Selling your products to a big box retail store can be an absolute game changer for a growing business. There’s a lot that companies have to accomplish, and some tough questions that have to be answered, before determining if you’re truly ready. But, once you’ve decided to take the leap and sell your wares to big box retail, that’s where the real work begins.
The Right Store
You may have figure out that you are right for big box retail, but is big box retail right for you? Or rather, which big box retail store is going to be the best fit for your business or products? Since the process of applying for, securing, and setting up your first big box retail contract is so intensive, chances are you won’t be able to handle going through it with too many retailers at once. So that means you need to choose carefully which multiunit chain you want to be in business with. Go into your local store and walk around the aisles. Scope out the shelves looking for similar products. Try to picture where your product would sit and ask yourself honestly: Would it feel out of place? Would it get lost in the crowd? Or would it stand out in a good way? Would it feel appropriate in the space? The right big box retail partner can make all the difference not just getting a foot in the door, but also in establishing a long-term, successful relationship.
Before you start the process of applying, figure out which standards are required by the big box store you are looking to get into business with. For instance, some stores mandate that their suppliers carry product liability insurance, or that their financial information be listed with Dun & Bradstreet. Most will want to see that your products have thoroughly organized identification numbers in the form of UPCs (Universal Product Codes). You may be required to be able to do business electronically. If you are dealing with food then you’ll need to prove that all food safety requirements have been met. Same goes for any other safety requirements or labor laws that your products and workers may be subject to. Be prepared for a factory audit if necessary.
Local, National, or Global
Depending on which chain you are planning to work with, be aware that they may have different procedures for pitching and applying to become a supplier at the local, national, or global level. Wal-Mart, for instance, has a “Local Purchase Program,” for which they take pitches directly to local store managers. If the manager likes the pitch, they will send it up to the chain to the Regional General Manager, who will let you know which stores are interested in your product. Stores may also want to move your product up to the next higher level if it performs well.
When it comes time to pitch your product to a big box retailer’s buyer, you’ll have to decide whether or not you are the best person to do the actual pitching. If you only have one pitch or if you have very strong skills as a salesperson, you may be the right person to represent your product or brand. However, it may be more beneficial for you to hire a representative or broker to pitch the buyer on your behalf. While brokers will take a commission (usually around 5 to 7%), they will also bring the benefit of experience, a track record, and potentially even a relationship and history with the buyer. It may also be easier for a broker to handle curveballs, questions, and on-the-spot negotiations.
Figure out the buying procedures of the company you are looking to work with. There may be one or more buyers depending on the type of product and category that it would fall under for the big box retailers business. Some buyers may want to set up a time for a pitch, others may have open vendor days every year, quarter, or even every month, where companies like yours who wish to become vendors can schedule presentations in allotted 30-minute windows.
Once you actually get a presentation, be prepared for you (or your representative) to go in ready to speak their language, answer any questions, and show any and all relevant information. Be familiar with terminology such as discounts, credit, allowances, conditions of sale, and so on. Make sure you also bring a sample product to the presentation, complete with store-appropriate packaging, pricing and a barcode. Bring a product brochure that includes all relevant information about the product, and if you have multiple products include a catalog as well. If there are other retailers currently selling your product, bring a list of who they are and any sales information you have. Overall, the goal is not just to convince the buyers that your product is great, but that it is as close to a “sure thing” as you can get.
If you are interested in this series of Big Box Retail, read our first blog on part 1 and look down the road for the final blog of the series. If your company needs advice or help with big box retail, let 10twelve help your company today!