Getting your E-commerce Product Onto the Shelves of a Major Retailer
Your products are selling consistently through online channels, like your website, social media, and third-party platforms like Amazon. You’re consistently growing at a sustainable pace and your KPIs indicate you’re firing on all cylinders. It’s time to take your business to the next level. Getting your products onto the shelves of big-box retailers gives you the opportunity to boost your sales and profits, improve brand awareness, and prove the credibility of your products. It’s a dream of almost every entrepreneur: to see your products sitting on the shelves of your favorite retail stores.
But getting your small business products into major retailers is anything but smooth sailing. Competition is fierce, and these retailers reject the vast majority of submissions. A diversified omnichannel approach should be your goal. That means meeting potential customers where they feel most comfortable purchasing your goods. That may mean taking the step to get into the brick-and-mortar business. Here are a few pointers and pitfalls to avoid to get your e-commerce brand onto the shelves of a major retailer near you.
1. Meet the Standards
You’d be surprised how many companies and products don’t meet basic standards and requirements to sell in big box stores—even if they aren’t aware of it. And not meeting even one standard can have you disqualified from all box stores—temporarily or permanently.
So don’t cut yourself out of the game before you even start. Know your industry’s standards and regulations as well as the specific retailer’s requirements. For example, Walmart requires that all of its vendors carry product liability insurance. Most box stores require unique UPCs for each product. You also need to meet all FDA standards, and some retailers may even require a factory audit and inspection. Sometimes the regulations seem so minimal, but they mean a lot to big-box retailers who can’t take any chances of a problem.
There are two ways to ensure you meet all standards before approaching a box retailer:
Hire an operations manager and/or inspections officer to maintain factory and production standards.
Bring a lawyer onboard to review industry regulations and contracts, especially with regards to liability and business proceedings.
2. Always Stand Out
Those big box retailers sell 10 national brands of toothpaste that are all, in essence, the exact same thing. Your toothpaste just isn’t going to make the cut unless it offers something majorly unique.
What differentiates your product from its competitors, especially top-name competitors? What’s your unique selling proposition? You want to emphasize your USP when selling to consumers as well as applying to retail stores.
For example, you sell toothpaste that’s flavored like your favorite desserts. It’s not just flavored toothpaste. You market this as the toothpaste you use after you finish a meal so you won’t feel the need to indulge in dessert. Your toothpaste cleans teeth and helps with your diet. The product itself is unique, and the usage of the product is even more distinct. This kind of unique approach is what will make your application stand out to retailers.
If you create a product that people will remember, you’re more likely to gain the attention of big-box retail representatives. If your product isn’t unique right now, maybe adding a more distinct selling point could help grow your sales anyway.
(Another way to demonstrate your product’s uniqueness is to build your following, which we’ll go over in #6.)
3. Diversify your Product Line
Most major retailers will start by buying one or two of your products, but they want to see that there’s potential for you to grow with them. Offering a product line shows the retailer that you’re credible and committed, but it also tells them that they can eventually have a more profitable relationship with you if your products do well. They want to be able to partner with you for the long-haul if you do well, and that means bringing in more products in your brand.
Bringing in new suppliers, like you, is a high acquisition cost for major retailers. They’d prefer to offer a lot of products from the same core brands than a lot of one-off products from unknown brands. They likely won’t buy your entire product line at first, but it will make you a more appealing candidate during the application process.
4. Perfect your Packaging.
Big box retailers place a premium on quality packaged goods. They want their shelves to look gorgeously varied. They want to offer their customers a lot of different packaging and products. So don’t be afraid to take a walk through the retailer’s aisles to see where your product would visually fit in.
For example, all of the toothpaste boxes appear to be blue or purple. Make your toothpaste packaging bright yellow and you’ll have a better chance of standing out on the shelves.
Box retailers will also consider where your product would be placed on a shelf. Eye-level shelves tend to get the most traction, so these are reserved for the best sellers. Since you’re a small brand, you’ll usually end up on the top or bottom shelf at first. So keep an eye on these areas and design packaging that will outstand amongst the other design competitors.
5. Provide Proof of Concept
Retailers don’t take chances. They get submissions every day from small businesses with the “big box dream.” The first thing they look at is your sales track record. How much have you sold in total? How much have you grown in the past year? How much are you predicting to do on your own website?
