An inside look on how win-win might work for small vendors and big retailers.
BY JOHNNY HARRIS
I’m a small vendor with a good product that’s doing great with local independents, but I can’t even get the time of day from larger retailers. What can I do?
This is not unusual, and many factors could be contributing to the problem. First off, it sounds like you haven’t even been able to get in the door with the larger retailers. If that’s the case, do you have a broker or rep who has good contacts with the chains you are targeting? That’s vital. The days of “Build a better mousetrap and the world will beat a path to your door” are long since gone. After all, Ralph Waldo Emerson said that in the 1800s.
A WORD ABOUT BROKERS
If you don’t have personal contacts with key buyers, find someone who does. If that means making the difficult decision of getting a new broker or a new rep, so be it. Let me add a word of caution here: You don’t need the biggest broker, and in fact you should probably just find a hungry regional broker who will take an interest in you and your products. Many of the big brokers won’t do much for you unless you are a multi-million dollar account.
Now, when your broker or rep finally gets an appointment, give them some decision-making authority. If you insist on micromanaging everything, so that the broker has to call you for approvals all the time, you may never get in the door again. Your broker should be able to make most decisions on the fly about what will meet the needs of the category manager. And don’t insist on coming along on that first call. Brokers generally present several lines at once during a call, and you might just get in the way. Ask first.
If you have contacts within the chain you are targeting, use them. In my book, it’s a category manager’s responsibility to see every vendor who wants an appointment. If you can get in through a side door, do it. During my career, I was warned sometimes that I had to see every vendor, and spot checks were made to make sure that I did.
The second most common complaint I hear from small vendors is that they cannot possibly come in with big bucks for slotting and promotion, and folders full of consumer research and data. That’s certainly true, and most retailers recognize that. See if they’ll negotiate, let you pay over time, or work out a win-win arrangement. Have some alternatives ready to present. You don’t get if you don’t ask. I’m not saying this is going to work every time or even most of the time. But if you walk in with a defeatist attitude, you’ll be defeated.
Next, make sure you study the chains where you want to put your product. What would your product replace? In which stores, and why? How would it help the stores’ variety statement? How would it help differentiate the stores or grow the category? If you don’t have ready answers to those questions when you walk in the door, you’re already in trouble. So do your homework.
If you don’t have the production capacity to handle an order from 200 or 1,000 stores, don’t call on those stores until you do. If you need to go to contract manufacturing, do your homework there, too.
And finally, be careful if you believe in your heart that your high-end, high-price niche product is going to do enough volume at a major chain to deserve shelf space. Sometimes, the dip with the best ingredients in the world may be magnificent, but will never sell in the dairy department. Consider the deli, which can get away with higher price points and margins than dairy. Or, consider a reformulation — or sticking with upscale boutique-style stores.