We just got back from the International Housewares show in Chicago, which took place March 7th – 10th. The International Housewares show is the largest of its niche in the country and takes up the entire McCormick Place in downtown Chicago. To give you an idea, we went to the show all 4 days and still didn't see everything. It's simply an overwhelming number of vendors and floor space to cover. After a successful show last year, to find products for CuttingBoard.com's launch, we were really looking forward to this year. I'm going to share my thoughts of things to think about and how to prepare for conventions like these below…
If you're an eCommerce store, then you need products to sell (thank you Captain Obvious) and there isn't a better place to find product than a convention that is specific to your niche. To this point I haven't found a niche that doesn't have a conference, so that is never a good excuse. I find that asking current suppliers (if you have any) is the best way to discover your industry's most important trade show(s). If you are just getting started, a quick Google search will most likely turn up some options for you.
For Treadmill.com it was the IHRSA show. For CuttingBoard.com the biggest convention happens to be the International Housewares show. It's a convention that we went to last year, where we had great success finding the vendors to launch CuttingBoard.com with. So, this year we went back to find more vendors for CuttingBoard.com; we also went to discover initial vendors for Coffee.net and JuiceIt.com, which we plan on launching later this year.
Why These Conventions Are Important
If you are just getting started, or are operating on a thin budget, then you might be asking yourself “Do I really need to spend thousands of dollars to goto an industry convention?” Quite simply the answer is – YES!
If you are serious about running an eCommerce site, not only do you need to find products to sell, but you also need to develop personal relationships with your vendors. It's much more economical to make one trip a year, to visit all your vendors in one place, rather than travel across the county to meet each of them.
You would be shocked at how much further you can get with vendors after you establish personal relationships. The fact is that it's harder to say no to someone in person. More importantly, it will be much harder to say no in the future – once they have made that personal connection. It's even harder when they know they will see you again.
It's also much easier for someone to develop an opinion of you in person (hopefully a positive one) than via an email or phone call. So, if you are looking to establish a new relationship or simply looking to get better pricing, it's much easier to accomplish that in person.
Not only are personal relationships important, but so is finding product to sell. I don't care how many Google searches you do, you will never find the best vendors that way. Sure, Googling something like “cutting board manufacture” or “cutting board suppliers” will turn up great results – for the big boys. However, the smaller niche vendors are much harder to find this way. Several of the small companies we work with barely have a website, so unless you type in “XYZ cutting board manufacture in ABC City” into Google, you will never find them.
Having a relationship with the “big boys” in your industry is important. You want to be able to sell the most well known brands in order to add some legitimacy to your site. That said, come with your checkbook, because a $1,000 order with the big boys will barely register; that is, if they will even talk to you to. On the flip side, a smaller vendor they will bend over backwards for you if you tell them you want to place a $1,000 order.
So, the bottom line is conventions like these are extremely important to establish new relationships, strengthen existing relationships, and find new products to sell.
Things To Think About…
I want to cover some things to think about ahead of these conventions and also how to approach things while you are there. These thoughts / ideas are in no particular order.
Have An Existing Website
Please don't waste your time going to one of these conventions if you don't have an existing website. Nothing makes vendor's eyes roll back in their heads quicker than hearing “I plan on launching XYZ website later this year”. They hear stuff like this all the time; the reality is that over 90% of them never get the project off the ground. Of the remaining 10%, over half of them never place a second order and they vanish into obscurity.
When we first went to IHRSA, we already had treadmill.com up and running for several months. We brought an iPad with us and showed vendors the website in their booth. This way we could show them how we were different and try to convince them why they should work with us. Things such as doing all original photography, writing our own descriptions, and taking product video really went a long way.
When we went to the Housewares show last year we had a template of cuttingboard.com ready to go. While it wasn't the ideal situation, we were able to point to the success of treadmill.com and that went a long way. By showing them what we had been doing with treadmill.com it opened doors that would have otherwise been shut in our face.
This year we were able to point to Treadmill.com, CuttingBoard.com, and IceWraps.com to to start the conversation for Coffee.net and JuiceIt.com.
How Are You Different?
This is going to sound cheesy, but after reading this section, I want you to close your eyes and really think about this for a second. This isn't something to read and just move on – really think about it.
What I want you to do is put yourself in the shoes of the manufacture. They have a product to sell and that is their number one goal. However, in order to sell said product(s), they need to count on hundreds, if not thousands of retailers to accomplish that mission. Some of these resellers might buy $1,000 a year in product, while others might buy millions.
In addition to achieving their goal of selling more product, they have to concurrently deal with another issue… keeping all their resellers happy. Other resellers don't want more competition, and other resellers certainly don't want to compete against MAP pricing violators.
The general consensus of big box / brick and mortar stores is that eCommerce sites have an unfair advantage. They run at higher margins since they don't have to pay as high of rent. They have an advantage because they don't have to pay sales tax. They have an advantage because someone can order from their sofa. All this is true of course, but what B&M stores don't think about is the shipping costs to get the item to the customer, the PPC budgets, and the employees it takes to pick / pack. The bottom line is that none of this matters, because perception is king. Their perception is what it is and you will never be able to change that. More importantly, they also have much deeper pockets than you ever will.
So, why is all this important?
It's important because they have the ear of the manufacture. They are the first ones to complain when someone breaks MAP or other rules. They can say things like “If you don't stop so and so from doing whatever, then we are pulling our business from you.”
Back to putting yourself in the manufacture's shoes again. They have been burned so many times by rogue eCommerce sites that they have really had enough. They most likely already work with countless other eCommerce retailers and don't need you – unless you can move the needle.
