Why consumer brands should build evidence of demand before investing in U.S. distribution
If you’ve never sold in the U.S., don’t spend your first big dollars trying to scale. Spend them reducing what you don’t know.
Getting Into Retail Is Expensive Without the Right Signals
We worked with a beauty brand looking to enter the U.S. market that had invested in preparing 10 products for launch – including certifications and printed packaging – without ever selling those products in the U.S. before.
That’s an expensive way to find out whether your product has a customer here.
When you’ve never sold in the U.S., there is a framework to follow.
You don’t know all the players. You don’t know the language of the market. You don’t fully understand the trends yet. And, regrettably, it’s true: you won’t know whether your product appeals to a U.S. customer until you put it in front of one.
You need a channel where you can collect feedback, observe what happens and use that information to make your next decision.
Forget about scaling sales for a minute.
Focus on the pilot first.
Selling in this market is expensive. You don’t want to invest in scaling before you have some proof of concept.
The Funding Chicken-or-the-Egg Problem
This is where founders face several chicken-or-the-egg problems:
- They need funding to enter the U.S. market, so they start looking for investors.
- Investors want traction. But traction in your home market doesn’t automatically mean you have U.S. market traction. You’re essentially asking an investor to believe that what worked somewhere else will work here.
- Founders who do get funding don’t always have the right framework for investing in the next RIGHT STEP. So they start spending on product, channels and marketing while they may still be figuring out who their U.S. customer actually is.
Entering a new market is complex.
But at the beginning, the job can actually be simpler if you focus on removing things from the list instead of adding them.
Your First U.S. Investment Should Buy Information
Don’t select 10 products to enter the market. Choose one or two, based on real insights.
Then investigate the HELL out of them.
Who buys?
Who doesn’t?
What price works?
Does the packaging make sense here?
What messaging gets a response?
Who are we even talking to?
Then set a conservative budget specifically to gather those insights.
And this is where things get uncomfortable.
Tell a brand or investor, “We’re going to allocate money to learn,” and nobody gets particularly excited about writing the check.
It feels safer to build something more robust. More inventory. More products. A bigger launch.
But think about it:
You’re still testing. You’re just testing with a bigger budget and telling yourself you’re not. The hard conversation about whether the product works in this market will happen today or years from now. You won’t be spared – only the price of finding out will change.
Get the Cold Plunge Sooner
There are several ways to run simple, relatively inexpensive pilots and get the cold plunge sooner.
Sampling programs can get products directly in front of customers or industry experts. Small ecommerce tests can give you actual purchase behavior. Pop-ups can test pricing, messaging and product response. A limited marketplace assortment can start generating customer data.
And yes, the hard truth is that sometimes you spend a small amount of money and learn:
People don’t want this product.
Or:
People want this product – but in another format.
Different packaging. Different price. Different message. Maybe even a different customer.
That information may hurt.
But you didn’t spend $300,000 learning it.
The cost saving is the win.
You bought information before buying scale.
Make Distribution the Next Step, Not the First One
Distribution is powerful when there is something behind it.
A customer who wants the product.
A product people come back for.
Data showing where demand exists.
A plan for creating velocity once the product reaches the shelf.
Before asking:
“How do we get into more stores?”
Know what you can show when someone asks:
“Why will this sell in mine?”
Build the evidence. Then use distribution to scale it.
Achachay: Helping consumer brands navigate the U.S. market.
Retail. Marketplaces. Strategy.
U.S. retail insights, marketplace strategy, consumer brands, U.S. market entry, retail strategy