rebsamen: We are kind of a fractional vice president or so company. We’re kind of that value add, so we provide services of marketing more in store. So, we have a sales team on the ground that’s already working and already has relationships within the retail channel. And then we also have some of our partners also have those established relationships in the years. But yes, we definitely we fit into the management side of the business, and we become part of the company’s DNA. So, we’re not just a rep firm. We’re kind of a multifunctional consumer, CPG, go-to-market sales company. We kind of sew each function.
Chris Rebsamen: But it’s very directive. One of the things we don’t do is we don’t have a pile of clients just trying to make a buck. We choose each client. We go through a process to establish and make sure of the synergy, and we’re all on the same page. So, to understand what it takes because there’s going to be work up front to get the company ready because in a lot of cases, we find that the actual entrepreneur over there, if they’re starting, they always think that getting into retail is an easy process from end to end, not understanding the hoops you have to jump through to get products on shelf. We don’t run into that with our more established companies, but one of the challenges that we do have with startups is understanding actual retail channel because it is very complex, especially in today’s market.
Luke Peters: Yeah. And that’s what we’ll focus this podcast on is on our listeners, and the listenership here is usually brand owners, so it’s right up your alley. But really to make it focused and direct what are, say, the top retailers that you guys see yourselves as experts with? And that way, these brand owners can kind of understand that and think about their own product lines and in conjunction with those retailers.
Chris Rebsamen: So if I was to take two channels where we accelerate, it would be mass in grocery. And within the grocery channel, that also includes the natural channel, which is the Whole Foods, Sprouts of the world. And as far as mass is concerned, we really do understand the business that Walmart operates. It’s hard to say where we’re experts because retail at the end of the day, first you function with different numbers, but at the end of the day, the layout of it is everybody wants to make a certain percentage after EBITDA. So, we fight sometimes because everybody’s really looking for a specialist, but in retail today, whether you’re an off price or you’re a grocery channel, a grocer, you’re still… It’s a margin game.
Chris Rebsamen: In grocery, you have filing fees, and they work on a tighter margin. So, filing fees to offset the margin, so it’s all wants are the same. Different distribution channels, different mythology. How they do the numbers in their PML could be a little different. But understanding grocery is a little bit different than off price. But at the end of the day, just it’s different. It’s not that much different. Excuse me. I’m sorry. It really isn’t. Retail is retail, but if we were to accelerate in three channels, it would be grocery, off-price, mass.
Luke Peters: Great. And so off-price, it’d be like a TJX, something like that?
Chris Rebsamen: Correct.
Luke Peters: Okay, great. So, so we’ll keep this conversation. How about we keep it focused on the mass and the off price? In that realm. We’ll stay away from grocery just because otherwise, the conversation might get too diluted. But focus on the Walmart and TJX, and again, just because the listenership here could be a lot of physical products and maybe less so on the food and beverage. And so, we can kind of direct it that way.
Luke Peters: That’s great. Thanks for clearing that part up. And you mentioned that entrepreneurs… There are often challenges because they’re not thinking about all the hoops and steps, but briefly, what is one big missing point if we were to boil everything down that entrepreneurs are missing out on in understanding how to get in store? What do you commonly run against?
Chris Rebsamen: Difficulty? If I was to really just pare it down.
Luke Peters: Them being difficult?
Chris Rebsamen: Mo. It’s just the difficulty of getting the product in front of a buyer today.
Luke Peters: Oh, I got ya. Yep.
Chris Rebsamen: I’ve talked to a lot of entrepreneurs in consumer products, and they feel like, “Well, I’ll just get my product in Walmart.” It just doesn’t happen that way anymore. And in a nutshell, that’s really pretty much our biggest obstacle. It’s the educational part of understanding the process from start to finish with a retail channel. That’s really where I find, and I’m sure others may have different opinions, but that’s kind of really where I find the disconnect.
