So….you’re a (film producer) manufacturer, and you have a new (independent film) bottle of ketchup that you wish to sell. So you head of to your local (movie theatre) supermarket to see if they will (exhibit) retail your (film) product.
When you arrive you are told by the manager that you need to go through a distributor and that in order to do this, you must meet their minimum units to set up a deal. In the case of your ketchup you need to provide the distributor with 50,000 bottles to start off with, and that this will be based on a consignment arrangement, and that any marketing and shipping costs that the distributor take on will first be paid back with interest before they take their distribution fee. In addition to this they also tell you that they have a right to roll your product into a bunch of other new products that are being introduced to the retailer, and that you may in fact be lumped into a brand package.
This upsets you as tell the distributor that Heinz has been on the shelf for so long and that you have a better product and that you would rather sell your ketchup for 2 dollars less than Heinz to just get it out there, because right now you’re ego is getting in the way of your common sense and you think that your little start up ketchup company is and should dethrone a hundred year old icon.
In addition to this you forget the fact that, to get to market you had to raise a bunch of money from friends and family through your very boilerplate business plan that was based on other fluky but successful black swans of the condiment game, and that pretty soon those friends and family will be expecting their windfall from you….the fearless pioneer and new face of squashed tomatoes and sugar.
You start to sweat as you realize that don’t have the money to manufacture the product and that you have no way of borrowing the money as the bank won’t give you a loan unless it’s a factoring process of the receivable.
You go to bed that night and while you are sleeping…the ketchup fairy visits you in a dream and tells you that the way out of this is to not let your ego get in the way and that perhaps looking at a different marketing technique might help you reduce your risk, maintain your brand focus, and build a company the right way…over time!
With your ego in check you start a facebook page that allows people to order the product online and set a date on a bi weekly basis for the order cut off date. You also allow people on your website to become sales people and you arrange a commission structure through affiliate marketing to allow your fans to become your marketers and drive the growth of your brand by making a bit of money on the side.
You start to realize that this crowdfunding model is working and that you are now completely in control of your own product. Within a year you have sold 1 million units of your ketchup and then one day the phone rings….its the distributor….he wants to pay you for the right to put your ketchup on the shelf of retail stores in 6 countries. You realize that you are not even making a dent in the framework of Heinz and that you’re quite content with not using a distributor as your fans and followers really like how you’ve made them the distributor of your product and that you owe it them.
You realize the network you have is the greatest resource one could ever have and you decide to create a voting platform for your new mustard line and that all fans who vote on the design of the label will get a 50% discount on the first jar they buy and that they can earn again for selling the product based on their tasting notes of the new private label you are introducing. These presales more than pay for the manufacturing and shipping and the results that you get back online are astounding. The information from your polling is deep knowledge that any distributor, banker, retailer or advertiser would die for.
In the end….you are doing well as a result of the ketchup fairy entering your dream that night. He/She taught you that your audience is listening and that the future of manufacturing and distributing products is to remove elements that will encumber you creatively. You also realize that the big store is really not where it’s at and that fans of your product and that direct relationship is a far better experience in the end.