Do you know that the top 50 retailers in the UK turnover £217 billion in the year 2104/5? That is a staggering amount of sales. And you the small retailers can get a slice of that very large pie. Selling to large retailers means increased brand visibility, customer awareness and increased revenue and profits. But how? Simply ask yourself these questions.
Do you have the answers to these questions?
Before contacting a retail company, you should do your due diligence and ask yourself these following hard questions.
- Do your products fit a demand?
- Have you found a retail company that’s fit for your products?
- What is it about your products that the retail company will like to take a chance with?
- If you get the deal, will you be able to manage the volume of production?
- Do you prefer selling your products directly to retailer or will you prefer licensing your products to a manufacturer who will distribute the products?
Is the profit margin big enough you?
Before pitching to large retailers, you should make sure that you have factored all the costs including packaging cost, marketing cost, manufacturing cost, distribution costs as well as sales commissions of the products. Finally, check retailers’ guidelines for other fees. This will help you determine if you can make a reasonable profit margin from your product.
Are you a good fit and vice versa?
To find a retail company fit for your products, you should start by searching stores that sells similar products. Visit local stores to see what products are on the shelves. Do they sell you type of product in large enough volumes for you to make a reasonable profit? What other brands are you competing with?
Sam Burston head of category at Sainsbury gave his tips for pitching to large retailers in a recent Enterprise Nation video. Two of his tips being “the need for businesses to have a clear understanding of their customer and where the product would fit within the retailers inventory” and “the future plans the small business has for the product to make it sustainable as well as a scalable opportunity. ”
Can you convey your USP quickly and clearly?
When pitching to large retailers, it’s important for you to highlight what your unique selling point is. If you’re not sure what’s your USP or want to sharpen it, then watch this excellent short video by Summer Alexander for some useful tips. It is very likely that the retail buyer has already heard pitches from many businesses that are similar like yours. In this case, you should make sure that you can clearly conveyed what’s unique about your products and what differentiates the products from other products in stock by rehearsing it beforehand so that the essence of your offer comes through loud and clear.
Do you know your figures?
Many a pitcher has crashed and burned when asked about their figures during the negotiation section. Figures are core to your pitch. The guys over there at Startacus put it very neatly when they said: ” A retail buyer will expect you to know your numbers inside out. They will want to know how much it will cost them to buy from you – any discounts for bulk ordering and any special offers for repeat ordering. If you are asked questions about quantities, about pricing negotiation and about practical things like order fulfilments, you have to know the answers off pat. Stumbling over your answers, calculating things incorrectly or looking confused when asked something ’number’ related will convey a wholly unprofessional impression.”
Checklist of questions you’ll be asked
In order to ensure that you are ready to meet the retail buyer, you should be ready to answer each and every question about your products.
The following are some typical questions you should expect
- Who are your target customers for these products?
- Have you priced the products competitively?
- Do you hold patents for the products?
- How are your products packed to sell?
Being prepared to answer all questions will be necessary to having a productive conversation.
Are you prepared for increased production volume?
You will need to show the retailer that you are able to increase volumes of your product whilst maintaining quality and delivery times. This means getting assurances from your manufacturer that they are able to do this profitably before going into the meeting. Keep in mind that some retail buyers specify penalisation fees for failing to deliver goods and services on time.
By making use of this guide, your dream of getting your products to large retail suppliers will not remain a dream. Winning a contract from a large retailer is just what you need to grow your business. As well as the obvious financial rewards, doing business with large retailers will increase your company’s credibility and status. It will also give you the added confidence to go out and win more business.
As this guide shows, it can be done but requires hard work and commitment. As the saying goes fortune favours the brave and the well prepared.
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