Sink or Sell Episode 8 - The Numbers Behind Retail

12th April 2017

Jamey Bennet is the founder and CEO of Gotta.io, a software-as-a-service platform giving early-stage consumer product companies easier access to profitable retail distribution. Gotta.io is Jamey’s fourth startup. He founded BookWire, a B2B marketplace for book publishing; LendingTree, the consumer loan marketplace; and LightWedge, an innovative book light, which he grew at the retail level over more than a decade. He sold millions of units to huge U.S. retailers, such as Wal-Mart, Best Buy, Target, Staples and more, as well as retailers in Europe and Asia. Gotta.io was inspired by Jamey’s experience with these retailers, as he realized profitable distribution on a large scale could happen much more quickly if entrepreneurs simply knew what they need to know, to avoid the sometimes fatal retail sales and operations pitfalls.

Over time, many successful startups will begin to develop spreadsheets and collect data that contain everything they need to know about their costs, detailing way beyond gross margin calculations and calculating exactly what it takes to get into national retail. Instead of new entrepreneurs learning these tricks of the trades over time, gotta.io streamlines and synthesizes it all into one calculator that’s available right now, so founders can see right from the beginning what retail takes and the capital that they need, without waiting to learn it the hard way over the years.

When using the calculator, you’ll need some basic information—landing cost, selling prices, wholesale pricing, etc. — but it gets more interesting. The number of stores you’re in, how many units you sell per store per week and more is all thrown into the mix, to create hypothetical and real data that you can use to speak and negotiate wth retail buyers. It’s not necessarily to create leverage, but rather to create a proper foundation for good expectations, as you take in even more added costs, such as damage defective allowances and other deductions.

The information is basically free, right on the gotta.io site for entrepreneurs, to demystify the process of getting a product into retail. The calculator is just the beginning, and something for hardware startups to enjoy while the real gotta.io platform is created. Working sort of like TurboTax, the platform will ask founders a series of questions, forcing them to think through their operations and then helping them to understand their business and the numbers behind it.

Jamey says, in many ways, after getting that initial meeting, a retailer is looking at a team’s ability to execute, not necessarily just at the product. They’ll ask about shipping, 3PL and use  industry jargon and, if you don’t know what they’re talking about, they’ll take it as a sign not to work with you. The gotta.io platform helps entrepreneurs pre-qualify themselves for these meetings before they even walk in the door, by making sure they can answer all the hard questions.

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