Establishing cooperation with a commercial network is the Holy Grail for an entrepreneur. On the other hand, the power disproportion between the family business and the supermarket chain is colossal, which can lead inexperienced business owners to problems or even bankruptcy.
Is it worth establishing cooperation with a commercial network?
The answer to this question is obvious. In 2008, more than half of the trade in Poland took place in shops. Today it is less than 30 percent, and the number of discounters has almost tripled. The world of local wholesalers, independent retailers and small sales representatives is slowly becoming a thing of the past.
More and more often customers do not know about goods that are not on the shelves of some of their favorite chain stores. Although the Internet gives completely new opportunities to independent producers, joining the giant's offer also ensures reliable and high turnover. Even if you trade online, it is worth considering cooperation with a commercial network. With the expansion of Amazon or Chinese suppliers in Poland, it may turn out that it will become more and more difficult in your industry alone.
Get noticed - here's how to start cooperation with a retail chain!
The biggest surprise for Polish company representatives is that in retail chains, planning takes place 6-12 months ahead. This means that the product must meet the needs of customers in such a long term, and not, for example, a trend that is already passing. Very often, the first batch of goods is placed in one or several stores, and the decision on further cooperation is made only when the goods are sold. The mere consent to take up the talks does not mean that you have success in your pocket. It would be a very good idea to establish in advance the exact costs, expected profits, prices and scope of negotiation.
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It is a mistake to react to the offer of a network representative on an ongoing basis. Prepare your selling points and describe them enterprise competitiveness and add bonuses that others will not provide. More specifically, how to establish cooperation with a commercial network? It is worth participating in trade fairs, especially the largest ones in Poland and the region. Often it is there that you can meet representatives of the network. General recognition or presence in social media can also make a positive impression. You can also try to reach Lidl or Tesco traders by sending them traditional messages.
To have a chance of a reply, they must include:
- exact prices (gross, net, margin etc.)
- exact details of the company and contact person
- win-win offer
- a proposal of a maximum of a few products from the offer matching what the network needs.
In the past, indeed offers were limited to ordinary e-mail messages. Today, they are often professional letters written by a copywriter, with graphic design, links, photos and videos.
Problems during cooperation and how to avoid them?
A few years ago, British media wrote about the problems of employees of a large hypermarket. However, this is not a unique story, but rather a warning also for Polish companies that want to start talks with large chains. The owner of a food company was initially delighted with the collaboration with the retail giant. With time, the orders increased, and he got into debt to keep up with the production. When the representatives of the chain wanted to lower prices after one of the largest orders, the owner had to agree. The situation repeated itself, and finally the sale almost ceased to pay off for him. The representatives of the chain knew that the company would not find an outlet for such huge batches of goods in a short time and that it was practically financially dependent on the market.
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The entrepreneur burdened with the start-up loan could not actually withdraw. Store representatives, in turn, complain about a different situation. It happens that a smaller company does not plan any promotions, packages or special events throughout the year. In addition, the goods are there once, and then they are gone, and it is not known when it will be there. In this situation, the entire burden of planning sales support rests on the web. When establishing cooperation, it is worth having a content calendar, a plan for regular branding refreshment and rethinking marketing communication channelsto become a serious contractor. Remember that thanks to the cooperation with one chain, your product will be visible on the shelves of stores all over Poland. This may result in another cooperation.
Discounters - how (and whether) to establish cooperation with such a network?
Cooperation with discounters is a separate topic. A specific model is preferred here, in which the company produces to order the chain under its own brand. For a local company, it can be an amazing chance for a nationwide and even international expansion and gaining additional capital for development. Unfortunately, many companies also learned about the disadvantages of such a solution. One of the producers of iced tea has been supplying its products to the discount store for several years. Their quality was the same as the original, and the price - several times lower.
When there were few discount stores, and in Poland, local stores and delicatessens dominated, it allowed to earn extra thanks to an additional sales channel. The situation turned when the number of such chains began to reach thousands, and even delicatessen customers began to shop there. It turned out the brand cannibalized own product - most customers preferred to buy it at a discount at several times lower prices. The company's financial problems caused by this situation make it difficult to buy its products in any store today.
Price positioning if differentiation strategy in the case of cooperation with discounters, they are beyond your control, and a good-quality, exclusive product may therefore lose value in the eyes of customers (especially since the chain may push for cost cutting during production, which will also affect quality).
How to choose a retail network?
If you are wondering how to establish cooperation with a retail chain, you must first choose one or more of them. In some you will have to sign an exclusive cooperation agreement, while others will allow you to sell your products elsewhere in parallel. Do not limit yourself to the supermarkets themselves, because there are many more retail chains in Poland. You can choose from: networks
- discounters,
- hypermarkets,
- Polish stores,
- Polish local stores,
- small local shops,
- construction and interior design stores,
- bookstore,
- pharmacies,
- drugstore,
- electronics stores,
- clothing.
In order to find them, it is certainly worth moving marketing audit and check if you are able to cope with large orders while maintaining quality. Consultation with a specialist who knows how to start cooperation with a retail chain, even at the stage of cooperation, can save millions of zlotys, preventing common problems that the chain's sales associates must take into account.