One of the biggest misconceptions from food and drink entrepreneurs is that once you’re on shelf, once retailers start selling your product, life will be easy. After all, that’s what they have often spent years working towards.
But in reality, that’s when the work really starts. Here’s what you need to be prepared for.
Understand that shelf space is a limited resource
The only way that your product can get listed by a retailer is by reducing or removing the space occupied by another product. For you to win, somebody else has to lose.
For a retailer or a retail buyer, taking on a new product is a risky thing to do.
They will have to remove or reduce other products with a proven track record to make space for your product. To help them, supply as much information as you possibly can.
- If you have previous sales data, share it, whatever the source. For example, if you previously sold at a farmer’s market, use your sales data to demonstrate that your product resonates with consumers.
- Let them have free fills (free product) to get you launched. That way, you’re demonstrating that you are willing to share the risk and have confidence in your product. Depending on the store, and the size of the opportunity, you may want to offer 100% free products or a discount ranging from 50% to 25%.
Have a promotional plan at the ready
Retailers will expect you to support your products. While they are taking care of the actual sale, the sales support will continue to be your responsibility.
Apart from wanting to see a marketing plan, you will also be asked for a promotional calendar. The expectation is to block out periods of time at least twice per year during which your products will be available at a discount, typically between 15 and 20%.
At my own company, Auralis Botanical, we run two promotions per year, but we also constantly communicate with retailers to see if there are opportunities to create promotions together. For example, we provided a cash prize to a small chain of retailers so their staff could have a display contest using our products, or we offer a discount on a palette buy.
In addition, you will be expected to support your brand to consumers directly. We use feedback from our fans as UGC (user generated content) on our sales sheets, helping us to secure new accounts.
Merchandize, merchandize, merchandize
Merchandizing is how your products are showing up on the retailer’s shelf. While store staff will place your product, they are looking after the entire store and have no special interest in making your product look its best.
A good merchandising policy will help you with this. A merchandiser goes from store to store, making sure that your products look as good as they can. In our case, they make sure that all cans are facing forward.
When stock on shelf is running low, they check in with the store manager to make sure that product will be refreshed. When they see an opportunity for our drinks to be displayed at a secondary location, they will ask for permission to place them there. They will also make sure that reorders happen in time and that we’re at the top of the list when it comes to marketing opportunities.
Good merchandising can boost sales and create ongoing opportunities for your brand and products.