The commerce network that links interested retailers with exciting new products

Pitching your product to large retailers – Are you ready?

At our focus is to make sure you are finding new customers and we want to make sure you understand what you need to ready for when working with the “big boxes”.

Most large organizations have big bureaucracies; this means that they have great purchasing power and negotiating power. They are able to sell their products cheaply because of these two very strong attributes. Make sure you are prepared for this as you head in to the first meeting, you will be pushed hard.

Some items you need to be aware of:

  1. Warehousing and shipping – Unlike dealing with smaller clients, where your product is sent to is not where it will end up. Most large companies have distribution centers and will require you to package and label everything that you are sending in the fashion they ask. Many will ding you for not labeling it correctly because it takes time for them to fix the mistake. Many of the dings to your revenue are around 5%.
  2. Insurance – If you do not have insurance (in case your t-shirt or water bottle blow up) you better be looking for one. Depending on the product, they may ask for the product to be insured up to $2,000,000 overall. They ask for you to list them on the policy as part of the requirement. Some insurance companies will do this for free, some charge you only $150 just to put their name on your policy.
  3. Marketing Co-ops – Many times you are going to have to pay to have some marketing in the stores. This can be end caps, overhead signs and sometimes even the rental space for the product on the shelf. This can sometimes be an initial outlay of money even before you ship your product to the company.
  4. Charge backs – this is a tricky one, they do not want to buy your product and then not have it sell. So if it does not sell, many times you are going to have to give them their money back and take the unsold product back.
  5. Big teams – Most of the time you will be working with lots of different people and you will need to do most of the coordination. This includes inside marketing groups, logistics teams, buyer teams, etc. Be prepared for conference calls and other coordinating activities.

These are just a small sample of what you need to be ready for. Be prepared and be willing to put in the extra time if this is the route you want to go down.

A few statistics for you to consider though when focusing only on the big boxes:

–       For every 1 big box there are 9 independent retailers

–       Independent retailers account for more than half of all retail dollars spent, the largest segment of retail

–       For every $100 spent at a local business, $73 stays in the local economy, whereas only $43 stays in the local economy when the money is spent at the big box.

The difficulty lies in reaching these smaller stores; with we will make that a much easier process.


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This entry was posted on January 25, 2012 by in marketing, Retail, sales and tagged .
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