If you’ve ever watched an episode of Shark Tank, you’ve seen the Sharks give mixed advice about entering the world of retail. Usually, the Sharks will advise against it, but there are the occasional entrepreneurs who have the right product that seems destined to succeed.
Jeff Leitman and Killer Concepts
Jeff Leitman, CEO, and Founder of Killer Concepts understands the retail world and has built a company that thrives in the tough retail marketplace. His company is on the Inc. 500 list and is continuing to see growth in the world of retail.
Leitman’s start in the retail world began just after he finished college. In the late 90s and early 2000s, he worked as a buyer during the computer boom. Later, he worked in the growing field of retail supply-chain logistics. The experiences in all aspects of the retail world helped him develop his own company, Killer Concepts, in 2011.
How Killer Concepts is “Killing It” in Retail
His company does it all. They design and manufacture their own products. Then, they move them around the world and sell them. Leitman understands the role of being a buyer and seller and all of the operational and compliance-related steps in between. “We make it, move it, and sell it.” His insider knowledge of retail, inside and out, gives him an advantage over his competitors.
“Know What You Know”
When it comes to entering the retail marketplace, Jeff asserts that the most important thing is to, “Know what you know, and know what you don’t know.” Take advantage of what you already know about the world of business and retail. Secondly, he recommends surrounding yourself with mentors–people who know more and can share their experiences with you.
Leitman says, “the most important thing in understanding retail is to understand the numbers.”
- Start with developing products around the prices you want consumers to pay
- Know blind costs–deductions, expenses, supply-chain costs, commissions
- Know that different channels require different numbers
- Understand that retail and online channels need consistency
Over the past 16 months, Leitman and his staff have been investing in e-commerce. He is still learning, but he also had tips to share with other small business owners. He shared that everything in business is a growing process,
“You start with making the wrong decisions, and then the next time you get to make that decision, you get to make a better one.”
It’s going to be tough. Jeff shared that they are on their 6th version of their website and are still refining it. You’re also going to have to spend some money to get your product in front of buyers. “Having a higher price point and higher margins means you have to have something different.” It’s going to take some trial and error and Jeff admits, “ultimately, you’ve just got to get your hands dirty.”
As a small business owner, Leitman sees himself as an investor. He recognizes that when something works he tests, learns, scales, and refines. The other part of being a business owner involves building relationships, which brings positive energy to his business and his products. There are so many hats that small business owners need to wear if they plan to be successful.
Jeff’s Guide to Retail
Leitman shared more advice for people who have yet to even build a small business, who may still be at the idea level, looking to get into the retail marketplace. He suggests that people just starting out ask good questions about their potential products. According to Jeff, the first step, “once you have your passion, your vision of your product…you’ve really got to shop the market.” Then, ask, “where are you different, how are you different, and where is the value?”
- Can you sell your product?
- Is the thought of a differentiated product realistic?
- Will buyers give up established relationships with other vendors to sell your product instead?
Leitman explained that business “isn’t always fair. There are politics involved.” So, to stay abreast of retail politics, he constantly hopes for loyalty from buyers. But, that can’t always be the case. Therefore, Jeff is always keeping his eye on the ball and maintains that “positive energy, a good plan, and an understanding of the landscape are critical to succeeding in any business.” Leitman also emphasizes that “retails starts with relationships,” and it’s important to develop good customer service by interacting with the people who are involved in buying and selling your products.
Fulfillment Logistics: To Outsource or Not?
After the idea becomes a product, logistics becomes an issue that needs thoughtful consideration. Products can be sold in brick-and-mortar locations and in the online retail marketplace. Both have pros and cons and the balances are still changing. Whatever you choose, understand that your plan will most likely change.
Jeff understands that most small businesses will use outsourcing for their logistics. Killer Concepts outsources their shipping to transportation companies like FedEx because they do not own their own trucks. But, they do their own supply-chain work and they have their own warehouse.
While Killer Concepts does most of its own logistics work, Jeff knows a few things about outsourcing logistics, because of his experience working with 3PL solutions in his younger years. Third-party logistics supply chains come in all sizes and are all over the country. They can help with:
- Filling containers when small businesses do not have enough product
- Supplying warehouse space
- Taking care of inventory
- Packing and shipping
Take Charge of Quality Control
Leitman also shared his experience with quality control, which is constantly a struggle. He advises that small business owners constantly stay involved so products are always to your standards. Small business owners need to be clear about standards. “If you can’t do it in-house, at least be very, very engaged…You have to hand-hold to set the standards, otherwise, they won’t know which standards to follow.”
Taking Quality Control into the Hiring Process
Jeff uses his own version of quality control when it comes to hiring new talent. As an executive and CEO, he said that the “happiest day…is when we hire a new person. We love growing, we love hiring new people” and “when you do it right, it’s so rewarding.” He has learned that looking at the character of the candidates he is considering allows them to be themselves. “We give them a good working environment, we trust them, and they flourish.”
What doesn’t work for Leitman is thinking he’s found the right candidate just because the candidate said one little thing that sounded good. That one little thing won’t be enough and the hiring will be disruptive. “When you get it right, it’s liberating and you know that there are people doing things the things you need to do better than you can do it because you’ve made a good hire.”
Getting Eyeballs on Your Products
Marketing is a necessity for businesses that want customer eyeballs on their products. Leitman has had a range of experiences with marketing. The one constant: he never really knows if he’s doing it the best way or not. Marketing is constant trial and throttle in the retail world, but he does understand that an important aspect involves the presentation on the shelves.
Jeff saw 1000s of products when he worked as a buyer, so he is confident that Killer Concepts has festive packaging designs. When it comes to packaging, he also knows that price point involves where the products will be placed in the store. In some cases, Killer Concepts has been lucky with its real estate inside of stores, but no matter what, the best places do come at a price.
Marketing Advice for New Businesses
“You have two decisions: Am I marketing to sell a product to you today? Or I am I marketing to build a brand and build product awareness?” Businesses that are trying to do both have to value both aspects of marketing. There is constant learning happening, especially when it comes to marketing to different price points. A $17 product requires different marketing than a product that costs $50 or $100.
Killer Concepts has outsourced marketing and Leitman always pays attention to what marketers do and say. He looks for patterns and asks questions. He continues to outsource some aspects of marketing but is doing more in-house. The goal is to get the right message on the right vehicle to customers at the right time. His marketers have found the right path with a few products but shared that, “every day is a challenge about what we are doing tomorrow. It’s a brand new challenge.”
Ask Questions and Always Strive to Learn
The biggest takeaway that small business owners can learn from Jeff Leitman is to constantly be a learner. He finds value in not being the smartest in the room. His value comes in asking questions so that he can understand at his level. “The more you can understand, the better decisions you’re going to make.”