As a former corporate buyer and executive of one of the largest and most successful retailing and mass-merchandising chain store company in the world, I have people frequently ask me the "true key" to having a corporate buyer select their item over others for a market test. I always manage to try to convince them to expect only a test initially, and to make certain that their product or innovation is packaged professionally, has a value that is perceived to be fair to both the end consumer and the corporate buyer, also to make certain that their product will enhance both the gross margins and the overall appeal of the department the product will be sold in. Also, they must understand prior to making their merchandising presentation to the prospective buyer that there is a divergent ratio between the MSRP and the true landed cost of the item, this is known in retail circles as gross margin.

You see, every corporate buyer will view every new product as a potential liability, even though he may see the potential net worth of the product. To him it is an un-proven commodity, until and unless it can be proven otherwise. If the gross margin is unfair to the rest of the department, it is also unfair to the store unit as a whole, as it has a detracting value, lowering the gross margin of every item in the entire store. You must make the initial presentation keeping that thought in mind, and be ready to negotiate to a landed cost that the buyer is comfortable with, but that you can still profit from. Once your product has proven its worth, some of these factors will change, but your key goal at this stage is to merely insert your product into his retail unit.

A typical average for a "hard-line" item or product which is determined to be durable goods would be in a range from 35% - 45%, depending on the retailer. Softline goods, with the exception of basic undergarments, shoes and shoe products, and domestic items, are primarily fashion-oriented, making them less durable, and the type of products must command a higher margin as they are directly related to a higher liability factor.

Another factor that makes a great difference in your overall presentation to the corporate buyer is the psychology of colors that are involved in your packaging scheme. A good exercise is to visit  some of the retail units you propose to make your presentation to, and study the packaging of the products that are already on the shelf. The possible exception to this would be a "fad" item. Remember, if it does not excite the end-user consumer, it will never be seen on the shelf, because the buyer you make the presentation to is well-versed in the common appeal of the masses, he will not be interested in purchasing for resale a product that is not synergistic with other products in the department because of faulty packaging, or packaging that does not reflect "friendliness" to either the retail unit or the end use consumer.

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