Ladies Who Launch

What’s broken: Nothing yet, but a break will occur if her company is the flavor of the month at the retailer, and consumers can’t find her product in retail channels afterwards. I’ve seen this happen before, and it’s not pretty. Say the retailer buys a zillion pallets of her product, so she ramps up manufacturing and cranks out product. The products are shipped to the retailer, it distributes to a few of its stores and all product is sold quickly (we hope!). Shortly thereafter, customers start to notice the results of the fabulous moisturizer (which Sue was paid little for, as the retailer demands massive discounts) and now they want more. They go to Costco, and it’s not there. They go to the drug store/supermarket/(you name it) and it’s not there. Meanwhile, what does Sue do with her manufacturing contractors? Tell them the massive order was a one-time gig? How does she predict demand?

How to fix it: I hate to say this, but I think Sue should hold off until she has her distribution nailed. Getting into a mass retailer is a fabulous advertising opportunity—yes, that’s what it is—and she needs to have other channels set up to sell her product once her debut is over. Sue’s products must be available elsewhere offline so repeat and word-of-mouth potential customers can find them. She can’t count on them only buying via the Net.

Christine Comaford-Lynch is CEO of Mighty Ventures , an innovation accelerator which helps businesses to massively increase sales, product offerings, and company value. She has built and sold five of her own businesses with an average 700 percent return on investment, served as a board director or in-the-trenches advisor to 36 start-ups, and has invested in over 200 start-ups as a venture capitalist or angel investor. Christine has consulted to the White House (Clinton and Bush), 700 of the Fortune 1000, and hundreds of small businesses. For four free business-boosting podcasts, visit http://www.mightyventures.com/gift.

Ladies Who Launch is asking you … do you have any financing horror stories to share? If so, tell us in the Comments section below!

Clearly Christine is a financial tour-de-force with a passion for helping others. For more from this serial entrepreneur, read her “Rules for Raising Capital.“