The first product our sports training company made was the Hit-Away, a solo swing trainer that helps young hitters improve their swing. We sold 600,000 directly to consumers through direct marketing TV ads in two years. We used that revenue to begin developing a whole range of athletic training products.
In 2004, we started marketing our products to retailers like Dick's Sporting Goods, Sports Authority, and Walmart. We faced the same challenge again and again: They preferred to sell proven items like baseball bats and soccer balls, rather than untested ones, in this case our sports training aids. But by listening to retailers' needs and by sharing the risks and marketing responsibilities, we eventually won over the skeptics and landed in dozens of major athletic retailers across the country.
Co-marketing with retailers
Initially, we faced resistance from retailers because they worried that our company didn't have the budget to support the release of new products. At the time, we couldn't fund multi-million dollar ad campaigns for each new product, so we made a compromise.
As part of our bargain with retailers we offered to co-market our products. When we created a direct response TV ad or sent out newsletters, we made sure to include information about how customers could purchase our products both from SKLZ and from retailers. In the beginning, SKLZ bore a lot of the advertising burden in exchange for retailers taking the risk to sell our products. To this day our website still informs consumers about the retail locations where they can purchase our products.
Now that retailers and consumers are more familiar with our brand, and it's a leader in the sports training retail category -- a category we essentially created -- retailers are not only more comfortable taking our products, but also have given us significant floor space for our displays.
Bringing retailers into the development process
One of the most important aspects of our campaign to win the trust of retailers was listening to their feedback on our products. They have a direct line to consumers and, as a result, can provide valuable insight on how to help our products sell. At the beginning of each sports season, we travel to our retailers across the country and present our new product lines. Then we use retailers' feedback to make modifications, especially when it comes to things like packaging design. If a particular retailer has a special request, we'll do what we can to fulfill it.
One year, a retailer carried significant inventory of our product going into the holiday season. In an effort to ensure it would sell, the retailer suggested we design a holiday "wrap" and bows for the boxes. So we hired a firm to go into each one of the retailer's stores and retrofit each of the boxes with the holiday bows and messaging. It cost us some money, but it helped the retailer move the product and increased their trust in us.
In some cases we've gone to extremes to form relationships with retailers. For really new and unfamiliar products, we've offered to buy unsold inventory or rebate the retailer a portion of the cost in the event that the product didn't sell at their required pace. Over time, we have developed relationships with our retailers such that we no longer have to make this kind of guarantee, but in the beginning it helped as a good-faith gesture and showed that we had confidence in our products.
Our efforts to improve relationships with retailers have really paid off: We expect to hit $60 million in revenue this year and have over 100 products across all sports. Our products are sold in almost every major sports store in the country.
John Sarkisian is an avid cyclist and has participated in two Challenged Athletes' Foundation Million Dollar Challenges -- 600-mile bike rides down the California coast.
-- As told to Harper Willis