In the past, CBD products were largely sold through marijuana dispensaries and the players in the space had mastered how to get shelf space in those dispensaries. However, getting shelf space in the main retail outlets is a different ball game altogether and CBD companies need to answer two key questions if they are to survive the stiff competition in getting this coveted retail space.
What Is Your Target Market?
It is important to develop a CBD brand for a clearly defined market segment if you are to succeed in catching the eye of consumers who are bombarded with dozens if not hundreds of CBD products to choose from.
When you identify a need and position your product as the ideal solution to that need, then you appeal to the market and even get those who didn’t know about your product to start using it since it was formulated just for them.
For example, one maker of heavy-duty coolers targeted the fishing community by positioning their product as the ideal product to head out with on a fishing trip. This manufacturer singled out bait and tackle shops as the best people to sell their product, and the popularity of the coolers exploded beyond the fisherman and hunter.
Market segmentation therefore is more helpful in getting a product noticed rather than trying to appeal to everyone all at the same time. Which market segment is your CBD product designed for?
Are You Willing to Pay Slotting Fees?
Some large retail chains levy what they call slotting fees on the companies that want to see their products on the shelves of those retailers. This fee is usually a one-off payment that varies from one retail chain to another but is frequently in the range of $5,000-$10,000 for each product range.
The question you should ask yourself is whether you are comfortable paying this fee. On the one hand, paying and getting shelf space in these major retail outlets can get your product before thousands or even millions of potential customers, and the resultant sales can take your company to the next level.
On the other hand, paying for this shelf space isn’t a guarantee that your products will be bought, particularly if a lot of thought hasn’t gone into defining the target market and coming up with the right price points to appeal to that target market.
Additionally, retail chains are frequently pulling products off their shelves and introducing those that have a promise of performing better, so the slotting fee may go to waste if your product doesn’t sell as expected.
These are serious issues to ponder, and experts believe seasoned players like Grapefruit Boulevard Investments Inc. (OTCQB: IGNG) and Green Growth Brands Inc. (CSE: GGB) (OTCQB: GGBXF) have tweaked their answers to those questions numerous times in order to be where they now are.
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