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Break Into the Gift Market
Gifts can be sold in any number of stores, card shops, flower shops, drug stores, cooking stores, airport shops, Christian gift stores and hospital gift shops. Gifts represent an enormous product category, with products covering the gamut from home made sewing items to high tech widgets and gadgets. Though the stores are many and often small, the gift market is an attractive market for new product developers because they are sold through a well-oiled, and fairly easy to penetrate distribution channel. An additional advantage the gift market has is that new products can be sold locally, at a relatively low cost until the new product developer knows the product will be a success.
The gift market distribution channel consists of gift shows, gift reps, gift marts and finally the store that sells the gifts. The distribution channel is expensive though and you need to be sure that you are able to sell your product at retail for about five times its manufacturing costs. The strategy most new product entrepreneurs follow is
1) attend a few gift shows,
2) attract the names of some reps with a presence in at least one gift mart and then
3) sell through the reps to the stores in his or her geographic area. Most people start in their local geographic area and then just keep expanding into new markets following the same introduction strategy.
Industry Magazines
As in any market, you need to start by getting copies of the trade magazines. They will have articles on distributors, distributor margins and the names of key trade shows and contacts that will help you determine your marketing strategy. They also typically have a yearly products directory that will help you understand what competition you are facing. The leading trade magazines for the gift market are: Giftware News, Gifts and Decorative Accessories, and Giftbeat.
Gift Shows
The gift industry has a large number of state wide and regional shows that you should attend, first if possible, as an attendee to see what the show is like, and second to meet sales reps. Most booths at these gift shows are run by sales representatives who carry a wide range of products. Almost all gift products from small manufacturers are sold through sales representatives (sales representatives that are independent business people and carry products from a number of manufacturers) and you need to start talking to them, hopefully finding one who will carry your line, or if that doesn't work out getting some insight into what they feel you might need to do to attract a sales representative to work on your product. Sales representatives will also help you set a realistic price, decide on the type of distribution discounts you need and determine the type of sales flyers you might want to prepare. You should also look for small entrepreneurs at the show who are trying to sell their products. They typically will tell you what they went through to get started in the industry and they will often provide you some start-up hints. At the end of this article there is a list of some of the more important gift shows that you can attend. When you approach the show they will usually resist letting you attend if you are not a buyer. You can ask for exception if you say you are in the process of starting a company that sells gifts and you want to see what the show is like. If that doesn't work, you can try to having a store that sells gifts in your area designate you as their representative to get into the show.
Gift Marts
Besides gift shows, the gift industry depends on gift marts to sell to retailers. Gift Marts have showrooms, typically run by independent sales representatives but sometimes run by companies, where store buyers can come and buy products. At the end of this section is a listing of most of the major gift marts. The showrooms are often open only by appointment, but the gift marts will offer special days, often once a quarter where all the showrooms will be open. If you are a buyer, or have a buyer's pass from a store that sells gifts you can see the showrooms and meet reps. But even if you can't get into the marts, they still can provide a valuable service in finding the names of representatives that you can approach to sell your product. To find the names of reps, start by going to the gift mart and go to a listing of the showrooms, many of whom will be representatives.
Using the list you can develop an extensive list of representatives that might be able to carry your product. You can also use this list to get a listing of representatives that might carry your product who don't have showrooms. If you click on the sales representatives web site you can find the names of the lines they handle. If you check the web sites of those manufactures somewhere between one out of five or 10 will provide a complete listing of all their representatives. You need reps to succeed in the gift industry and you should be able to generate a list of between 200 and 400 reps who could sell your product.
Action Plan
A strategy that typically works in the gift industry has just four steps.
1. Sell first directly to a few local gift shops. If you have to you can put the product in on consignment, which means the gift shop won't pay you until the product sells.
2. Run promotions to help drive sales through those retailers. Momentum is important to sell to reps, you want to be able to show not only that the product is being sold in stores but that the product is selling out and stores are reordering. A great display can often be the best way to promote sales. The Garlic Twist has been a "hot" product in the market primarily because the inventor did his ground work at local stores.
3. Attend a local gift show. Most of the gift marts will have certain days throughout the year where local manufacturers, including inventors, can set up a small booth to present their product to retailers. Be sure at these shows to have pictures of your product selling at the local retailers where you had sales success. Be prepared to offer goods on consignment or at a discount to get people started buying your product.
4. Once you have momentum including: a) success at certain retailers, that have already reordered; b) attendance at a trade show or gift mart display day; and c) orders from retailers attending the show; then you are prepared to start doing a campaign of sending out mailings, doing follow-up phone calls and, when needed, sending out a sample of your product to have sales reps start carrying your products.
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