How to Sell to Major Retail Chains, a Detailed Guide for Wholesalers

An industry proven, detailed, step by step guide for wholesalers on how to sell their products to major retail chain stores.

Stick to your follow ups!

Background

Selling to the majors is not hard! 

An account with a major retail chain could have a huge positive impact on your business.  Before I started dealing with the majors, I was intimidated.  Why?  Because I heard and thought things that scared me:

You could go bankrupt dealing with a major.

Majors are too demanding and have expensive chargebacks.

You need an inside connection to get the buyer’s contact information.

Good luck getting in touch with the buyer, it’s impossible to get a hold of them.

You have to schmooze, give them lots of gifts and maybe even bribe them.

I was completely wrong and there is nothing to be intimidated about.  These ideas floating around in my head were simply not true.

Note about gifts

To my surprise I didn’t feel any pressure regarding excessive gifting or kickbacks.  I’m sure it exists in some corners of the industry, but I think not as much as in the past.  In fact, I had to sign agreements saying that I would not offer gifts to the buyer.

Skills

• Service oriented positive attitude.  The product is only one piece of it.  Before and after the product ships, it’s all service.
• Persistence.  You will need this and patience to go along with it.  It’s usually a long, but rewarding ride.
• Organization.  The buyer has a million things to do, so you don’t want to waste their time.  Make sure you have physical and electronic systems in place to help you here.
• Effort.  Don’t cut corners and be detailed about things.  Show them that you’re willing to do the work to get the business.

Track your progress and activity

This sales cycle is long so keeping good notes and tracking your activity is important so you can reference back instead of relying on your memory.  I used a custom CRM tool that we developed in the back end of our website.  If you don’t have CRM software, then get one, or use a spreadsheet, Outlook, physical notebook, whatever.  Just make sure you track how things go.

Fit

Before you start doing any work, be sure you really want to do business with this customer.  If it’s not a good fit for your business and you end up winning their account, it could get ugly.  Some things to consider:

• Can you handle the order quantities?
• Do you have the financial capacity to sell to them?
• Can you commit the resources to making sure there orders are processed correctly?
• How will doing business with them affect things with other existing customers?
• Are your internal operations fit to handle doing business with them?

Research

Doing research will save you time and money.  It will also give you credibility in the eyes of the buyer.

Go to their website and read their “About Us” pages.  While you’re there try to find out how many stores they have.  It will give you an idea of quantities they will need.  Next, do some internet searching for relevant news.  It happened to me once that the company I was selling to was recently bought out by a large company who carried a lot of what we did.  Thus, most of the products I pitched were of no interest.  If I had known beforehand, it would have saved a lot of time.

Next, go into one of their stores.  Here you will learn a lot.

• Which of your competitors are already selling to them?  Which products? What are the retail prices?
• What kind of quality and price point are they selling?  Who is their target consumer?
• What kind of retail displays and fixtures do they use?
• What else is relevant to my offering?

After the store visit, you should know which items you want to sell and why the buyer will want them.  You should also have an idea about their markups and how much they pay your competitors.  Record this information in your CRM tool to help with your presentation and quotes.

Contact

Note:  For simplicity, I refer to buyers, buying teams, assistants, etc. as the “buyer”.

This is where patience and persistence come in to play.  First thing is first – get the buyer’s contact info.  Counter to what I thought, this is the easy.  Simply call corporate reception!  Now getting the corporate phone number might take a bit of digging.  One of these methods should get it for you.

• Check their website.
• Google search for “XYZ Company corporate head office phone”  or similar
• Call their customer support lines.
• Email their customer support.  When I email, I ask for the buyer’s contact info, not just reception.

Once you have reception’s phone number, call them and simply ask for the buyer of the product category.

Tip:  Make sure you ask for the name, address, phone and email of not only the buyer, but also the buyer’s assistant if they have one.

99.9% of the time (ok this may be an exaggeration!) you will get the buyer’s voicemail.  Before your first call, know exactly what you want to say in the voicemail message.  And if they pick up your call, be prepared for that too.

My first voicemail is simple and to the point:

Good morning, my name is Sundeep Gupta from ABC Company and from my research, I believe we carry products that can enhance your product offering with our widget line.  I will send you an email with my contact details, but just in case, my phone number is 444-444-4444.  Thank you for your time and have a wonderful day.

The reason for emailing them is to make their lives easier and to provide a record of you.  Your voicemail will probably get deleted, and even if they write down your phone number, it could get lost.  Email saves them work and gives them an easy way to find you and respond to you.

Keep the email short, but it’s a good chance to mention a differentiating factor about your offering.

Subject: Widget Vendor ABC Co.

Dear Bigbox Buyer,
As promised in my voicemail, below is my contact information.  ABC Co. has been specializing in widgets since 1954 and is the only widget company who can visit your stores to display and replenish stock on a weekly basis.  I will have the office send a catalog to you for further information.

