Now I have read so many posts on these forums,the ones that mostly caught my attention were ones about publishing companies.I mean everybody says you need an account to put products on the shelves of retail stores like walmart, ebgames etc. Now what I wanted to know how to does a new small publisher goes around getting those accounts if they do have the funding needed to do that? if anyone has any experience about this subject some info would be great. Thank you

I would guess that you might need some titles ready to go, and a lot of money (They probably will wnat an investment from you to set up an account, they won''t promote your product at their cost, and will certainly want some garuantee of return on their shelf space). In fact, there may even be ''exclusive'' deals in some companies.

I''d think that the internet, or local companies would be a good distribution channel initially, but this is all guesswork.

Bp.

You first need to establish what are the costs to the retailers to put a product on the shelves and what are the usual terms so to get a benchmark. Benchmarking is key for you here. Companies like Microsoft, EA and Ubisoft have premium access so don't use them in your calculations. Lego would probably be a good comparable as they have a limited shelf slot and a small product catalog.

In general, retailers like guaranteed sales, fast inventory turnaround, good margins, no returns (if all else fails, an easy return policy), good promotional support (like free banners that actually fits on their shelves, and a good 'slotting fee' budget for both shelf and flyer space), easy stocking (products already have _their_ SKU stickers and anti-theft labels already on, low inventory on-demand replenishment), and *no* promotional rebates that they would have to handle themselves (mail-in rebates are excellent as it keeps their margins).

Walmart/CompuUSA/Futureshop/... will negotiate hefty terms so it would be better to get into a business association with another supplier such as a toy manufacturer even if it dilutes your brand. Besides, those retailers don't like to deal with millions of small suppliers; they'd rather deal with a smaller number of suppliers and cut larger deals even it this means a wider SKU line to manage. Inventory turnaround is key for them.

Smaller specialty retailers will go for wide SKU even if it means dealing with lots of suppliers. Inventory turnaround is less important compared to a wide choice and exclusivity. Some will even ask for a 'sell sheet' to expose the selling points of your product to their staff. Expect a higher margin deal for that and less control over the ultimate price; on that note, you will want to negotiate a contract clause that would prevent them from using your product as a 'loss leader' (there's nothing more destructive to a brand).

-cb

PS: For reference, here are some numbers about SplinterCell in Canada:

Marketing budget: ~CDN$2M
Marketing intensity: 305 GRPs from 25Nov02 for 4 wks; TV, banners, PR.
Sales: ~4M worldwide, Xbox: 1.2M USA 600k EU, PS2: 700k USA 800k EU, PC: 200k USA 425k EU.

[edited by - cbenoi1 on September 5, 2003 10:13:20 AM]

Yes, I understand all that but what if they have all this money and funding needed how do they get it on the shelves.do they hire a PR/Marketing or Business Managment Company?

> do they hire a PR/Marketing or Business Managment Company?

Honestly, that''s the one part of the business I''ve not been intimately involved with. I base my observations here from a family member who got a distribution deal with both Walmart and a leading department store chain for a small board game catalog. I imagine the process is roughly the same for a game title.

The seller needs someone with authority to sign distribution agreements. VP Sales or Business Development Manager is the usual, and the owner if it''s a small shop. That person contacts the Purchasing dept of the store chain and gets all the forms that need to be filled; it describes the product, dimensions, shipping info, credentials (ISO, CSA, ...), etc and you will leave them a sample of the product. It''s a long process with tons of red-tape. If you meet their criteria, you''ll get a phone call for a meeting with a purchasing agent 2-3 weeks later and you''ll discuss logistics, packaging, account management and banking terms, and you will have to make a demo of your product. You rarely negotiate margins and marketing budgets at this stage; it could happen, but it is usually left to someone higher in the hierarchy. Walmart has 2 steps, but a country-wide distribution chain could be different. I''ve been told you almost always get a ''no'' on the first contact, simply because they have something like it already or there is something missing in the forms. Either way, perseverance and salesmanship are key and a good BD/Sales manager will get through whatever hurdle is coming along during the iterations.

-cb