Luke Peters: And what is the main thing that… So, you take on a client, and you want to give into Walmart. And you probably like you said, were kind of vetting the client too. You want to make sure it’s a good fit for you, so you’ve had a chance to kind of understand their product and pricing and okay. Walmart’s going to be a target. I’ll put you on the spot here a little bit, but what is your success rate, say two and a half years in, of getting them into Walmart? I know it’s very, very difficult. So, are you able to kind of put a percentage on that? And then what is usually the thing that keeps companies out of Walmart? Is it a pricing thing, a competition thing, a margin thing? It’d . be great to hear your thoughts on those.
Chris Rebsamen: So, if we were to kind of look at… You mentioned Target, but we have better success with Walmart getting product on shelves. Now, the second step to that is getting on shelf is only half the battle. It’s staying on shelf, and that’s where you get into the pull through and making sure that the consumer is aware that the product is sitting in a Walmart because we haven’t won every time. Sometimes, they’ll put you on the shelf. They give you 12 months to perform, and if you don’t perform within their minimum expectations on turn, you’re going to be removed for the next guy. So, the work really starts after you get on shelf. A lot of work to understand how to get to that point, and you have to work to get distribution channel on shelf and then after that, how do you… So, you kind of need to be able to run the awareness program at the same time as you’re trying to pitch the retailer.
Luke Peters: Okay, great. And then now, are you able to kind of give just an average percentage of how many clients you’re able to get into Walmart, like I said, two and a half years, maybe three years?
Chris Rebsamen: Probably 40%.
Luke Peters: About 40. Okay, and that’s fair, but that’s great to hear because I think for the listeners who haven’t tried, that just gives them an idea like this isn’t a slam dunk. So, 40% or so. And then once you’re in store, what are you doing to raise awareness? I’d love to hear kind of on the marketing end and what percent of sales maybe has to go into that to keep product on shelf? So, maybe the activities involved. What are folks doing to keep it on shelf, and how much are they spending?
Chris Rebsamen: It varies how much they’re spending. We normally suggest to put away three to 5% of total sales. So, if you’re doing a million dollars, you put three to 5% away for marketing funds. And those marketing funds are already preplanned through whether it’s social media outlets, through trade magazines, through good housekeeping. That is all planned out to really isolate really exactly how that works. It does change based on the category of food, beverage, hard goods.
Chris Rebsamen: You also need… One of the biggest things is your silent salesperson. Your silent salesperson is on the packaging. Remember when you’ve got a… Think about when you’re shopping in the store, what catches, why do you pick up a new product? So, you’ve got some of those tags that come off the shelf and says new item. You’ll stop and take a look at it. But if you don’t understand that product or what it does within a five second period, you’re just putting it back on shelf. So, part of the marketing behind that is to make sure that the packaging is simple, understandable quickly because the attention span of that consumer, again, is so short. And you’re getting a lot of traffic, so you have people to grab. You have your audience. It’s just a matter of trying to figure out if you know what that product, the functionality of it.
Luke Peters: That’s helpful. So, spend a lot of time in that packaging. Maybe even AB tested and three to 5% into your marketing spend, and about 40% success rate getting into Walmart. But at the same time when you’re working with brands, are you also helping them? Are you guys shooting for multiple retailers at the same time, or is it kind of a sole focus on Walmart? And so, like if Walmart doesn’t hit…
Chris Rebsamen: There are two things. We have good success inside Walmart, but that’s not where we usually start. You’ve got to have an established presence in the market, so you want to start with the smaller regional chains. You want to build your business before you get involved with Walmart. There have been a lot of entrepreneurs that have gotten into Walmart out of the gate because their product is unique, and the buyers are Walmart realized that. So, just not the thing about Walmart. Same is for Kroger or target. They also take on new products. It’s not common, but it’s still a point of difference, and it’s easy to explain that you can get wrapped up in this.