I understand you are busy and if I don’t hear from you, I’d like to follow up in 3 months.  If it is too early, please let me know.  Thank you for your time.

Sometimes reception won’t give you the email address, so simply send your catalog with a typed letter.  If you don’t have a catalog, then send the sell sheet or brochure or some other document that showcases your offering.  I never send samples to start (unless they are very small in size) because buyers have loads of samples and probably don’t have room for them.

Follow up

Make sure you follow up when you said you would.  This will help establish that you do what you say and consequently build trust.  I generally follow up every 3-6 months unless the buyer tells me otherwise.  I alternate between phone and email follow ups.  If I’m already in discussions with them, or it’s important, I’ll sometimes I will phone, and then email to summarize and provide record for them.  If there is any relevant news to share like new products or features, I always mention it with photos in an email.

This may go on for months and maybe years.  They will eventually want to see your product as old relationships may end, or they may want to try something new.  Moreover, your company will continue to offer new and better products.  Stick to it and you will eventually be rewarded.

Response

This where your patience and persistence pays off and now you can focus on business.  There is usually back and forth with regards to the products they are interested in.  They will eventually want photos, samples, and will have you come into present the products in person.  It could be in any sequence.  When they are serious, they will ask you for a photo quote.  This could all take months again, so keep patient and keep following up if it drags out.  Put entries in your CRM tool or calendar so you don’t forget about it also!

Tip: Do things in such a way that minimizes any extra work or time for the buyer.  For example, if you send samples of 3 teddy bears, clearly label each bear with relevant information like item code, weight, etc.  Polish it off with an email with photos and product details in a nicely laid out document so they have a soft copy.  You don’t want them to have to ask you for information that should have been there in the first place.  It wastes time and doesn’t look good on you.

Presentation

This is my favourite part because you get the meet the buyer face to face and show them the products you are so proud of.  You only get one shot at this, so prepare!

• Do some quick online research for company news and changes
• Visit one of their the stores again to update yourself on competitor and product information
• Select the items you plan on presenting (if they haven’t specified already).  Show them additional products, only at the end and if there is spare time.  Remember, you don’t want to waste their time.
• For the items you’re presenting, have an idea of the price you would sell it to them for because they may ask you.  If they do ask, give them ranges, or let them know they are only reference prices and that final prices will depend on quantities and terms.
• Don’t be late and don’t go over the allotted time.  If you’re not finished in time, make it clear that you want to keep your promise and respect their time.  Continue only if they insist.  You can always make another meeting or finish over the phone.

Quotation

This is where your previous research comes in handy.  Majors expect very sharp pricing as they should seeing how much volume they buy.

[service title="Warning" icon="http://www.enhancetrade.com/wp-content/uploads/2012/01/red-warning-sign-Custom.jpg" size="24"]Do not quote until you have all of the relevant information.  If you need to quote with incomplete information, be sure to qualify it by saying the prices you are quoting are net of all discounts, rebates and costs associated with the final vendor terms.  [/service]

Here is a list of items you will want to consider before quoting:

• What is the approximate order quantity per item?
• When do you expect to place the order, and when will you want the shipments?
• What discounts (rebates/discounts/returns/markdowns/etc.) are taken?
• What are your payment terms?
• Are goods shipped to a central warehouse or directly to the stores?
• Who pays the freight?
• What is the shipping process? (They will usually have a shipping guide document)
• What chargebacks should I be aware of?
• Does the product need to be re-stickered (with prices/codes/etc.) before shipping?
• From our selling price, how much markup % do you expect?
• Do we need to subscribe to a 3rd party billing service? If so, what is the cost?
• What other vendor terms should I be aware of?

Don’t be shy to ask them for this information.  They will understand and should expect it.  If you quote them without all the facts, it will slow things down later and may hurt the relationship.

Legal

There are contracts involved when selling to the majors.  Vendor agreements (VA), shipping guides, insurance, and other things may come into play.  Read each document carefully.  If something is unreasonable or strange, have it changed.  Don’t be timid about it, this is business after all and it should be a win-win deal.  Remember, they also want to do business with you.

Execution

Congratulations, you received the PO!  It’s time to deliver what you promised in a smooth and timely way.  If things change before delivery, notify the buyer immediately.  This is will help sort out any potential issues early on, but also shows the buyer you care and are pro-active.

After the order has shipped, follow up with them to see how things went.  Try to get feedback so you can improve your sales process for next time.  What did they like about dealing with  you?  What could improve?  It also shows them that you are truly interested in a long term relationship and that you want to  satisfy them in every way possible.

Service Matters

The less work for them, the better for you.  So, do as much as possible to make their lives easier.

For more tips, this article has some good information as well.  Sell Your Products to Major Retail

This guide is purely written based on my own experiences and what worked for me.  I would love to hear from industry veterans as to what works best for them.