Imagine you are a change-the-world founder of a fast-growing CPG brand. You’ve been going great guns with your own DTC, and your Amazon numbers are pretty stellar.
Suddenly, a major big-box retailer, let’s imagine it’s Target, calls you up and says it wants to put you in 2,000 stores. At first, you’re elated. You’re going to be on the shelves of the second-largest physical retailer in the country. You’ve made it, right?
Not so fast. After the initial rush of excitement, doubt appears on the horizon. Do you have the manufacturing capacity to create as much product as would be needed? Can your supply chain handle the throughput? How are you going to promote your products to compete at a national level? You need budget for that.
While change-the-world start-ups are primed to say yes to every opportunity, sometimes it’s much smarter to say no. Because in business, saying no doesn’t mean saying no forever. According to negotiation coach Jim Camp, it can be a critical step in getting to a mutually beneficial solution. If you say yes before you’re ready, it’s likely that neither you nor the retailer will get what you want out of the partnership. If you say no, you may get a puzzled reply, but you’ll certainly get to explain the situation in a way that gets you to a better result.
So before taking up every new offer that comes along, make sure you have a few fundamentals right.
Understand your limitations. Whenever you enter a new channel, you need to be able to promote your brand and defend its market share—not to mention ensure that enough product gets on shelves. To do all that, you need to make sure that everything is ready for the next step. After all, the last thing you want to do is to step onto a larger stage and promptly flop.
Know the marketplace. Every different retail channel has its own quirks, requirements, and even language. Make sure you have people on your team who understand all of this and can help guide you to a successful debut.
Control what you can. Whenever you enter into a new relationship, you should double down on everything that has made you successful so far, and especially your quality, services, and everything else you can control for the customer. Nail all of your existing channels before moving on to a new one, as any shortcomings you already have will only be amplified as you expand your footprint.
Consider an experiment. If you’re faced with an offer that you’re not ready to take on, consider counteroffering on a smaller scale. If a new retail partner wants to place your products in 10,000 stores, say you’d like to start with 100 so that you can get everything right before expanding.
Above all, remember that it’s as much in your interest to say no as it’s in your potential retailer’s. No can be a great way to tell your potential partner that you understand your business better than they do, and you are not working to fix your limitations and adapt. Once you get everything in line, you’ll be ready for the big yes.