You just launched your new product. It’s your first one in the category, but it’s a great item and your marketing efforts are generating buzz. What’s more, you have major retailers, including big box stores, that want to stock it. It’s an exciting time, but building a retail supply chain for new products is not without challenges.
Building a retail supply chain for new products: what it takes.
Taking an idea and turning it into something tangible is no small effort. But now that there is demand, it’s time to focus on delivering supply in a way that creates lasting, valuable business relationships with retailers.
Here’s a quick look at just some elements in the supply chain that need to be in place when you launch a new product:
- A manufacturer that can scale as demand increases
- Adequate inventory to meet initial demand
- A Third-Party Logistics provider (3PL)
- EDI software
Don’t let manufacturing be a weak link in your supply chain.
Even a great product with clear advantages over category competitors won’t succeed if initial demand cannot be met. In fact, a sudden spike in interest from retailers can put all kinds of stress on your company infrastructure and can even push you towards a crisis.
When a company is small, independent, or just entering the fray with a new product, the potential of high demand means that solutions should be in place in advance. If your company will be outsourcing production, ensure that the manufacturer or manufacturers you use won’t be overwhelmed when Walmart suddenly wants to stock your item in 500 of its stores. (Hey, we can all dream, right?)
Even if you’re not carried by every major retailer right from the start, you need a plan for manufacturing if you find yourself inundated with orders. Can your manufacturer ramp up production quickly? Do you need more than one manufacturer so you can scale as demand increases? Does it make sense to have manufacturers in different geographic locations?
Product failures aren’t always due to lack of interest. Sometimes they occur because there is more interest and sales than a company can manage. For independent inventors and small product-development companies, this is a serious consideration. Scaling up can be a complex process.
You need to be prepared for growth scenarios so you can protect the integrity of your brand. Manufacturing glitches create myriad problems, and damage vital business relationships.
Bottom line: plan for tomorrow so you’re not caught off guard when high volume hits.
Find the right 3PL provider.
Ask any veteran of new product launches and they will tell you the importance of securing the services of the right Third-Party Logistics (3PL) provider.
When you first introduce your product, there’s a good chance your warehouse will be your dining room. With any kind of success that situation soon becomes untenable, but it also doesn’t make any sense to establish your own fulfillment center when you have only one, or a limited number, of products.
Fact is, even established companies turn to 3PL providers to warehouse inventory, pack products for shipment, and fulfill orders. When you have a nascent brand, a 3PL provider you trust is vital. Communications need to be error-free, and the order fulfillment process as close to flawless as possible.
Your 3PL provider should also ensure that your inventory counts are accurate and up-to-date. Retail trading partners, especially major big box stores, want plenty of warning if your stock is low, and will expect you to be able to quickly tell them when they can expect it to be replenished.
With the rise of direct-to-consumer shipping, retailers will list your products on their site without holding any inventory. That means it’s up to you, the supplier, to ensure that you can deliver what their customers buy, because the retailer is showing your products on their website.
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