These retailers want to see consistent, legitimate growth. Revving up your sales this month just to apply to the stores isn’t going to look good to them. They want to see an ongoing upward trend over a period of time. These big box stores are hesitant to get onboard with fads, so they don’t want to see sporadic sales.
A great way to prove your track record is by selling through that retailer’s online platform. Selling successfully on Walmart.com will give you added leverage when you try to make the jump to an omnichannel approach.
Additionally, they’ll look at your operations capacity. If you have no plans to slow down your website sales, they’ll wonder how you’ll scale to meet the increase in sales. You need to show them that you not only have a proven sales record but that you can logistically scale in the future at the pace that they need to meet their customers’ needs.
6. Find your Tribe
Another way to prove that you’re a valid, credible business is through conversion oriented online interaction and a loyal fan base that powers it. It’s hard to create a totally unique product. What makes you unique is the customer buying your goods.
The retailer wants to gain more customers by bringing your products onboard, so proving you have a loyal following tells them that they’ll start gaining traction within your audience. The fans that once bought your products online might stop in the retailer’s local store to pick up your product (and end up buying other items in-store too).
A “following” is more than your social media likes and follows. Rather, you want to prove social engagement and repeat purchases. This tells big-box retailers that you’re a legitimate company with a loyal fan base who will follow you into storefronts. Metrics that prove brand loyalty:
Number of repeat purchases
Total sales from repeat purchases
Number of referral sales
Check out this awesome Forbes article about building brand loyalty.
7. Know the Retailer’s Audience
You’re wasting if you aren’t sure your product is right for this retailer. Every retailer has its own audience, operations, and product type. You want to be aligned with their brand and their demographics so your product actually sees sales.
For example, Costco tends to attract a mission-driven customer who is looking for national brands in large quantities. Target attracts a browsing customer looking for unique goods in smaller quantities. If you’re a larger brand that makes money on volume sales, Costco might be the right market. If you’re a smaller brand with a high price-point, you might perform better in Target.
You also want to consider the brands that the retailer already carries. Does it carry a lot of your major competitors and even some of your minor ones? Does it have strong contracts with certain brands to promote those products over others? You don’t want to put yourself in a situation where you can’t ever become a priority because the retailer has contract promises to your competitors.
Perform market, product, and competition research before considering expansion with that retailer.
8. Have a shark on your team.
Negotiations with major retailers are a tricky business. Even the most successful business owners can get railroaded by successful box retailer representatives. You don’t want to just look at the cost or profit margins when coming up with a plan to get your product in stores. You want to be aware of the control the retailer will take of your branding and marketing, the way they’ll place your products against the competition, and the requirements to retain your product in-store.
It might be worth your while to bring a professional on board, full time or part-time outsourced, who has experience negotiating contracts with retailers. They’ll help you get the most out of your contract without shutting down the rest of your business.
Never give up total control to a big box retailer. Keep your brand in-house as much as possible.
If you don’t see success getting your products into major retailers, it’s not the end of the game. Big box stores aren’t the end-all-be-all of a business. The main reasons you would want your products on their shelves is to spread brand awareness, increase your reach, gain credibility, and boost your sales.
If you’re not seeing traction with major retailers, you can get these same results through other avenues of growth. For example, foreign expansion is a strong way to get your product out there and infiltrate new markets. You’re spreading your brand name while bringing in fresh customers and sales. International companies also have a higher level of credibility in their industry, which can help improve your sales at home as well. After you expand a little yourself, you may also be able to prove your track record when you revisit the big box stores.
Check out these resources for global growth here:
Another option is simply to get your products in any store. Consider looking into wholesaling your product to boutiques, doctor’s offices, spas, gyms, coffee shops, or any physical location with a retail side. This opens you up to new business and sales while also proving your viability on a smaller scale.
The Bottom Line
Getting your product into big-box retailers takes time, strategy, and determination. But these retailers are willing to bring in small e-commerce companies with strong branding in the hopes of increasing their foot traffic with your loyal customers.
It’s completely possible to see your product in stores next to top national brands. The entrepreneur’s dream is at arm’s length; you just have to reach out and grab it.
Have you tried getting your products in retail stores? What has your experience been? Let us know in the comments below.