Chris Rebsamen: And that’s why entrepreneurs can go out of business because they may have taken on more than they can chew. It’s not always the right place to go. You have a lot of building blocks in between. You still have the smaller regional chains that you can go after. We have a company here local in Park City that their first major customer was Costco. Costco put them out of business just because the-
Luke Peters: Returns or?
Chris Rebsamen: Yeah. Just return. You got to be careful where you start and what kind of financial backing you have. So, a lot of these entrepreneurs are bootstrapped. If you’re bootstrapping, Walmart necessarily isn’t the best place to go.
Luke Peters: That’s sage advice. So, what are a couple of names of these regional chains that you guys also like to work with?
Chris Rebsamen: Depending on where you want to go, so a lot of in relationship to that. We deal with a lot of grocery channels. I know you didn’t want to kind of focus on that, but we get into the regional grocery chain, Whole Foods, buying offices, Sprouts. Shopco has gone out of business, and a lot of your… So, you have Menards. We focused on the grocery side of the business because that seems to be a very… It hasn’t really been affected.
Luke Peters: Well, that’s an interesting point. So, it hasn’t been as affected by Amazon as, say, a bunch of these other mid mid-market retailers or home and hardware stores.
Chris Rebsamen: Yeah, it has, but it’s funny. So, you have a lot in your smaller ACE and True Value. They have a lot of the hundred-,store chains under their umbrella as franchisees. So you have a lot of that also going on. The retail market has really kind of changed. That’s why you have more regional off-price players like City Trends and Beall’s Outlet, whether or not national like]. But the market has kind of shifted, and grocery has spent more time and efforts on the general merchandise channel because they’re trying to encompass that all one stop shop kind of philosophy. And Kroger has done a good job of it. Sprouts, Whole Foods. Whole Foods is now into apparel within their strategy. But yeah, everybody is kind of changing their way of doing retail if that makes any sense.
Luke Peters: Yeah, that’s helpful. Why don’t we talk about tariffs? I know that’s on everybody’s mind, and I’m sure you’ve had the deal with that, and it’s hard enough when you’re selling online to deal with terrorists but might even be more difficult when you’re in store because the product is already… It’s so long and so hard to get that in store placement, and then all of a sudden you got to push a tariff through. I’d love to hear a couple stories about that. Have all of the brands that you’ve worked with? Have you had to already push it through, especially if you’re in the 25% tier, which a lot of product brands are? Mine is mostly. And have you guys had to push it through? Have there been some cases where you couldn’t? And how have you kind of navigated tariffs?
Chris Rebsamen: We saw a problem ahead of time, so we kind of shifted a lot of business into other countries to kind of avoid tariffs. We had a pass on the long. It really didn’t affect our business that much because certain items that we were involved with didn’t have any tariff issues. And recently, we have shipped with some things from China to India.
Luke Peters: Well, yeah. Well, you’re fortunate to be able to do that. It’s tough for a lot of consumer electronics companies, but you guys, if you’re on more hard goods I guess, or textiles, it’s easier to kind of make that move. So, good on you for doing that. What about pricing strategies? Are you able to explain a specific price strategy that you’ve had success with whether it’s for channel conflict or omni-channel or even if it’s just how one has to think about their margin, their net margin? And then I’d love to even get deeper and talk about if you’re involved in companies’ EBITDA goals, but let’s start talking about price strategies.
Chris Rebsamen: So, pricing strategy. We have had some CPG companies that we’ve come to market where pricing we just know it’s just not going to work. And in other cases, we are always trying to create a new channel of pricing. What I mean by that. So, if there’s a product for 399 and 599, there’s a space for a 499 product. That’s kind of strategy that we’re looking at. We’re always trying to be not the highest and definitely not the lowest because we don’t want to race to the bottom. We’re always trying to see if we can sew a hole, a gap in the pricing in a retailer.
