Last week I had the opportunity to meet “The Liquidator”, Jeff Schwarz. As a career Marketer of new products, my world has always been about innovation and the eternal search for the next hit product or big idea. Based on the experience of working on products that have been sold in national chains from Walmart to Williams Sonoma, we never know if we have been successful until that first interaction with the consumer.
Its perhaps for that reason that I have found the OLN show ‘The Liquidator” such a strangely compelling TV. It is Marketing stripped right down to the core at the opposite end of the spectrum with Jeff being offered all kinds of distressed and obsolete merchandise, by sellers still grasping at delusions of the value of their goods. The rawness of the interaction between Jeff and the sellers illustrates the old maxim, a good or service is only worth what someone else is willing to pay for it. The consumer doesn’t ultimately care whether or not your factory is in a high cost region, or you forecasted the wrong amount or that feature someone thought was a good idea was really too expensive. The show constantly demonstrates that while the product cost is a major input into your pricing decision process, ultimately it is the market which determines your price. The role of a good Marketer is to understand the market, manage the risk and price the line profitably while optimizing quantity.
One of the lessons from the show is “don’t fall in love with your merchandise”. Example: I always believed there was a market for a premium, multi-compartment food steamer. I was dismayed when another company licensed the Richard Simmons brand and even introduced it on an infamous segment on the Late Show with David Letterman (although this could inspire another blog on PR opportunities gone wrong). For competitive benchmarking, I purchased 1 of the 2 display units at my local hardware store. Three years later the other piece was still there at the same original price. My opinion has changed.
“Keep the goods moving” is another phrase used in the opening of the show. Even consumer durables have a shelf life . The chances of a buyer who has passed on a unit once, adding it later diminishes over time unless an unexpected event occurs or the marketing plan has been incredibly successful. Canadian buyers can be notoriously cautious about giving new products a try. A strong Marketing department will always have a well thought out product roadmap efficiently uses the company’s capital. A peak performing team needs a mix of creative types to drive compelling product development and Marcomm programs to create winning brands but you also need that quantitative skill set to ensure efficient use of the company’s resources.
Jeff is also a master negotiator. Business strategy is often reduced to a game plan to keep as much of the pie between the cost to make something and the final price at the register. The importer, the retailer and factory constantly do a dance over who pays for all the related costs of marketing, quality, service and distribution. In Season 4 the show shifted focus and showcased Jeff sourcing furniture items from Asia (another shared experience). It is an entertaining guide to sourcing and importing. Provided you have a market and channel of distribution, it’s a great lesson on entrepreneurship and doing business today in the global community.
At TempPro Marketing Solutions Inc., we help companies create successful products and marketing programs that hopefully never reach the liquidation phase. If you have challenges in your current product line, we can help you develop a new business plan to get back on track. And we will even try to bring you a little of the street smarts of Jeff Schwarz because inspiration can often come from unlikely sources.