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How to crack Egghead.

"Getting onto Egghead Discount software's display racks," a PC Week columnist once wrote, "is more difficult than having your wedding carried by the society pages of the New York Times." However, making the cut at the Times merely confers a little status; winning Egghead's approval provides instant access to the industry's largest software-only retailer (1988 sales: $311 million)--a nationwide chain with more than 200 outlets and a huge direct sales force.

What does it take to sell Egghead on a new title? We recently asked Egghead senior vice president Larry Foster to explain his acquisition policies:

You've often said that Egghead loves new titles. Why?

"We've found out that the average Egghead shopper visits our stores 3.9 times a month--a phenomenal number," says Foster. "And when these people come in, they want to see something new. my worst nightmare would be to have software from just three or four companies on the shelf."

Nevertheless, you must turn down a lot of products.

"We get approximately a hundred submissions a week. of these, we'll pick up about 20," Foster says. "Remember, however, that our stores don't have accordion walls. whenever we add something new, we also have to delete something else." (Egghead's general policy is to drop titles that generate less than one or two sales a month per store, he says.)

Does every Egghead store actually carry your full line?

Foster says that every Egghead outlet offers all the titles on the company's Basic stocking List. "Right now, we have 1,611 different items in our stores, of which 800 to 1,000 are software and the rest are accessories, cables, and paper products." To stock all his outlets, he says a typical opening order for a new product is usually about a thousand store copies and another 200 units for warehouse backup. In addition, Egghead's corporate sales force actively sells another 400 titles that Egghead stocks only in its warehouse. "And we fill another 15,000 special orders a month--an unbelievable number."

Do you usually buy direct or through distributors?

.'That's definitely deal-dependent. Just to set up a new manufacturer in my database costs me $300, so I may just add a new title to the list of things I buy every week from our distributors. But if I'm more confident, I'll probably buy direct." Egghead usually negotiates a 55% discount, Foster says, except in "noisy categories" like word processing, where he looks for extra competitive margin (about 60%).

Is there a formal evaluation process?

"Well, the generic vanilla approach is to call our corporate office and find out the name of the buyer who runs that category or division. Send a typed letter with a copy of the product and any marketing ideas you have." Foster warns that Egghead's buyers don't always follow through as promptly as developers might like. "To be perfectly honest, we get behind on our evaluations. We're trying to get better, but we're human."

What's the best way to persuade you to look at a new title?

"People try everything--just the other day someone sent me a pepperoni pizza. But the single best way is for us to call you. That's not a flip answer: A lot of software is developed in garages and back rooms, and the developers don't know how to create any interest. If you can get a great review or create some regional excitement--or if we're getting a lot of special order business--then naturally we're going to pay more attention to you."

Does a developer have to buy into your promotional programs?

"That carries a lot of weight with us. Occasionally, we deal with people whose product we love who have no money. But we're a promotionally driven company--that's just the way we are."
COPYRIGHT 1989 Soft-letter
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 1989, Gale Group. All rights reserved. Gale Group is a Thomson Corporation Company.

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Title Annotation:getting software onto Egghead Discount Software display racks
Publication:Soft-Letter
Article Type:interview
Date:Apr 15, 1989
Words:626
Next Article:Vadim Yasinovsky: "Give everyone a deal." (Clear Software pres speaks on pricing)
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