Chris Rebsamen: So, in a lot of cases, there are usually some products that you can actually go in between, but it’s a value add too. So, can you be 9.99? If you’re going to go toe-to-toe with somebody that was an established brand but while you’re a product, you have to think about the extra value add. And that goes back into not just the pricing strategy, but it also goes back into the marketing strategy for the consumer to understand why your product is a better value at 9.99 than your competitor’s at 9.99. But consistently over the years, we’ve always tried to fill the gaps and voids in pricing. There’s always a gap somewhere usually that we like to kind of go after.
Luke Peters: And how do you guys think about back ends? I mean those have to be kind of built in to some extent. Otherwise, there’s not going to be any margin left. And I know they can be different with different retailers. Is there a rule of thumb that you can share with the listeners that, hey, save 15 or 20% for backend and marketing co-ops and allowances. That’d be cool if there was kind of a rule of thumb on that. And then also, have you guys ever worked with brands that say, “Hey, we need to hit this. We need to have a 10% EBITDA, or we need to have 20% margins”? And I’m curious where a lot of these brands are hitting on the margin side?
Chris Rebsamen: Yeah. You’ve asked a pretty loaded question because there are a lot of things that can actually manipulate and change margins, cost of goods. So, your retailer comes to you and says, “I want a widget. It’s got to hit 4.99 99. Go build it. This is margin requirement.” You just build backwards to make sure that the parts and materials that you’re using to build that widget fit into the cost structure of the retailer. And in a lot of cases, some of the entrepreneurs that are coming to market are very attached to their products, and they only want to use the best ingredients. Because of that, adding in five, 10% of marketing allowances that the retailer requires, you can’t hit it unless you have to go up to a higher price. So, there are two things with that. You have less buyer remorse with the better quality of the product, less returns, so on and so forth.
Chris Rebsamen: So, a higher retail or shorter margin for the retailer is not always a bad thing because sometimes where they get lost inside is if they can buy it cheaper, have a better margin. They’re not really calculating the cost of returns, the processing returns. That’s very expensive. Yes. So, the retailer thinks that the supplier will eat it, which is true, right? It’s all factored into will cost the goods. So, I’m not really answering your question where you want, but as far as addressing the market, you’ve got to be able to keep the pricing structure competitive, and usually 10% for co-op will cover you end to end. There are some retailers that ask for a lot more, but if you can factor 10% into your cost of goods and have that margin in there and still be comfortable, you’re usually safe.
Luke Peters: Makes sense. That’s helpful to have that rule of thumb. And then again, this is a loaded question, but I’ll hopefully ask it in a way that you’re able to answer it. Now, it does sound like these are smaller priced products, so the margin and EBITDAs are different for a lot of reasons just because sometimes the sales in companies that are selling those might be also lower. But would you say that more than 50 or less than 50% of the companies are above 10% net EBITDA or net profit? I’m just curious… experience in that side because I think that it’s just fun for business owners to hear that and then grade themselves against it as far as what these companies are doing with their in store final margins.
Chris Rebsamen: Those margins are all over the place. It really is. Retailers work on single digits when it gets to EBITDA.
Luke Peters: Well, I mean on the brand side, so the actual companies.
Chris Rebsamen: Yeah, no, I know. I know. And I’m just trying to in relationship. If you can save between 10 and 20%, it’s pretty solid.
Luke Peters: Oh yeah. Well, absolutely. That’s why I’m asking. So, for sure if companies can get above 10, that can be a challenge in itself with all the backends and that’s kind of why I’m asking it. But you’re saying, from that answer, it sounds like a good chunk of companies are able to do that.
Chris Rebsamen: Yeah. It all depends on the cost of goods and the volume because the more volume you put out, the smaller your EBITDA number can be because then the dollars are greater. It is a loaded question. We do get involved with it, but I don’t think a lot of entrepreneurs are looking at that number very carefully. Entrepreneurs themselves do not look at their balance sheet and their P&L very tightly. We just ran into a company that probably invested millions of dollars, and we’re still only generating less than a million dollars in sales, so they were completely upside down just because of . the mistakes that they’ve made. So, it varies so much. All I’m going to say is that you have to have a really good CFO or controller to make sure your numbers make sense.
