Selling to supermarkets - any tips?
Discussion
I supplied own-brand stuff to most of the major multiples for five years.
There is no loyalty. If you have a brand they want or need, they know you will blink first. If you supply own-brand, then its all about price, and it all comes up for auction every twelve months.
Buyers move around every six months or so, in order to avoid relationships developing. Consequently, "Can you do me a favour?" never happens.
If they decide to change packaging, or add flashes, you will pay for it, and you'll use their nominated designers. If they decide to do a promotion, you will pay for it.
They will expect product in warehouse/s of their choice, within 24 hours of ordering, and often within 12. You'll get a 1 hour time slot.
You will pay for breakages, damages and customer returns.
They will pay you when they're good and ready.
If you have a good product, and if they can make at least 50% gross on it, then volumes can be huge.
There is no loyalty. If you have a brand they want or need, they know you will blink first. If you supply own-brand, then its all about price, and it all comes up for auction every twelve months.
Buyers move around every six months or so, in order to avoid relationships developing. Consequently, "Can you do me a favour?" never happens.
If they decide to change packaging, or add flashes, you will pay for it, and you'll use their nominated designers. If they decide to do a promotion, you will pay for it.
They will expect product in warehouse/s of their choice, within 24 hours of ordering, and often within 12. You'll get a 1 hour time slot.
You will pay for breakages, damages and customer returns.
They will pay you when they're good and ready.
If you have a good product, and if they can make at least 50% gross on it, then volumes can be huge.
All depends on what you're selling.
I've had tesco on 7 day terms before, but we supplied fresh produce that they needed. We explained the situation and they helped.
Waitrose were another matter entirely.
I don't think you're going to have the leverage with coffee so be prepared for all the tales of woe above.
I've had tesco on 7 day terms before, but we supplied fresh produce that they needed. We explained the situation and they helped.
Waitrose were another matter entirely.
I don't think you're going to have the leverage with coffee so be prepared for all the tales of woe above.
I sell to Supermarkets. I work for a market leader across several different categories which gives you some leverage..
If you're new and un-known, you really need to present why your product is different and incremental to their category - if, for example they've got 5 other brands that do a similar job, why would they introduce another product which would only steal sales from their current range.
Tesco et al have been reducing down their number of similar products (project re-set it was called) as they're trying to compete against Aldi and Lidl who have smaller more condensed ranges.
Booths are a good shout to start with, think of something unique and different for your 'pitch'. Also make sure you've got the basics covered beforehand, price points (why you've pitched at that price), retailer % and £ margins, promotional plan, new line details etc - they might be the basics but its the small details that matters..
If you're new and un-known, you really need to present why your product is different and incremental to their category - if, for example they've got 5 other brands that do a similar job, why would they introduce another product which would only steal sales from their current range.
Tesco et al have been reducing down their number of similar products (project re-set it was called) as they're trying to compete against Aldi and Lidl who have smaller more condensed ranges.
Booths are a good shout to start with, think of something unique and different for your 'pitch'. Also make sure you've got the basics covered beforehand, price points (why you've pitched at that price), retailer % and £ margins, promotional plan, new line details etc - they might be the basics but its the small details that matters..
This is 2nd hand experience, not mine
A logistics mate worked for a diary products company. They tried to get into a supermarket chain, and the sales team (of 2) got an appointment in their Leeds HQ.
HQ gave them a date and said 9 am prompt. Not being local (very south west), they asked for advice on a reasonable hotel, and the HQ suggestion was “only a few miles away” on the other side of Leeds. My mate ( from Wakefield) knows Leeds well said, “don’t stay there, you need to be MUCH closer to HQ”. They ignored him. Although only 3 miles away, they underestimated the traffic, Leeds doesn’t have traffic according to the southerners, and they missed the appointment by 2 minutes. HQ refused to see them. The next appointment was in 3 months’ time. All that way for nothing.
Another mate sold Border country top grade meat into top hotels and restaurants. It cost £6/lb to “grow” the meat, but he solid it on at £11-12/lb. One “yummy mummy” supermarket chain was buying everything they were allocated, even at that price. Another supermarket wanted it for their “finest” range, and the most they would pay is £5/lb, and that was all they would pay, and the buyer couldn’t understand why he wouldn’t sell it at a loss. Said mate got increasingly irate with their buyer until he asked him to leave with the second word as “off”.
Another one oversees a facility that makes cooked goods for all the supermarkets, a million a week stuff. He said Waitrose were then good people to do business with, but they got so much grief off the “finest” one, they were tempted to pull the plug.
The big supermarkets are tough people to do business with, almost like Ford, but as above some manage it...
A logistics mate worked for a diary products company. They tried to get into a supermarket chain, and the sales team (of 2) got an appointment in their Leeds HQ.
HQ gave them a date and said 9 am prompt. Not being local (very south west), they asked for advice on a reasonable hotel, and the HQ suggestion was “only a few miles away” on the other side of Leeds. My mate ( from Wakefield) knows Leeds well said, “don’t stay there, you need to be MUCH closer to HQ”. They ignored him. Although only 3 miles away, they underestimated the traffic, Leeds doesn’t have traffic according to the southerners, and they missed the appointment by 2 minutes. HQ refused to see them. The next appointment was in 3 months’ time. All that way for nothing.
Another mate sold Border country top grade meat into top hotels and restaurants. It cost £6/lb to “grow” the meat, but he solid it on at £11-12/lb. One “yummy mummy” supermarket chain was buying everything they were allocated, even at that price. Another supermarket wanted it for their “finest” range, and the most they would pay is £5/lb, and that was all they would pay, and the buyer couldn’t understand why he wouldn’t sell it at a loss. Said mate got increasingly irate with their buyer until he asked him to leave with the second word as “off”.
