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Want to see your products on the shelves at major retailers? Here are some strategies to make that dream a reality.
As a small to midsize supplier, being able to sell your product to a large retailer might sound like a dream scenario. After all, these big buyers can give you the revenue needed to grow and quickly introduce your products to new markets and consumers. For many suppliers, a contract with a large retailer can also help their business reap the advantages of economies of scale, leading to more efficient production, further cost savings and growth.
Landing a deal like this usually takes a significant amount of persistence and preparation, but it is possible — as long as you do your homework. Whether your business offers food products, electronics or anything in between, here are five best practices to prepare for landing your dream buyer and setting this relationship up for success.
Before pitching to larger retailers, it’s important to establish a clear brand message. This process ensures that buyers will understand exactly what you offer and helps determine which buyers you should be targeting. What is your offering, who is it for and what problem does it solve? Is the product in demand? How is it unique from similar products that your target buyers already carry? This is all information that buyers need to know upfront when they’re considering you as a supplier.
Once your business’s brand message is locked in, the next step is to invest in marketing your product. Some strategies might include:
At this stage, you should prepare an effective sales pitch. Most retailers will ask for a “sell sheet,” a one-page elevator pitch for your product. Because retailers want to give customers options and value, it’s important to emphasize your value proposition and any outcomes that customers will experience when they choose your product.
If your sell sheet appeals to the retailer, the company’s representative will most likely schedule a meeting and ask for your current sales numbers, wholesale prices per unit and how the product performs with other retailers. It’s also best to come prepared with your distribution and supply chain strategies, as well as information on your product delivery volumes and timelines.
If sales aren’t your strong suit, consider hiring a manufacturer’s representative. These independent sales agents work on commission and typically have a wealth of knowledge and experience in your market with existing buyer relationships.
Research your ideal buyer alongside any marketing and sales efforts. Take the time to investigate which retailers have a demand for your product and what other brands they carry. Understanding their current offerings and target demographic will help determine whether your product is a good fit. Reviews are also a great place to start — customers may reveal market gaps that your product could fill, making it more competitive and appealing.
Your current customer base can also provide a wealth of information. If your products are doing well with existing buyers, find out what other products they sell and where else those products are carried. This can be a valuable way to find other best-fit retailers.
When you have a list of target buyers, dive deeper into their specific supplier requirements. For example, Walmart publishes a comprehensive guide on supplier standards. Walmart’s suppliers must also satisfy several requirements, such as registering with Dun & Bradstreet and completing a Factory Capability and Capacity Audit (FCCA). If you can, find out how the retailer navigates purchasing cycles and pricing, as well as logistics such as shipments and payment terms. This information can inform a comprehensive pitch and mean your business is prepared for particulars such as lengthy payment terms.
The internet is a valuable resource when researching your target buyers. Use LinkedIn to connect with purchasing managers in your product category. Reaching out with a two-sentence description of your product and its value proposition is sufficient. You can also ask for the best way to connect further.
Unfortunately, some of the contacts and information may be unavailable online. In that case, email or call prospective buyers to learn more about supplier requirements, processes and what products they’re looking for. At the very least, these conversations can help identify who the best contact person is when initiating a new buyer relationship.
Big deals often arise from whom you know, not necessarily from how many cold calls you make. This is why it’s important to build relationships within your business network when trying to sell your product to a retailer, especially a new one.
One of the most common ways to nurture these connections is by attending trade shows and events in your sector. Trade shows are an effective way to interact with qualified buyers, show them your products in person and schedule appointments. Retailers may take you more seriously if you put in the time and resources to attend key events. These settings are also ideal for networking with other suppliers, which can lead to referrals and resource sharing. However, if trade shows are too costly for your business, prioritize the most promising ones and consider being an attendee if booth rentals aren’t affordable. You can also try online services, such as RangeMe, that connect buyers and suppliers for an affordable subscription fee.
Expanding your network beyond large retailers is another useful long-term strategy. For example, consider connecting with distributors. Like a manufacturer’s representative, distributors already have established buyer networks and industry knowledge, as well as resources and experience in logistics such as shipping. Because landing a big deal can take time, consider networking with smaller buyers as well. This can promote faster sales — and diversifying your buyers protects your business against risk. In some cases, local chain stores are governed by larger regional buyers. Capturing interest from these retailers may be easier than going directly to the regional buyer and could lead to bigger deals down the road.
Regardless of whom you build your network with, use LinkedIn regularly to find relevant contacts and engage with them. The most important thing is to communicate consistently and follow through on meetings, calls and other action items. This shows buyers that they can trust you to deliver on your promises from the start of the relationship.
Many retailers are evolving when it comes to sustainability, diversity and inclusion — and their supply chains are no exception. According to McKinsey & Company, over 90% of S&P 500 companies now publish environmental, social and governance (ESG) reports. Retailers are under increased scrutiny from lenders and investors to show tangible results from their ESG efforts, not to mention mandates such as scope 3 emissions reporting. Businesses that integrate sustainability into their operations — for example, by using renewable energy sources such as solar panels — are more appealing to retailers that prioritize ESG.
If your business is more than 50% owned by an underrepresented individual or group, consider becoming certified as a diverse supplier. Certification is another way to expand your business opportunities while giving you better access to financing, networking and training programs. Some enterprises have special supplier diversity programs that give diverse-certified businesses exclusive benefits.
If you’ve used the above strategies, you might already have a unique, in-demand offering, a compelling sales pitch backed by thorough research and a network of contacts ready to see your product.
However, these efforts could be futile if you don’t also have the capital to sustain the buyers’ demands should the relationship move forward. It’s best to forecast your cash flow and ensure that you can afford the supply chain requirements before you start pitching to retailers. Here are some steps you can take to make sure your business is financially sound and capable of meeting a large buyer’s needs:
Selling products to major retailers is the ultimate goal for many small to midsize businesses. While large contracts might seem out of reach, putting effort into marketing and sales, buyer research and networking can help you reach this goal. If it’s appropriate, consider investing in sustainability initiatives or becoming diverse-certified to appeal to ESG-focused buyers. And most importantly, ensure that you have sufficient working capital to meet demand and maintain healthy buyer relationships for years to come.
Click here to access more resources and strategies on cash flow management for small to midsize businesses.
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