Every retail software company started in a dorm or garage dreams of making it big. This vision generally means having rows of your product on the store shelves of Best Buy, Office Depot, Staples, Wal-Mart, Costco etc. Who doesn’t want access to millions of shoppers and the ability to leverage your brand from retail?

Stop and think it through.

Retail costs A LOT of money. Tens of thousands to do it right when starting out.
Boxes + shipping – $1-5/unit (depending on volume)
Marketing development funds (MDF)
Ad dollars for flyers
Costs to distributors
Costs to retailers
Return costs if your product doesn’t sell

It is survival of the fittest in retail, especially in 2010. Starting small and conquering your niche on the web is better than trying to jump straight to retail with no running history, no understanding of your customer and low odds of success.

You need to solve a pain with your software, be Advil. There is a very natural process to it. Start simple, solve a problem and build cash. Jumping the chasm from a niche to a mass market product is the next step. Once you are making very solid profit, test the market with a regional retailer that has 50-100 stores, find success and then finally move up to the mass market retailers.

This entry was posted on Wednesday, March 24th, 2010 at 12:22 pmand is filed under Industry News. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.