Luke Peters: Listen, I mean that’s an excellent… That’s funny that you brought that up, and I’d love to ask another question around it, so feedback there. Get a great CEO or CFO controller, and I can speak from personal experience on that that is extremely important. And sometimes, we as entrepreneurs run too long without it because we can just to shoot from the hip. So, that’s excellent feedback. And it sounds you’ve seen a lot of that, and that’s even on self funded companies that entrepreneurs are just to-
Chris Rebsamen: Yeah.
Luke Peters: Okay.
Chris Rebsamen: Yeah. They just don’t pay attention to the numbers. They think it’ll catch up.
Luke Peters: Until they have to.
Chris Rebsamen: Yeah. I’ve seen it too many times. The other thing is entrepreneurs change their mind so much that they want to retool, restart, repackage, and they’re already in a hole, a lot of money, even before they made their first presentation.
Luke Peters: Now, what do you think is the solution for that for them? So, if these entrepreneurs are listening or new entrepreneurs or even ones that are kind of stuck in that rut, what is the one piece of advice to get them out of it? What should they change, do differently, or implement in their companies?
Chris Rebsamen: Instead of investing money into a gazillion products… And I’m being a little facetious. Sorry.
Luke Peters: I get you.
Chris Rebsamen: But I think you need to be smart and methodical to understand and hire someone that can teach you to understand what the challenges are going into the retail channel. It’ll be painful upfront because you’re laying out some capital. At the end of the day, it will actually save you money and time and frustration because I’ve been doing this 30 years. I don’t know of a business that is more challenging than the retail channel just because of just the way the dynamic and how it works today versus when I started in the 90s when a lot of it was just relationship. Now, it’s really becoming a financial product unit. ROI at shelf. Remember, the buyers today are behind computer screens 80% of the time. Buyers today are-
Luke Peters: Yeah, they all have P&Ls.
Chris Rebsamen: Yeah. Think about it. Think about a buyer back in retail. They used to go out and build product assortments. They don’t do that anymore. And diversity localization is kind of coming in, and the consumer is becoming much more demanding, so retailers need to be more nimble and are changing faster. So, that also deters building an assortment. So, the buyer is overwhelmed today, and it’s not their fault. And they will do business with people that can actually help take more work off of their plate. To really answer your question, the entrepreneurs should put some money aside to be coached to understand the challenges, and a lot of people don’t. They burn through so much more capital, not understanding the challenges and being prepared for them, and just jumping in with both feet.
Luke Peters: Yeah, that’s good advice, Chris. So, listeners, go out there and get a coach, and also it sounds like your advice was slow down. Think more, plan more, don’t go crazy on product launches. And yeah. So, I’ll pretend I didn’t hear that last piece of advice because when you’re in the middle of 25% tariffs, that’s like status quo. You got to relaunch, but I get you.
Chris Rebsamen: Yeah. And you work with someone for 60 to 90 days and to understand your market as well because just because you have a great idea doesn’t mean the consumer is going to think you do.
Luke Peters: Cool. Well, I’m glad we went deep into that. And why don’t we finish it up with a question about excess inventory? You’re working with all these retailers and you said off channel as well. And I would love to hear kind of what is the best channel or even the best way to move out excess inventory. And the other part of that is a lot of companies have already discounted that inventory online.
Luke Peters: So, if buyers are looking at prices, they may be able to see that, and then it makes it even harder. And frankly from my point of view, if if I’m going to sell it at 50 cents on the dollar, I might as well hold onto it. I got a big warehouse, and I’ll try to find a way to sell it online even if it takes me longer because I don’t want to discount it that far. Maybe it is a bad decision on my part, but I’d love to hear your perspective because it seems like a lot of the excess inventory, like a lot of these discount buyers, are buying it for like pennies on the dollar where it doesn’t make a lot of sense if one knows how to sell it slowly online and offload it that way. But we’d love to hear your insights on that.