What I mean is that most eCommerce sites are just bottom feeders. They put up manufacture photos, use canned descriptions, and then start selling. After getting up one of these bare bones websites, they launch Google Shopping ads, product comparison ads, feeds, discount coupons or PPC ads. They might also break MAP or do other screwy things to gain an unfair advantage. So, how does this add value for the manufacture? It doesn't. How many additional sales does it make for them? NONE. These types of eCommerce sites are just making sales that would have happened otherwise and add absolutely zero net value for the manufacture. Let me repeat that. By running a site like this you are doing nothing more than poaching customers that would have bought that product anyway, thereby creating zero value for the manufacture or the eCommerce ecosystem.
Grant says: “This is so true. I can't tell you how many times the topic of Amazon Sellers came up and how much manufacturers hated Amazon third-party sellers. Supply chain leaks always seem to end up on Amazon and cause chaos in the pricing sphere, as Amazon is the largest marketplace out there with the most visibility. When a manufacturer has 10 resellers that are playing nicely, everyone is able to get a piece of the pie. But when one bad actor shows up and undercuts everyone to get a bigger slice, it suddenly turns into arms race. For this reason, you need a game plan ahead of time that explains how you can build your OWN channel vs hijacking someone elses.”
So, now is when I want you to close your eyes and think about this. Put yourself in the shoes of the manufacture. Now, think to yourself “Would I want to add this eCommerce store as a reseller?” Be honest with yourself…
I think way too many people just focus on themselves, how they can make money, and how they can better their lives. See that problem with that? I, I, I, I, me, me, me, me. The point is, you better darn well have a value proposition to offer them. Even better, put the manufacture and your partners best interest first – the rest will come naturally.
For what it's worth, here is my 30 second elevator pitch when I walk into a manufacture's booth:
“Hi, my name is Michael Jackness and I'm with a company called Terran. We run several eCommerce sites such as Treadmill.com, CuttingBoard.com, IceWraps.com, etc. I know you might be apprehensive about working with eCommerce sites, but we are different than the typical company. We take all our own product photos, write our own product descriptions, and take product video to educate the customer. We have full time employees that handle phone and email support and intimately familiarize ourselves with the products we sell. We get customers through organic search and can increase exposure for your company by being on our site. For instance, we rank #6 for “cutting board” and #2 for “bamboo cutting board”. Having your products in front of this audience can add tremendous value for your company. We warehouse and ship all our own inventory, so we aren't looking for a drop shipper. Finally, we can provide you with countless trade references who will verify that we never break MAP or other polices. We work hard to be a great partner to work with.”
Suggestions For Drop Shippers
I've talked about this before and I'm not very fond of drop shipping. However, I understand the value and allure of this hands off approach. If you do happen to run a drop ship company, here is my suggestion for you:
Walk into the booth of the manufacture you are interested in selling and ask for the person in charge of bringing on new eCommerce accounts. I find that most medium to large companies these days have one person responsible for this and typically they are the sole decision maker.
Take a few seconds to introduce yourself and the website you own. Then, just flat out ask “Do you have a drop shipping program?” In my opinion, there is no reason to beat around the bush and here's why. The reality is either they have a drop shipping program, or they don't. If they don't, there is no chance you are going to be the one who convinces them to create one. If that is the case, you can save everyone a lot of heartache and just say “Thanks very much for your time” and move on. If they do have a drop shipping program, then you're in luck. Most companies that have taken the time to create such a program will accept almost any eCommerce site into the program.
By taking a quick shotgun approach like this you can visit many more manufactures in less time. This will make your experience at the convention much more fruitful.
Show An Interest In The Product
If you find a manufacture that seems willing to work with you, try showing a genuine interest in the products. Let them take a few minutes to show you their line and ask what their top selling products are. The more interested in the product you are, the more likely they are going to want to work with you. It also helps develop a good relationship with the manufacture.
Don't Just Jump Right Into Pricing
I know it might seem tempting to jump right into the most important question: “How much can I buy this for?” However, you don't want to seem over eager. I find that simply taking their business card and catalog, then following up after the show is a much better route. Typically, people who are looking to do shady things care about one thing: price. Don't come off as that guy.
The reality is that most manufactures don't have pricing at the show anyway. This is especially true for the larger manufactures. One thing I do like to ask however is “Do you have any show specials?” It's a good way to ease into the pricing discussion and a great way to take advantage of specials if they have them. I find that about 25% of the people who exhibit will offer specials for the show.
Don't Scare Them With Big Orders
One thing that really seems to scare vendors is talk of big initial orders. If you are planning to go from “0 to pallet” that raises all sorts of red flags. This is something I learned along the way, because with research I know some of the products I want to buy. I do research before the show and know they will do well. However, one of the shady things rouge sellers do is just buy a lot of inventory from the get go. Then, they proceed to break all the rules. They know they will never be able to order again, but they don't care. It's just a hit and run. So, I've learned to take my time and just order 2-3 of each SKU to start with. This way I can show them the product on the website and build confidence for our next order.
Hopefully you found this list helpful and it will prepare you for your first, or next trade show. I can't stress how important I think these shows are for the continued success of your business. If you do one thing this year, to help grow your business, this should be it. People discount relationships all too often and there is no time like the present to get started.
I'll leave you with a few pictures we took of the convention hall…
Great article! I’m reading through a lot of your old stuff and finding it really valuable. I went to your site after hearing you on on Sellercast. Great interview too.
Thanks very much Ivy. It’s good to have you hanging out here at EcomCrew. I’m glad you found the information on Sellercast and EcomCrew valuable! That means a lot to us.