Know-How Exchange : Strategy

Hardware chains go through distributors, so you have to sell to those first at a sub-wholesale price. Many times you are also required to attend the distributor's trade/buying shows. Very expensive.

If you have someone already approved as a vendor with hardware distributors, that will help. The NMOA.org has a free white paper on this. Covers a lot of ground concerning what you are looking to do.

Most retailers look for 'keystone' mark up or better. That means 100% mark up. Wholesale $20. Retail would be $40

Feel free to contact me directly if you need additional help.

To clarify, big boxes like Lowe's etc are not buying groups. They purchase outright and resell.

They tend to be reactionary, meaning they'll take on products with already proven markets and offer at discounted rates.

Others have told you about keystoning. But it goes further. These stores evaluate sales per SF. This means, they look at how much sales they get per SF floor space. So even if your product is keystoned, if it drags down a store SF sales, or isn't seen as something that will produce that SF target, they won't take it. If they do, they may want a guarantee from you, a penalty for lost sales if it doesn't happen, plus buy back of inventory.

These big retailers do not buy thru distributors, in fact they see distributors as a redundancy in markup. They can and will buy direct. They have a guy offshore that can also take your product and knock it off and send them a prototype in less than 48 hours. (I've worked for a factory that did it-- 48 hours no exaggeration).

First, Monmark's suggestion is pure brilliance. Find someone to take your idea, with an established client base and let them bring to market. He's is totally on track when he says it's all about price point. A store who's core market is $100 toilets isn't going to be able to sell $150 toilet seats The chance of knock off is there. I work with an innovative company doing a bamboo wrapped leather toilet seat (not their only product) and they are paranoid about it. I might add they only added this item to create excitement. They get lots of placement in magazines (free) for it. They don't care if they sell one. People go to their suppliers and get excited -- and buy plenty of the products they make money at.

My advice, know your competition in this market inside and out. And market to the bath designers first, if you are sure you are creating a better mousetrap. Follow Monmark's advice about private labeling. I'm not sure if Koehler is in the biz of tiolet seats, but Monmark is rarely wrong. At any rate, create a proven need and decide if this is ready for mass marketing.

Dear Peter,

Why not sell directly to consumers?

Although competition in this niche is high, the market is ripe for the supplier of a newer, better kind of product to appear. Why not make that product your client's?

You could sell directly either by offering your line through Amazon, or by establishing your own presence online. The domain name HeatedToiletSeatsDirect.com is available, there are 5,400 broad searches for this term on Google every month, and in order to take over the first page of Google, all you'd need is a Wordpress-based site, two or three social media channels, and related niche links.

HeatedToiletSeatStore.com is also available.

I hope this helps. Good luck.

Gary Bloomer
Princeton, NJ, USA

Just had another thought this am. There are performance based manufacturer reps who have established contacts in this industry. Spend some time talking to them, send them samples, and they'll tell you in a short conversation the potential of the product, the market and where to go with it.

I have a client currently selling to Lowe's, THD, et al. and he always mentions that the returns policy is dictated by the retailer, and it places all the burden (and cost) on the supplier. Be ready for that one.

And he is also keenly aware that they expect most-favored-nation pricing and solid marketing support -- promotions, discounts, display samples, etc.

He says he makes very little profit on those big accounts, but that the volume is tremendous.

I've done a few projects in the hardware/bathroom fixtures category -- and others that involved Lowe's, THD, Menard's, et al. -- and I know that it's a very tough market to enter if you're not already established there. The retailers really control the distribution with an iron fist; they are masters at it.

You probably need to talk with someone who has been where you're thinking of going. If you want an introduction to my client, I'll be glad to connect the two of you. He's a good guy who has lots of dents in his helmet from the bath accessories category and the big box stores.

I know you're asking about the US, but perhaps another option is to investigate selling into other countries. Heated toilet seats aren't as popular in the US as in other cultures.