Chris Rebsamen: I’m more of the if you’re going to rip the bandaid, rip it off. It’s how long would it take you to sell online versus someone like TJ Maxx or Ross to back up a truck and take everything at once. So, really I’m a guy who that would… My strategy is always if you’re getting out of product or it doesn’t sell well, and you need to in the cash to invest in something else, you’re better off just selling it through one of the off price channels and moving on. I think the process with the online, you have to put marketing dollars into it. You have to sit on the product and remember this carrying costs with inventory and did you follow the money to pay for the inventory so there’s higher interest.
Chris Rebsamen: So, you need to know what is the best way to do this, and that’s another side of when people get shortsighted. It’s, “Okay. Well, I’ll sit on it, and I’ll sell it online, and I’ll sell it through my website.” How many hits are you getting a day? How many purchases? How many transactions are you really, really getting a day even at a discounted price? Are you moving a thousand a month versus TJX coming in and buying all 10,000 in one day? So, it all depends because to me from a financial perspective, I’ve seen selling an online. And a guess, so not an the online expert… would cost more in the end even with the higher margin and profit dollars.
Luke Peters: Yeah. No, you have excellent points there. And in finishing up that answer, you mentioned TJX and Ross. Any other names that listeners should be thinking about on the off channel? And just because this is always a constant problem with anybody.
Chris Rebsamen: Yep. We’ve got Tuesday Morning, Beall’s Outlet, Menards which is a home center. They buy stress products. Big Lots. So, there are plenty of them out there, and City Trends is one. Ross and TJ Maxx have two buying offices, one in L.A. and one in the East coast. TJ Maxx has a buying office in Canada as well. So, there are plenty of places if you need to move the merchandise and make it disappear. There are plenty of places that you can go to.
Luke Peters: Yep. Well, listen, I’ve learned a lot here, Chris. I’m taking notes. I’m reassessing my inventory storage right there. So, just want to thank you for diving deep into this. And before we leave, I just want to finish with this question. You shared a lot about your business and your expertise. What is maybe the most practical bit of advice that you can give a small mid-size company.
Chris Rebsamen: Do your homework.
Luke Peters: Yep. And then getting deeper into that, is that just say making slower decisions or?
Chris Rebsamen: Yeah. Reach out to… Interview some people that have industry knowledge and that can actually help you, guide you down the right path, but make sure that you interview, ask for references, making sure that there’s synergy between the both of you because that little investment up front can actually save you a ton of money on the backend.
Luke Peters: For sure. I’ve been there, done that, and can vouch for that. How can listeners find more about you, get a hold of you, find more about your business?
Chris Rebsamen: On my LinkedIn profile, Chris Rebsamen. We have a company page, Jupiter Sales and Marketing on LinkedIn, and we also have a website, jupitersalesandmarketing.com, all one word.
Luke Peters: Great. And we will have this in the show notes for you guys, listeners, at retailband.com. You’ll have the correct spelling of Chris’s name and the links and all those details in the show notes. So, listen, Chris, I want to thank you again for joining me today on the Page 1 Podcast sponsored by Retail Band. And quick reminder for everybody, yeah, that I’m offering a quick free evaluation of your online sales strategy. You can look at your Amazon, HD, Wayfair. We can review your product listings and present our findings directly to you. And if you’re interested, you can email me at firstname.lastname@example.org or find me on LinkedIn. Hope you all enjoyed the interview today. Truly appreciate your reviews on iTunes and hope you join us for the next interview. Thank you.
Speaker 1: Thanks for listening to the Page 1 Podcast with Luke Peters. If you like our show and want to know more, check out our other segments. Also, please help us out by leaving us a rating on iTunes. Want to learn more about rCommerce? Check out www.retailband.com to get more great tips and tricks on how to accelerate your eCommerce sales with the big box retailer.
Get your FREE evaluation of your online sales strategy
Episode References: http://www.jupitersalesandmarketing.com/
Contact Jeff Thiessen: email@example.com