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What else sells? Stuff you can demonstrate. If it begs an explanation or requires an elaborate presentation - that is, if it's a fitness machine, a cooking gadget, a new kind of engine additive - it could fare better on a home-shopping channel than in a store, where the burden lies with a salesperson who may or may not be up to the task. That's why Bob DeBoyace (who also brought us the Exorb-it 2000) thought of QVC when he came across the Bloomin' Aquarium on a recent buying trip to Germany. "It's like an upside-down goldfish bowl that when you put flowers in it, magnifies them about two times and preserves them," DeBoyace explains - or tries to; it's not easy. Home shopping gives him the 15 minutes he feels he needs to show people how the product works.
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Why not just do an infomercial? Because first you'd have to produce it, and then you'd have to pay to put it on the air. Home shopping is free.
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What do the home-shopping broadcasters look for in a product? Because home shopping is live television, it can capitalize on demand faster than anybody else can. Seconds after the last Super Bowl ended on NBC, for example, QVC was offering the same limited-edition hat the Cowboys were wearing at that very moment in the locker room. Sales topped 18,500 units.
Wide appeal works, too. One day home shopping, like other retail outlets, will become segmented. Already the channels are getting more sophisticated at planning shows around product categories and spinning off sibling channels (see "What's On," page 5) aimed at narrower markets. Technological advances will only accelerate the trend. But for now, it helps to have a product that most people watching would at least consider buying.
Finally, home-shopping channels crave exclusivity. Basically, that's been true ever since HSN invented home shopping. But back then, television was the last stop on the retail journey, a way to unload merchandise deemed unsalable by any other means. Deep discounts were the norm. And exclusivity was defined in slightly different terms - as in, "You won't find it anywhere else . . . not anymore!" You'll still find plenty of closeouts on home-shopping channels, especially in categories plagued by short product-life cycles (read electronics). Lately, though, the emphasis has tilted the other way - to products just starting out. Says Doug Briggs, QVC's president of electronic retailing, "More and more, we're doing product launches."
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Why would I want to launch my product on a home-shopping channel? Listen to Frank Montemurro, a manufacturers' agent: "For small people, it comes down to cash flow and risk. It may be very easy to sell in 100,000 units to the traditional retail universe, but sell-through may be very limited, and advertising is expensive. I spent 20 years marketing products the traditional way with big advertising bucks. The amount you need today is staggering. This is a very clean way of doing business."
After a while you move on - to catalogs, to mass merchandisers, to Bloomingdales if that's your market. Products do age quickly on TV; Montemurro says 18 months is about the average life span, two years if you're lucky. But when you're just starting out, the advantages of taking the home-shopping route can be compelling. You get national reach; the equivalent of free advertising; instant market feedback ("You learn what the hot buttons are," says Montemurro); immediate results ("Boom!" says Hays. "The inventory's out, people are happy"); high short-term volume; and vendor-friendly terms (net 30 is the rule).
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How do I get my product on? You could try open vendor day at QVC, Wednesdays from 1 p.m. to 5 p.m., no appointment necessary. "That's very hard," says Montemurro. "The odds of getting your product on are at least 100 to one. Only a year ago the odds were much better. But with Barry Diller and all the publicity, QVC has been inundated with people."
Or you could call vendor relations at any of the channels and request a product-information form, fill it out, attach a photo (samples are discouraged; you won't get them back), and hope for the best. Again, it's a long shot. At HSN, in St. Petersburg, Fla., buyers process 1,100 product sheets a week. Seventy-five percent fail to make the first cut.
Finally, you could contact an agent: someone like Montemurro or Marybeth Hanson, both of whom deal mainly with QVC. For a commission on sales, your agent can present your product to a buyer, usher it through quality control, track it into the warehouse, train the host, script the presentation, and decorate the set.
Above all, don't be discouraged if it doesn't happen right away. Some 3,100 vendors, about 100 of whom are new to the network in any given month, ply their wares on QVC. "The key to retailing electronically is fresh, exciting merchandise," says Frank Isola, vice-president for purchasing at HSN. "We have the ability to use up merchandise very quickly."
They need you.
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Say they want my product. Then what? The channels will want samples. They'll want to run a batch through quality control. They may ask you to repackage. Often they'll run a low-volume market test in the middle of the night to get a feel for demand. (The verdict is swift. "Sometimes as fast as 30 seconds," says Briggs. "Sometimes as long as four minutes.") Assuming your product is a hit, they'll decide how many they can sell, order exactly that, and schedule an appearance. Initial orders vary, but figure $10,000 at cost, minimum. (The selling price is up to them; a 50% profit margin is the target.) Finally, they'll want the full order sitting in their warehouse a good 10 days to two weeks before show time.
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So they handle fulfillment? Completely - a decision that's all wrapped up with the sticky fact that as consumers, most of us don't feel comfortable dealing with home-shopping broadcasters yet. We're afraid of getting saddled with shoddy merchandise; hence the liberal return policy - 30 days, no questions asked. And since we're probably buying on impulse, we're not willing to wait the proverbial "six to eight weeks" for delivery. Which is why QVC and HSN, at least, strive to ship every order within 24 hours. And that, in turn, means they can't sell an item unless it's already in the warehouse.
