Questions

The product is moving from prototype to initial product run. The prototype debuted at NY Toy Fair, the feedback has been positive and interest overwhelming.

Hi, My expertise is in consumer products across developed and emerging markets, mostly with global brands.
If you don't already have a clear pricing and sales strategy for your product, then you need to create one. This becomes even more important if your product is likely to sell in a number of countries around the globe. And based on the response you have it could be large volumes too.
You need to make sure there is broad price alignment across geographies, i.e. any particular market does not have too low or too high a potential price. Exchange rates play an interesting part here. This is normally done by mapping consumer price across major markets and retailers, estimating retailer & distributor margins local taxes and freight costs. This will also help you understand and manage varying profitability across markets.
Some things to consider when negotiating with the Canadian distributor.
- What the end consumer price will be in Canada vs USA?
- What margins to retailers expect for a new product in Canada (will vary by brand strength)? This data will also help you understand the potential profit this distributor will make.
- Inventory holding levels (in weeks of stock). This will give you an idea of distributors working capital investment in your product.
- Payment terms, days to pay you etc.
- Product sales forecast: how far out ? 6 months 1 year ? What duration of the forecast is fixed ? 1 month, 3 months etc.
- Product Warranty - who covers damaged or faulty products? and how?
- Product launch marketing investment. Who bears the cost initially and how much? What will be the ongoing marketing support and who will fund? Distributor or you?
There are a number such decisions to align on.
I wish you all the best with the product and in case you need further guidance or counsel, do get in touch.


Answered 3 years ago

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