Selling to Large Retailers

This article is a follow-up to Selling to Large Retailers: How to Survive and Thrive Without Losing your Shirt

The Sales Process

Buyers for large retail stores may be working with vendors at the national level, or at a regional level – which could be the best way for you to get entry into that retailer.  Since you have limited production capabilities, it will probably be a better fit.  It also allows the retailer to test out your merchandise in several stores before making a bigger commitment.

It may also be that your products are only appropriate for certain demographic areas. I highly encourage small businesspeople to meet with a regional buyer, or even a store level buyer, if they have the latitude to place orders. You will need to be an approved vendor, which can be a process in itself, so go in with that understanding.

Of course, large retailers have a lot of pull because of their size, and they expect to get great pricing from their vendors. Know your absolute lowest price when entering into negotiations with any buyer.  You will need to understand their expectations on returns, terms for payment (they may want 2/10 which gives them a discount, or Net 60 or other special arrangements), and dates they need your merchandise in their stores.

Large retailers vary considerably, so there is no hard and fast rule to go by. You will most likely be told how they place orders, and what their requirements are. If you are not willing or able to deal with these, save yourself a lot of headaches and decline the order.

Receiving Departments

As a rep, whenever I called on a chain store, I would sign in as a vendor to let the manager and staff know that I was there. But I usually didn’t search out the store manager first. I would head right to my favorite part of the store – the Receiving Department.

The Receiving Manager is a really good person to know, because they handle incoming deliveries from UPS, Fedex and tractor trailers that back up to their loading docks all day long. These are the people who control the flow into the store, and enter deliveries into the computer, which lets the managers know what merchandise is in. These are all kept track of by Purchase Order number, which is why that magical number is one of the most important pieces of information you need when communicating with a store. Plaster your P.O. number on every document you send, on the outside of your boxes and refer to it in emails.

Small businesspeople like yourself, who don’t have a rep force or merchandisers working for you, won’t be normally walking into the receiving department of a store, but it’s good to know how this area works. It can be controlled mayhem. Receiving often has boxes stacked on shelves nearly to the ceiling. There are usually quite a few people working in Receiving, who check incoming orders and funnel them to the store staff who will be stocking the floor. Other stock rooms are often used in departments of the store holding merchandise waiting to go out.

Display Racks

If you offer display racks for your product line, they will often be drop-shipped from the rack manufacturer to the store separately from your order (with that all-important P.O. number on the box!) to match up with your merchandise when it arrives.

Racks can get damaged, lost, or thrown out by accident sometimes. Things happen, so you should have a big picture view of possible costs and hassles before you write those orders and ship them. Receiving staff is often easier to reach than managers, and they can give important information about shipments that have or haven’t arrived. On the other hand, you won’t be making a bunch of calls to individual stores you are doing business with. You would usually speak with the buyer’s office with concerns about orders, and they will connect you with the right people.

Contacts

Since buyers can be hard to reach, make it a point to get to know their assistant. They can turn out to be the best friend you have at the chain. The assistant can often dislodge a log jam, get you important information, or make sure the buyer calls you back. They can also get you appointments to meet with a buyer, so understand and respect their value.

Even if you ship on time and you believe the stores should have your goods, it doesn’t mean that all of your work is going out on a certain day – or a certain week. All stores are different in that their layout or sheer size varies. So you don’t usually get a cookie cutter space and display all the time, even though stores use “planograms” which are like maps of their stores with product areas and layouts that make sense.

Returns

These can be a plague on your small business. Returns of merchandise that has been damaged, unsold, or returned by customers can wreak havoc on your bottom line. Make sure you have a clear understanding when your orders are written of what the chain can and may return to you for credit. This is one reason you need to make sure your prices are giving you enough buffer to earn a profit and not go broke when things happen.

Trunk Shows

One way that large retailers work with suppliers is to allow them to appear at trunk shows. This can be a fantastic opportunity to interact with retail customers, bring merchandise to sell that isn’t in the store stock, and earn extra money – you will most likely be paid your wholesale price for any trunk show sales you make. It allows the retailer to promote events and appearances, while taking no risk. My experience doing trunk shows was that they were well worth the effort.

Summary

This is by no means a comprehensive look at selling to large retailers, but a taste of what it takes to get involved with this type of account. Sometimes only one of your items is chosen by the buyer. Other times, you get a limited run and a chance to sell a large quantity for a short time period. Still other creative entrepreneurs deal with chains quite frequently and have made that type of relationships a mainstay of their business.

 

Have you sold your work to large retailers? What was your experience?