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This year we will sell over $100 million in hydration products at Target, Sam’s Club, and Walmart.
The most surprising part?
When I co-founded Simple Modern six years ago, I had zero experience in physical retail.
Want to sell into mass retail? Here’s what you need to know:
The most surprising part?
When I co-founded Simple Modern six years ago, I had zero experience in physical retail.
Want to sell into mass retail? Here’s what you need to know:
If you want to sell to a mass retail partner, the most important person is the buyer for your category.
Buyers are assigned a few categories in the store and are responsible for picking the product offered on the shelf. They are the gatekeepers.
Buyers are assigned a few categories in the store and are responsible for picking the product offered on the shelf. They are the gatekeepers.
It is nearly impossible to connect with a buyer unless you have a plan.
The reason? They are inundated with emails and calls from people who want to sell to them.
A Sam’s Club buyer once told me that she would receive several hundred cold emails a day from hopeful sellers.
The reason? They are inundated with emails and calls from people who want to sell to them.
A Sam’s Club buyer once told me that she would receive several hundred cold emails a day from hopeful sellers.
I have been fortunate to work with some exceptional buyers over the past five years. In my experience, they have a lot of responsibility and are promoted to the position because they have demonstrated excellence in merchandising, analytics, negotiating, and marketing.
The most consistent way to connect with a buyer is to work with a broker. Brokers are separate companies that help assist brands in selling to retailers. Many people that work as brokers have previously worked at one of the major retailers, often in a buyer role.
The best brokers are picky about who they will work with, and if they already have a client in your product category, they will not work with you. You will need to convince a broker that your product has merit and that your company is ready for the scale of mass retail.
Once you find a broker, they can help in several ways. They work to secure an initial meeting with a buyer to hear an initial pitch. They also help with account set up, replenishment, and relationship management. They earn a % commission from every $ in revenue generated.
If you can’t land a broker, you can try:
Cold Outreach – See above for challenges
Pitch Opportunities - Walmart hosts an “Open Call” where prospective suppliers can pitch their products to a buyer.
These can work but are long shots.
marketplace.walmart.com/open-call-2022/
Cold Outreach – See above for challenges
Pitch Opportunities - Walmart hosts an “Open Call” where prospective suppliers can pitch their products to a buyer.
These can work but are long shots.
marketplace.walmart.com/open-call-2022/
If you secure a meeting with a buyer, you are getting a life-changing opportunity.
Buyers have a ton of responsibility on their plate, so these meetings are usually 30 minutes with a hard stop. If you are lucky, you might get 45 minutes or an hour. It’s time to sell!
Buyers have a ton of responsibility on their plate, so these meetings are usually 30 minutes with a hard stop. If you are lucky, you might get 45 minutes or an hour. It’s time to sell!
Before the meeting, do your research on the buyer’s current shelf. Note the price points, brands, sizes, and ornamentation of the offered products.
Ask yourself: “Which of these products could my product outperform?”
Build your pitch around this information.
Ask yourself: “Which of these products could my product outperform?”
Build your pitch around this information.
You should also learn the average % gross margin the retailer expects in your category. Build a financial model that puts the retailer at or above that margin level. It is rare retailers will add a product with a lower margin structure than their category average.
Account for other fees like payment terms, defect & return allowances, marketing accruals, and brokerage commission. These are actual costs and are a killer financially if you don’t plan for them.
Bad unit economics at scale is disastrous.
Bad unit economics at scale is disastrous.
Mass retail is a zero-sum sales game, and for you to get shelf space, someone else will have to lose it. For that reason, you need to clearly explain why your product will help the retailer and customer win more than a product currently on the shelf.
Buyers have two goals when it comes to their product offering decisions:
1.Pick products that will drive traffic to stores
2.Pick products that maximize the sales and profits generated by the space they manage.
Build your pitch around how you can help them accomplish both.
1.Pick products that will drive traffic to stores
2.Pick products that maximize the sales and profits generated by the space they manage.
Build your pitch around how you can help them accomplish both.
First, four angles on driving traffic
Brand –Customers want to buy only our brand.
Functionality – We offer features that the current shelf lacks.
Differentiation – Our product solves the customer problem in a new way.
Value – We offer more quality at our price than others.
Brand –Customers want to buy only our brand.
Functionality – We offer features that the current shelf lacks.
Differentiation – Our product solves the customer problem in a new way.
Value – We offer more quality at our price than others.
Build your argument around data that supports your claims. Helpful data points include:
Brand Following (Social, Google, etc.)
Sales Growth
Sales History in Other Major Retail Channels
Online Product Reviews
Intellectual Property/Patents
Customer Surveys
Product Demonstrations
Brand Following (Social, Google, etc.)
Sales Growth
Sales History in Other Major Retail Channels
Online Product Reviews
Intellectual Property/Patents
Customer Surveys
Product Demonstrations
Second, you must offer a financial structure that allows the buyer to improve the economics of that category.
Think about mass retail as a real estate game. The buyer has a certain amount of property, and their job is to maximize the amount of rent generated.
Think about mass retail as a real estate game. The buyer has a certain amount of property, and their job is to maximize the amount of rent generated.
Retailers have four ways to grow their bottom line for shareholders:
1.Open new stores to capture more customers.
2.Take market share from their competition.
3.Charge higher prices
4.Increase margins through lower costs.
1.Open new stores to capture more customers.
2.Take market share from their competition.
3.Charge higher prices
4.Increase margins through lower costs.
