Exit Strategy

 

 

 

 

Your Experience
Your Solution
10,000 units were unexpectedly returned causing my business to go bankrupt! What do I do now?
You can avoid this scenario by having an exit strategy.

You must prepare your business for the anticipation risk of large quantities of products to be returned. The returned products can be used to create new sales channels and partnerships, turning this somewhat hopeless situation into a profitable one.
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Your survival is at risk

The survival of your co mpany could be at risk by avoiding an exit strategy.

A Retail store that can’t sell 10,000 units must drastically lower your retail price causing the market on your product to possibly be destroyed. By allowing a retail chain store to return merchandise you keep control of the market price. You can then sell products through other sales channels at a guaranteed price.

The optimal situation and a good entry sales point for retail is being able to return unsold products.

Where to sell your returned products

The brilliance of this plan is that you will create a market in which to sell unsold products. For example:

  • Sell products as refurbished

  • Change products to OEM products

  • Compose a list of people in the Computer Production industry that can utilize their products with yours.

 

  • Establish contacts with companies in other countries using the unsold products as an entryway into their markets.

  • Give new retail chains an introductory rate using these products.

  • Internet auctions.

  • Promotional give away through your own site, magazine, retail store.

  • Use employee newsletters in selected large corporations.

  • A retail store owner can sell returned products by lowering the consumer price without suffering a great loss.

Make that exit plan

I predict that some buyers might try to put pressure on you to accept a lower price by threatening to return a major portion of your products. You must be prepared with an exit plan to keep yourself in a position to better negotiate.


Jens Welling
 

The author of this article Jens Welling has worked with retail purchase, retail sales and retail marketing over the last 15+ years. Jens Welling has written a number of articles as a good source for any new and established company who want success with retail sales. Below are short descriptions and links to other articles.

Why You Have To Do Your Homework
Selling through retail is one of the toughest sales channels there is. Reactions come instantly. There is no mercy for mistakes in retail sales. One word covers what you need: Preparation. ...Read more

Choosing Sales And Distribution Channels
Make the right choices from the very beginning. Group the sales channels and start with the companies that fit your size and that do not compete head-on with each other. Use the distribution channels actively to get contacts inside the sales channels....Read more

Category Management
Learn to understand and use Category Management to your advantage and earn money....Read more

Unique Selling Points (USP)
Take the time to find out exactly WHOM your consumers are. You need to find your Unique Selling Points (USP). Once you get to know them, you'll know what to say to them!...Read more

Price Strategy
Right from the beginning, you have to be aware that On-line stores will “dump” your prices if you are not in control. Base your price strategy on your long-term goals: Where you want to sell the most products....Read more

What The Buyer Wants To Know
The buyer does NOT want a lot of information. He/she is living in a very high-paced environment and only wants your information in brief bullet points. Follow some simple rules and you will give the buyer what he needs....Read more

Exit Strategy
You must prepare your business for the anticipation risk of large quantities of products to be returned. You need an exit strategy. The returned products can be used to create new sales channels and partnerships, turning this somewhat hopeless situation into a profitable one....Read more

Price Setting
Consumers have psychologically priced a product with a certain amount that they are willing to pay (price point). If you exceed their psychological value, you risk failing in retail....Read more

Negotiation Tactics
It is obvious to focus on price as a sales factor. However, help yourself by prepare for negotiation tactics by highlighting the other Unique Selling Points (USP) - and at a minimum explain the price per performance compared to competitors....Read more

Rejection From Buyer
The buyer can reject you for several reasons. You must talk to the buyer to find out exactly WHY you got rejected.....Read more

Marketing Strategy
Selling to a retail chain often means you have to advertise in their catalogues, newspaper ads, etc.
This alone does not create a brand; you must also supplement the retail advertising with your own marketing strategy....Read more

Education Management
Your energy must focus on the stores (retail training). Face-to-face education is the most effective but also the most time-consuming and expensive....Read more

Warranties
What retail warranties are you ready for? Depending on your sales channels, you must consider the quantity of products that may be returned...Read more

Building A Brand
You must raise the consumers' awareness and perceived value of your product through brand development.
Once you do this, consumers can and will identify your product as a brand....Read more

Logistics
A high tech vendor will eventually have late delivery of products regardless of penalties. So what should a vendor do when the logistics fail?...Read more

Keeping Your Store Sales Alive
Keeping your retail store sales alive is a never-ending process....Read more

Product Development
One of the advantages to having a relationship with the sales channels is that you can discuss future product development....Read more