Getting Started as Retail Supplier
So you want to become a retail supplier. The first thing you’ll want to do is your research. And there’s a lot of it. But, many suppliers get turned down for contacts (and loans) because they simply aren’t prepared. So, the research should be worth it. Here’s how you can start preparing for your first retail supplier contract:
1. Research the companies you’re looking to contract with
Knowing your strengths as a business is key, but in the case of supplying to retailers, it can be even more important to know how your strengths as a business can specifically help the company or companies you are targeting. If you don’t do your research on the company, how can you know if you’re even a good fit? It takes a lot of time and resources to go after contracts with a retailer, especially a big-box one, and you’ll want to make sure you’re making a wise investment for your company by going after retailers that will be interested by and excited to sell your product. After researching the business and their needs, you should have a clear picture of how your product fits on the shelves and why your business, specifically, would be the best choice to supply it to the stores.
2. Know Your OWN Business
Of course, you can’t just do research on other companies, you also should take a hard look at your own company. Determine things like price minimums, wholesale prices, suggested retail prices, shipping costs, packaging specs, payment terms, how you handle returns, and other details like these, even before you seek out a contract. When you begin negotiating, you’ll need to have these numbers in mind and be able to back them up, especially if you’re contracting with a retail giant.
For example, in the retail world – generally speaking – your wholesale price will be double what your cost is and your retail price would be double what your wholesale is. So, if your cost is $10, your wholesale price would be $20 and your retail price would be $40. Payment terms for these sorts of contracts are typically 30 days by check, but some companies offer discounts to those that pay with credit cards. You’ll need to know if you’ll be willing to offer these sorts of discounts, and what payment terms you’ll be comfortable with.
3. Take Advantage of Certifications
Is your business woman-owned, minority-owned, or veteran-owned? If it is, there may be contracts out there that have been set aside specifically for companies like yours. Many retailers, particularly big-box chains, set aside contracts for business with minority certifications. Having your certification doesn’t guarantee you a contract, but it can certainly help. Retailers like Walmart, Kroger, and Macy’s are just a few that are looking specifically for certified suppliers. One approach is to consider getting certified by the following organizations, and then seek out companies that set aside contracts for businesses like yours.
You can visit our diversity certification guide to learn more.
So you want to become a retail supplier? Follow these three steps.