Another one oversees a facility that makes cooked goods for all the supermarkets, a million a week stuff. He said Waitrose were then good people to do business with, but they got so much grief off the “finest” one, they were tempted to pull the plug.
The big supermarkets are tough people to do business with, almost like Ford, but as above some manage it...
Teebs said:
I sell to Supermarkets. I work for a market leader across several different categories which gives you some leverage..
If you're new and un-known, you really need to present why your product is different and incremental to their category - if, for example they've got 5 other brands that do a similar job, why would they introduce another product which would only steal sales from their current range.
Tesco et al have been reducing down their number of similar products (project re-set it was called) as they're trying to compete against Aldi and Lidl who have smaller more condensed ranges.
Booths are a good shout to start with, think of something unique and different for your 'pitch'. Also make sure you've got the basics covered beforehand, price points (why you've pitched at that price), retailer % and £ margins, promotional plan, new line details etc - they might be the basics but its the small details that matters..
Bingo. I work in the Sainsbury's Group (not in buying I might add) and from what I can imagine the coffee category is very well established and developed. You need to prove you have something different, something that extends the category, or you have to show better commercials replacing something already there. You cannot just say hey I am selling coffee lets have a chat, they are too busy for that.If you're new and un-known, you really need to present why your product is different and incremental to their category - if, for example they've got 5 other brands that do a similar job, why would they introduce another product which would only steal sales from their current range.
Tesco et al have been reducing down their number of similar products (project re-set it was called) as they're trying to compete against Aldi and Lidl who have smaller more condensed ranges.
Booths are a good shout to start with, think of something unique and different for your 'pitch'. Also make sure you've got the basics covered beforehand, price points (why you've pitched at that price), retailer % and £ margins, promotional plan, new line details etc - they might be the basics but its the small details that matters..
I would say look at each retailers current strategy and comms, often they will be pushing a message around something be it value or sustainability etc. and look to align with that. Also if you can, run some customer research with their customers, this adds a lot of weight to the pitch in terms of demonstrating what you are claiming.
It is a brutal world though, retailers typically run between 1%-3% profit margins so expect a tough negotiation. Good luck!
I do primary distribution for a living, from factory to warehouse & mostly from factory to supermarket warehouse, so industrial quantities of stuff & I endorse most of what's said above.
I have sat in many review & development meetings at Cheshunt, Leeds, Bracknell & elsewhere over the years & my overriding observation is that the big chains are very adept at taking bright graduates & turning them into complete arses. They know only too well their power & as noted, if you want loyalty, buy a dog. Again though, if you have what they need, you can ride the train all the way - by way of example, we do an own brand snack food for Tesco for one client, a wholly unremarkable niche product on the face of it & the weekly volumes it sells through are incredible.
So, if any of you guys are fed up with your logistics, hit me up
I have sat in many review & development meetings at Cheshunt, Leeds, Bracknell & elsewhere over the years & my overriding observation is that the big chains are very adept at taking bright graduates & turning them into complete arses. They know only too well their power & as noted, if you want loyalty, buy a dog. Again though, if you have what they need, you can ride the train all the way - by way of example, we do an own brand snack food for Tesco for one client, a wholly unremarkable niche product on the face of it & the weekly volumes it sells through are incredible.
So, if any of you guys are fed up with your logistics, hit me up
I have a friend who is a buyer for one of the large "ethical" supermarkets. He told us a story of a small family run firm who they basically blackmailed in to giving a one off cheque for £100k to them to carry on being a supplier. Zero guarantees of future orders but if you want to be considered you need to pay us this.
He gleefully told us this and reckoned it probably impacted the profits of the small company a lot. I dont shop there anymore and never will.
Supermarkets are a decent reason why this country is on it's arse in my book.
He gleefully told us this and reckoned it probably impacted the profits of the small company a lot. I dont shop there anymore and never will.
Supermarkets are a decent reason why this country is on it's arse in my book.
NorthDave said:
Supermarkets are a decent reason why this country is on it's arse in my book.
You may as well apply that logic to everything. From clothing retailers that buy in bulk and cheap from Asia to Pharma's who produce drugs that cure diseases but are sold at too high a rate for the NHS to afford so people instead suffer or die. coldel said:
It is a brutal world though, retailers typically run between 1%-3% profit margins so expect a tough negotiation. Good luck!
The irony is that all this is consumer driven. We all want to pay as little as possible for everything hence the success of Aldi and Lidl. This has resulted in prices being driven downwards over the last decade or so because that's what we want.There is however a downside to this if you are a supplier to any of these big retailers, many have been driven out of business as a result.
It's a hard world out there in retail land and it is of our own making. We are basically lazy so shop online and we want to pay nothing for what we buy.
Monkeylegend said:
The irony is that all this is consumer driven. We all want to pay as little as possible for everything hence the success of Aldi and Lidl. This has resulted in prices being driven downwards over the last decade or so because that's what we want.
There is however a downside to this if you are a supplier to any of these big retailers, many have been driven out of business as a result.
It's a hard world out there in retail land and it is of our own making. We are basically lazy so shop online and we want to pay nothing for what we buy.
Sssshhhh don't say that, its all those nasty coorporates out there that are at fault, we are all innocents in the decline of the high street remember There is however a downside to this if you are a supplier to any of these big retailers, many have been driven out of business as a result.
It's a hard world out there in retail land and it is of our own making. We are basically lazy so shop online and we want to pay nothing for what we buy.
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