Guide to Growth Through Tradeshows
We chatted with Amrit Richmond, founder of Supermercato and Indie CPG, on how to make tradeshows work for your brand overtime and how to assess your capital options once you get into that dream retailer.
What’s Inside this Guide?
- Accessing Your Working Capital Options
- How Goals Might Differ For Your 3-5th Tradeshow
- Knowing When to Say Yes or No to Retail Opportunities
- Setting Your Tradeshow Booth & Team Up for Success
- Clever Ways to Save Money
Accessing Your Working Capital Options
Before committing to a large new retailer, assess all of your capital options: will you leverage runway, debt, crowdfunding, or raise equity? Use your runway to fund purchase orders, especially if an existing retailer wants to buy a larger quantity of inventory than their last purchase order.
- Runway: Can you afford to reduce your runway to take a chance on this new retailer and not see the return on your inventory investment for 4-6 months?
- Debt: You can build long-term relationships with credit providers like Ampla to help grow your business in the long run. This can help you have enough runway for any purchase orders that come through without giving up equity.
- Crowdfunding: There are non-equity and equity-based crowdfunding opportunities, some of which require you to disclose your sales and product roadmap to raise on the platform. If you pursue this path, be prepared to leverage your network to rally around your campaign to get their help with contributing $100.00+ and marketing your crowdraise.
- Equity: The biggest con to equity financing is the loss of control. Your company is one pie, and equity financing means you must give up a piece. If you give up too many shares, this results in a loss of decision-making control. Remember that your investor partners could potentially replace you if you do not retain enough board seats or voting power. Some investors may put in the financing agreement that they will be entitled to any positive returns before retaining profits for themselves. This is very difficult for many new entrepreneurs. Finally, another disadvantage of equity financing is the time it takes to get the capital and find the right investor partners for this stage of your business.
Where could a brand’s goals differ when it’s their 3-5th tradeshow vs. their 1st?
- Meeting specific retailers vs. ANY retailer that will talk to you, and confirming some of your retail buyer meetings in advance of the show.
- Pre-selling or testing demand for new products at the show to hedge against risk. You can even feature unreleased products, flavors, or a packaging refresh at the show.
- Attracting & meeting with potential investors. See Ampla’s Fundraising Guide for more details.
- Staying top of mind with existing retailers, especially if you haven’t met them IRL yet
- Stand out when the stakes are higher. Maybe you have new competitors exhibiting?
- Serve your product the way it should be eaten, eg: with a condiment, on a salad
- My friend Paul Voge, co-founder of Aura Bora, shared his advice for brands planning to scale through their next tradeshow booth:
It’s the perfect time to showcase your innovation. We often have a flavor that we only made 100 cases of to see if we can sell an exclusive to our favorite retailer. You can also offer case discounts of core flavors if a retailer commits to a P/O at the show.
Have a list of the 8-10 retailers that you want and find the names and pictures of the buyers from these retailers if you can find one (so everyone on your team can be on the lookout).
Amrit’s note: Ask those buyers if they are going ahead of time, keep an eye on LinkedIn and ask in communities which retailers are going to be at the show as well. You can also look on the official show sites for logos of attending retailers.
Knowing When to Say Yes or No to Retail Opportunities
Of course at this stage in your business, you’re looking for clear ROI after a tradeshow, but it shouldn’t be at the expense of a significant portion of your runway, team, and other priorities your brand has already committed to. Consider that it might be easier for your team (and better economics) to grow with existing retailers into more shelf space (a.ka. facings), doors and regions, than to open distribution with new retailers. You can respectfully leave the conversation open to say yes in the future, but saying yes before you can fund the inventory within the retailer’s requested timeline, or before your team can execute the retail launch, is a big mistake.
Before you say yes to the largest P/O you’ve ever seen, consider: Margins (as some retailers will want you to reduce your normal price per unit for their unique shoppers), Runway, Your Ability to Create New Inventory (Think cost of goods, line time at your factories, working capital), Any Custom Requirements of the Store, Team Capacity & Priorities, Tradespend Requirements, Marketing Plan, Unique Customers of the Store, And Your Odds of Staying on the Shelf. Score all of these considerations on a spreadsheet with your team to decide if it’s worth your time and runway, or if you should wait until 6-12 months in the future before committing to the retailer.
Pricing for National and Big Box Stores
Your cost per unit will be lower but your volume will be higher, and the payback period might be longer than your existing local and regional stores. Consider making a more affordable SKU just for that store with a flavor that’s more approachable for everyday Americans, or only selling a smaller set of your products in larger retailers for more predictable revenue.
The Larger the Retailer & Door Count, The Larger the Tradespend
Understand what you’re actually paying for with the retailer’s marketing spend. Be cautious of buying into a retail test program without clear answers from them about their sales goals you need to meet/exceed for a full region or national rollout. Here are a few questions to ask your team and/or your potential new retailer to evaluate if their tradespend is worth the cost:
- Is this opportunity a test run, a regional placement, or a full national rollout from day one?
- What’s expected of you to succeed and stay on the shelf? Ask about units/store/week goals.
- What resources can the retailer provide to help you be successful in their store?
- This really varies depending on the size of the store, their team, tech innovation capabilities, and how interested they are to bring your brand into their store. If they reached out to you first, you might be offered more support to win on their shelf.
- What % of brands that test first make it through to dedicated shelf space?
- Consider speaking to a few brands who are already on shelf there, as well as brands that did not make it past a shelf test. And then once you’re on shelf, partner with other brands in your aisle or in the same store that play well with your products.
- How much do you really have to spend before you see any ROI? Add up all the costs of slotting fees, demos, coupons, buying store analytics, and any custom packaging or flavors you create just for their store.
Setting Your Tradeshow Booth & Team Up for Success
- Give people something to talk about (and wait in line to eat!). What can you prepare that would make people talk and want to stop by -- either because the samples are delicious or it’s a booth you can’t miss?
- Your tradeshow backdrop is also a billboard -- it should get people to stop then tell them what your product IS and who your customer is so buyers can remember your product.
- The back of the booth should be readable from far away and your team standing in front of it shouldn’t block key information on the signage.
- Have someone at the booth to take random meetings so the founder can focus on big meetings.
- When building a remote team, have a person on the ground that doesn’t have to fly to tradeshows in LA, New York, Philly, etc.
- Consider turning your tradeshow trips into team offsites for everyone to meet each other.
Clever Ways to Save Money Before & After the Show
- Have a reusable, foldable backdrop that you use for other tradeshows and pop-ups.
- Collaborate with other brands at your booth or theirs to maximize exposure. In 2017, Sir Kensington’s ketchup and Beyond Meat teamed up on a burger sample that had a line around their aisle at Expo West. Olipop hosts happy hours with other brands to bring together the teams, buyers, and friends of all the participating brands. Other perfect pairings are olive oil and products that require a skillet to cook samples, ice cream and toppings, chips and dips, pizza and vegan cheeses, etc.
- Visualize other brands that might be in the same basket with you to inspire retail buyers. Buyers want to know their customers will want your product (they are in the business of sales, after all) without too many competitive products in the same aisle to avoid confusing their shoppers.
- Reserve flights and hotels in advance & leverage credit card points. Once you’re confirmed to exhibit, book the # of hotel rooms or Airbnb houses your team needs as far in advance as possible. If you have an extra room or two, consider selling them to a friend’s brand who needs a last minute place to stay. If you are undecided about exhibiting, consider booking Pay at the Property rooms, then pay ahead of time to save money once your team decides to participate in the show. Also, check if you have enough credit card points for affordable flights and hotels. You can also find discounted rooms through the official tradeshow site after registering.