Selling to Large Retailers

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How to Survive and Thrive Without Losing Your Shirt – Part 1

By Carolyn Edlund

 

 

 

I received a phone call a while back from a gentleman who wanted a consultation about developing his greeting card line and launching it into the marketplace. At one point he mentioned, “I’d like to sell to Walmart.”

This was a bit of a leap for a newbie, but since there is a lot to know about dealing with national retailers and chain stores, I’d like to take some of the mystery out of it. While I’m not recommending that you approach Walmart, I’d like to address the process of selling to large retailers, and how you may be able to do that to grow your business.

My own experience, both as the owner of a production handmade jewelry studio selling to several national accounts, and as a manufacturer’s rep calling on and servicing quite a few chain accounts, has been eye-opening. There is a huge difference between working with a small independent mom-and-pop retailer and entering the world of corporate buyers.

So, will you make a fortune, or lose your shirt? Can you handle the volume? Will you be able to deliver, grow and make a fantastic income? Or will you crash and burn, trying to pick up the pieces of your former small business and swearing off selling to the big leagues forever?

 

First, get ready.

Before you even start thinking about soliciting large retailers, you need to have a solid product line that is priced profitably at wholesale. You will also need adequate access to suppliers, whom you will be buying your materials from – also at wholesale. Arrange to get credit terms with your suppliers, so that you don’t load up your credit cards with charges for those supplies, and then wait for months to get paid by the chain (90 days or more is not uncommon).

You need to know that your materials suppliers can provide large enough quantities to you relatively quickly. A backup supplier should be secured as well. A lack of supplies leading to your not shipping on time could mean your orders are cancelled, sending you back to square one.

You must have the capability to produce volume from your studio, or to be able to ramp up quickly due to demand. Make sure that you have systems in place to allow for scalability. You’ve got to be flexible and prepared to produce and ship large orders, on time. This leads to the topic of hiring either employees or independent contractors to help you, which is another article in itself – but something you must be prepared to tackle when the time comes.

 

What about your existing business? 

If you have existing wholesale accounts, it probably won’t surprise you that they might not be pleased to hear that your work is selling to large chain stores. This can take the desirability right out of your line, so you need to be prepared to deal with it. One suggestion is to offer a slightly different product line to chains which won’t compete with the line your independent retailers are carrying. It’s not uncommon for a small business to produce separate collections, with different labeling which won’t be confusing for shoppers and will protect their independents.

I would caution entrepreneurs to think carefully before throwing your existing book of business to the wolves, even if you do land a big order with a national chain. Your order may be a one-off, and your chain store business can vanish as quickly as it was obtained. Most small businesses need the stability of a diversified customer base.

Years ago, I met a woman who owned a jewelry company with a huge volume of business going, but only one account. If her products fell out of favor with that national department store (or if the buyer she was dealing with was replaced), she could be out of the chain and out of business very quickly. Obviously, her entire job was to make this retailer very happy, sell tons of product, and continue their relationship.

 

Corporate Buyers 

So, how do buyers for large retailers find products which they would like to carry in their stores? They certainly go to trade shows, and if you plan to go that route, you should consider finding a show that closely matches your niche to be able to connect with the right buyers. You can also check with the list of buyers on a trade show website if that is available.

Chain buyers also meet with sales reps who give them presentations on different product lines. These reps are called “national sales reps” because they work with large national accounts, as compared to “territory reps” who work in designated geographic areas. As a small entrepreneur, it is unlikely that you would have a national rep unless you found someone experienced who was working for themselves and agreed to represent you to some of their connections in the world of corporate buyers. I personally only know of one rep doing this, while he was in between jobs and willing to be a hired gun for the right manufacturers. Most of his clients were importers.

Another way to connect is to go to an open call for small lines with a buyer who is designated to meet with micro-businesses (like you!) I landed a big chain account this way, attending a one-day “meet the buyer” event. About thirty potential vendors were herded into a room and allowed to set up a table display. We were excused while the buyers considered our lines. Upon our return, a Purchase Order form on our table meant an order would be placed.

To find out whether this type of opportunity may be available at a chain prospect you want to reach, check with a local store or their corporate headquarters. An artist I recently worked with met with a buyer at Henri Bendel at this type of event. Do your research to find out whether your targeted retailers offer this type of opportunity.

Next week: How Chains Work and How You Can Work with Them

 

Photo credit Mahjabeen Mankani

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Comments

  1. Thanks for this information. I was fortunate enough to sell my designs and products to a few different national chains over the years. However, in each instance it was more luck than solid planning. How do you find out about open calls?

    Thanks.

    • Stacey, I would suggest contacting the regional buying office of chains that you are interested in to see if they have such a process. You might also check out LinkedIn discussion groups and ask this type of question. There may be groups that cater to large retailers, where you can find out more about their buying philosophies and how their businesses work.

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