Small Businesses Use Offbeat Ways To Sell Products
NEW YORK (AP) -- In the battle to win shoppers' dollars, small companies are finding creative ways to be where the sales are.
GSC Products sells nasal spray in a hardware store to capture sales from people working on projects that stir up dust. Simplicity Sofas pays previous customers to let potential buyers come into their homes to see sofas that can only be purchased online.
Small businesses don't often have the advertising and marketing budgets that larger companies do. That can put them at a disadvantage when they're trying to compete against bigger brands. And fighting for the limited amount of space available on store shelves can be tough and costly. So innovative owners are finding a way around these challenges by placing their products where their target customers go and by using nontraditional sales techniques.
"There is a lot of competition and it's difficult to break through the clutter and the noise," says Ted Hurlbut, a retail consultant who works with small companies. "You need to be creative."
A look at what some small businesses are doing:
BUILDING THE CUSTOMER BASE
COMPANY: GSC Products, Scotia, N.Y.
PRODUCT: Sinus Plumber, nasal spray containing pepper and horseradish.
OFFBEAT SALES CHANNEL: Hardware and automotive stores and garden centers. Owner Wayne Perry sells the nasal spray in nearly 1,000 stores that stock it near the cashier, where many customers find products that are called impulse buys. He would have to pay more to get his products in the most visible spots on the cold and allergy remedy shelves in drug and health food store chains.
HOW DID THAT HAPPEN? Hardware store owners were reading about Sinus Plumber in news stories and contacted Perry. GSC began shipping to them.
"They were outselling all of the health food stores we were in. A couple of cases a month, really unheard of for a single store," Perry says.
It turns out that those retailers are a logical place to sell nasal spray. People who use paint and chemicals and stir up dust trigger allergies and irritate their sinuses, Perry says. Some hardware retailers also own automotive stores and added Sinus Plumber to those shops.
NOTHING TO SNEEZE AT: Of GSC's $350,000 in revenue last year, $90,000 came from hardware and automotive stores. They sell 40 percent more Sinus Plumber than traditional stores.
COMPANY: Simplicity Sofas, High Point, N.C.
PRODUCTS: Furniture including sofas and chairs.
OFFBEAT SALES CHANNEL: Customers' homes. Simplicity's furniture is sold only over the Internet. Some customers want to see and try out the sofas and chairs. So owner Jeff Frank contacts people who have already bought his furniture, and asks them if they'll let a prospective customer take a look. Most people say yes. In return, Frank sends them a $50 check.
WHERE DID THEY GET THE IDEA? From customers. Several called Frank and volunteered. He decided to ask others.
SEEING IS BUYING: About 10 percent of prospective customers ask to see the furniture, and 10 percent of Simplicity's sales come from in-person encounters. The strategy spurs word-of-mouth buzz. Happy customers tell other people about the process. That has led to more sales.
Jim Hamren, who recently tried out a Simplicity sofa in a customer's home, says it was a little strange to shop in someone's house. But it was better than going to a store, because he and his wife could see how owner Rebecca Gwynne had moved her sofa past a tight space.
"She had to go up a narrow staircase. When we saw that, we said, 'if you can do this, we can certainly get it into ours,'" Hamren says.
After seeing the sofa and sitting on it, he and his wife decided to buy one. They say they'll volunteer to have customers view their new furniture.
SMOKING OUT CUSTOMERS
COMPANY: Evolve Professional, Westbury, N.Y.
PRODUCTS: Men's shaving and personal care products.
OFFBEAT SALES CHANNEL: Upscale cigar stores and lounges. Owner Daniel Marrone has held demonstrations at more than 125 stores over the last two years to introduce men to his razors, brushes and shaving cream. He recruits barbers who shave customers and explain the art of good grooming. Marrone sells his products at the events, and some stores agree to stock them.
WHY A CIGAR STORE? Marrone, who worked for consumer products companies for more than 30 years, saw an opportunity in the market for upscale men's grooming products. To sell them, he had to be where prospective customers go, because men generally don't go into stores to shop for upscale grooming products. So he began searching for stores where a man might spend $50 on a cigar. He checks out a store by buying a cigar, smoking it there and studying the customers to see if they're part of his target market: successful men age 40 to 60 with expensive taste and who want to look good. Marrone has held most of his events in stores in New York, New Jersey, Connecticut and Pennsylvania.
Trying to get his products in a big department store like Macy's or Nordstrom, where he'd have to compete against many other consumer products companies, wouldn't help him build his brand, Marrone says.
"I go under the radar to create a buzz and word-of-mouth advertising," he says.
WHAT'S NEXT? Marrone is scouting for more cigar stores and negotiating with an upscale men's clothing store on Long Island. His new website is starting to show results. Marrone says his sales in January surpassed his expectations for the entire first quarter.
CASHING IN ON CRUISES
COMPANY: Reverie, Bloomfield Hills, Mich.
OFFBEAT SALES CHANNELS: Owner Martin Rawls-Meehan always wanted to get his beds in places where people could try them for several nights, not just for a few minutes in a store. After meeting representatives of Celebrity Cruise Line at a trade show, he pitched putting his products on their ships. Reverie beds are now in six Celebrity ships, with signs in each cabin identifying the beds. They include models whose tops and bottoms can be raised or lowered and that have adjustable levels of firmness.
Rawls-Meehan also looks for sales opportunities with some connection to home, so Reverie also sells beds at home and garden expos. And he wants to reach customers who care about their health and fitness and want a good night's sleep. So he got a deal with the fitness company CrossFit Inc. to sell beds at competitions it holds.
"These alternative channels (aren't) being served by some of the larger brands," Rawls-Meehan says.
THERE'S MORE: Rawls-Meehan sold beds at temporary shops inside five Costco stores last year, and expects to have 30 temporary shops in the chain this year.
SUCCESS HE CAN SLEEP ON: Reverie got 5 percent to 10 percent of its sales from nontraditional sales channels in 2013, and Rawls-Meehan expects that to double this year.