How do you sell brand space?

[HealthyChart]

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Hi everyone,

I have a product that I designed, produced and market myself. My goal is to sell brand space on my product (or is the term “to badge the product”?) to a big retailer and have it distribute through their stores. My question is where do I begin? How does one set the value of branding space on a product?

I have trademarked the product, but there is still a chance that the big fish might eat the little fish. I have been trying to build up my brand and product recognition because of this. But at what stage can I safely approach the big fish? And what ammunition should I carry with me?

I’d appreciate some direction. Thank you.

[CarolP]

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Hi Mrs Minter,

I am not quite clear on what you are asking. Do you want to sell space on the physical packaging or something else. Can you be a little more specific without giving it away?

Cheers
Carol

[HealthyChart]

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Hi Carol,

I would like to sell space on my product to brand it to a big retailer. So for an example if I made a calendar and I wanted to brand the front of it to “Big Retailer’s Calendar” and get them to sell it in their stores, how do I go about estimating the value of that space on my calendar?

Obviously my product is not as generic as a calendar, but it’s the best example I can think of at the moment. There are similar products on the market, but nothing exactly the same. I’d like to have some facts and figures behind me, such as “It will cost you $1M to put your name on this because of ???” But that’s where I get lost… “because it’s a good idea”, “because it will make you look good to your customers”, “because X Retailer pays $1M to brand their calendar”?

Perhaps I need to take a basic marketing class?

MS Minter

[DavidM]

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Hi Ms Minter,

It sounds like you have developed a product idea that you would like to sell to a large retailer, so they can brand it with their own house brand. Is that correct? If this is the case we need to understand why you’re looking to take this course of action. Is it:

1. You think you could make a quick profit?
2. You don’t want to be responsible for the operation of the business?
3. You’ve heard it’s the best approach?

If I was a retailer I would want to see a set of results that would reduce my risk. After all, you don’t just stick your brand on any old thing that comes through the door. Are you able to show that your product will be successful?

If not, you may be in a better position to brand the product yourself and run it through other specialty stores or even through an online niche.

Cheers,
David

[HealthyChart]

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DavidM,

Yes, you are correct that I want to “house brand” my product. My reasons for this are basically all the things you listed. But mainly I thought it was a good approach to raise capital to continue the business. I would still need to operate the business – produce, package and distribute the product to the retailer.

My question was how do you calculate what the space is worth? Is it a percentage of the cost to produce a single unit? Is it a percentage of the revenue the retailer could expect to earn by a sale of a unit?

I suppose my question is really no different than calculating a general advertising rate? The value of the space given the amount of exposure it will give the advertiser.

Thank you for replying.

HealthyChart

[DavidM]

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Hi Healthy Chart,

I don’t think you’re really trying to find the value of advertising space as such, it’s more that you’re trying to find the value of your product solution. If a retailer feels you have a good product they will likely make you an offer. This won’t be reflective of the brand space they occupy but will instead be reflective of the total sales that the product is likely to generate with an included risk buffer (because, who knows if it will be a success or not).

If your product is unique and incorporates a patented idea you may have a chance. However the bigger the retailer you’re trying to snare, the longer and less likely it is to happen.

Again, without knowing your direct circumstance you have the best chance of success approaching a small or independent retailer first to gauge your products sales success. Once you generate good sales numbers you can try to catch the eye of a larger retailer with the view of ‘selling out’. This will likely see you lose control of the product/packaging.

David

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