By Thomas Lock, Founder, AP Brands
If you have a new retail product and starting the process of selling to retailers, approaching and negotiating with supermarket chains, can feel like a large mountain to climb. However, if you can get it right you could set your brand up for success.
Having launched four new snacks brands into the UK market over recent years and got them onto the shelves of a number of major supermarkets, I’ve gained some useful knowledge of the process. I hope you can learn from this, avoid my mistakes, and make your brand a big success.
Build market knowledge
You’ll have done some research into market, trends and competitors, but to be successful in supermarket sales, you need to understand your product category, inside out. Where your product will sit on the shelf? Which of your competitors are in each supermarket chain and what they’re doing? Are there any market trends to be aware of? etc.
With this information it will be easier to convince buyers of the longevity of your product and brand, and they’ll be more likely to engage with your business.
Know the customer and buyer
You need to think about your potential customer’s business as a whole and buyers as individuals.
Find out the supermarket’s buying window. Supermarkets plan their seasonal product ranges early. Summer sales are often planned the previous autumn, for example.
Next, turn your attention to the buyer as an individual. Research information about the buyer in advance. LinkedIn can be a good tool for this and will help you develop a clear idea of who you’ll be selling to and what they’ll need/want to hear.
Fully understand your commercials
It will be difficult to negotiate a good deal without all the key financial and logistics information in your head.
For example: your exact cost price, including delivery to the supermarket’s warehouse or warehouses; the average margin the buyer would expect on the type of product you sell, and what impact this will have on the potential retail price.
If you get this stuff wrong, even a little, you could hamper your growth forecasts with a cost that’s too low, or price yourself out of consideration with a cost that’s too high. Pricing needs to reflect your sales strategy while taking into account the various demands and requirements each supermarket will place on you.
Getting into supermarkets can be a process that takes months or even years. Make sure you build this into your forecasts and cash flow.
Invest in your brand
Promotions are a great way to gain new customers and boost sales. Supermarkets also tend to expect you to fund promotions several times a year and may charge fees for running the promotions or listing the products.
If you plan your own promotions throughout the year, you can factor these promotions into your financials and present them to supermarket buyers fully-formed. This will make your brand a more attractive proposition and ensure you generate the profit you need to meet your projections.
Know your listing argument
Buyers are approached daily basis companies wanting to trade with them. You need to be able to articulate clearly why the buyer should list your product over potentially hundreds of other products, and why consumers will pick your product over the competition.
Much of this will be based on your competitor and market research. If you can show clear USPs capitalising on a growing trend which no other brands are even considering, you’ll have a very strong listing argument. For example, my business, AP Brands, offers snacks without additives, most of which are also vegan. This capitalises on the healthy, vegan trend as well as the growth in the snacks market, providing clear USPs and a strong listing argument.
You need to have a thick skin and keep going. A buyer who say ‘No’ today may be interested in in six months’ time. Trends change, buying habits change, even buyers change. Ask for feedback from buyers (both positive and negative), keep an eye on shifts in the market, and, reach out to the buyer again when appropriate. It’s hard graft but persistence has its rewards. Good luck!
ABOUT THE AUTHOR
Thomas Lock is the founder and Managing Director of Awfully Posh (AP) Brands, a FMCG snacks company. Referred to by the Daily Telegraph as “the man who made pork scratchings posh”, Tom launched his pork scratching brand, Awfully Posh, in 2013. He soon launched a further three snacks brands, The British Crisp Co., The British Popcorn Co., and Create A Crisp, selling a total of over 5 million bags to date. AP Brands’ snacks are now stocked in supermarket giants such as ASDA, Tesco, Waitrose, Amazon & Wholefoods Market.