Terry Lemerond, the man behind supplements brand and Green Bay, Wisconsin, retailer Terry Naturally, is gearing up to open a second store on the other side of town this summer. We talked with him about why he’s opening a new store now, and about what it’s like to work in both retail and manufacturing—and what one side can teach the other.
Why are you opening the store now?
Terry Lemerond: We've done so well with our first store. We opened up in 2006 and we have exceeded our expectations and our budget every year. It's just had such an impact that we just want to take it across town. This area's exploding, and we have an area of our community that is not really being served by a good health food store.
Our current store is on the east side of Green Bay, and we're putting our new store on the very far west side, where there's a new explosion of homes and development. It's growing leaps and bounds.
Is the new store going to look different or have different offerings than the original location, or will it be a replica?
TL: It's almost a replica, just a little bigger; our current store is just under 4,000 square feet and the new store is about 5,000 square feet. Our first store is really very well received. It's a very warm and inviting atmosphere; we carry a very large selection of products. Our staff is very well trained. It's doing extremely well.
You have plenty of experience both in manufacturing in retail. What have you learned from the retail side that has helped you in manufacturing?
TL: Working in a retail store for 15 years prior to my getting into manufacturing was like working with a focus group—every day, you listen to the customers as to what they wanted, what they needed, what they liked and didn't like, and everything they told me was a learning experience. So I learned a lot from my customers as to what they really would like to find in products and what they were looking for to accomplish their goals of being healthy and having more of a vibrant life.
You're always listening to the consumer. You learn a lot from your customers. Really the health food store is the learning ground for manufacturing. There's a lot of manufacturers that really don't understand retail and what the retailer goes through in order to have a successful store.
What do you think sets Terry Naturally apart from other brands?
TL: We use the highest quality materials. We're not interested in discounting our products. We spend a lot of time, a lot of money, a lot of funding of studies and research—so we want our product to be extremely effective and successful. Every product we sell, we sell with a money-back guarantee that if they're not happy and healthy, then we make them happy by refunding their money.
How much of what you sell in your store is Terry Naturally brand?
TL: The store is probably 75 percent Terry Naturally. We also carry some very good lines besides the Terry Naturally brand; you do want to carry products that fill the gaps and that people are looking for. Overall, we carry very little inventory in our store.
Our major brand has been analyzed by SPINS to be the No. 1 brand in the U.S. in health food stores. We have the No. 1 brand, the No. 1 products—we have the top 6 products out of the top 10, out of 160 brands.
What are your top sellers?
TL: CuraMed and Curamin. We also have two products for thyroid, Thyroid Care and Tri-Iodine, and we have a product for adrenals that is top-selling.
What advice can you offer other small supplement retailers?
TL: Service has to be number one. You have to recognize your customers as the people who are making your store and signing your checks. Give them the highest-quality products, and don't try to discount. Discounting just hurts your stores and hurts the industry. If it's a good quality product, why do you give it away? Discounting is only because they don't know how to sell the product. But service is number one. You've got to take care of the people who take care of you.
You mentioned you carry little inventory. Is that a tactic you recommend to other retailers?
TL: We never lose a customer. They trust us. When they come in, if we don't have a product, we can show them a product that will be even, I hope, better. I've seen some companies carry like a thousand tinctures from one company, and they carry three companies’ tinctures. Who buys that many tinctures in a month or six months or a year? I think people are just over-carrying products because they're afraid to say, “I don't have that.” So they try to carry everything.
And really when you look at the SPINS data, 78 percent of the sales in our category is done by 10 companies. You don't have to carry as much as you're carrying. I go in and sometimes there's so many products, you can't even tell which ones they are because they all run into each other. They get blurry.
We brand-block our products in the store. There's been good research showing that when you brand-block, you increase your sales by 40 percent. People put everything into different categories—and all those categories, you can't even read them because they all run into each other.
And when you have three or four facings, three deep, you increase your sales by 30 percent. I would not put one bottle on the shelf, because nobody wants to buy the last bottle on the shelf. Some people say, well I don't sell very much of that—well then don't carry it.
You want to have products that continue to move and turn. You can always special order if something happens and you need something, but you've got to really pare down your store so that you know what you have in your store. Some stores don't even know if they have that product on the shelf.
People have to be lean and mean. Carry good, good, good products. Spend time to know those products, train your staff, pay your staff—well—so you don't have turnover.
You also mentioned not discounting. Do you make any exceptions to that? Have you lost any sales to people shopping online?
TL: I don't let online bother me. We do have one special discount—if they buy three bottles or boxes of one SKU, we give a 20 percent discount. That's the only way we'll discount. But when a whole store does 20-25 percent off, you've got to work hard to make that up.
When you look at online—you might save some money, but you can't ask any advice. If you don't like the product, it's hard to return, you have to pay for shipping. In the long run, do you really save any money, and do you really know what you're buying when you buy online?
The retailer works hard. They've got a lot of overhead. They've got brick and mortar. A lot goes into having a store and they service the community, they're part of the community. The internet takes the money out of the community.
All our products have an absolutely money-back guarantee. We do different things to make it an exciting experience that you don't get someplace else. Generally speaking, the price of a product is about fourth on the list of why people shop with you. They shop because of recognition, they shop for service, they shop for experience. And if they want to return that product, bring it back, we'll give your money back and we'll find something else to help you.