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Merchandising, Supply Chain Management

Tips for Negotiating with Retailers

Getting your product into retail stores can be a daunting task. Shelf space is valuable real estate, as countless vendors are competing for a slice of the same pie. It’s important to remember that retailers have their own objective, which is to drive revenue with the products they provide to consumers. The more easily you can prove to retail buyers that your brand will sell, the more likely they are to stock your product over a competitor’s. Keep the following tips in mind when approaching negotiations with retail buyers.

Delight Them With Data

Your primary goal during negotiations should be to exemplify how your offering can improve the retailer’s bottom line. The best way to do this is by providing buyers with hard data that highlights your brand’s proven track record and capability to handle, as well as harness, consumer demand. Concrete numbers and future projections speak volumes in comparison to mere words. The types of data suppliers can show to buyers include retail audits, information about past client visits, contact information for key personnel at a given retail location, custom forms, and purchase orders. These data sets indicate a supplier’s ability to prevent out-of-stock instances and maintain healthy relationships with clients, both of which present an advantage to retail buyers. Suppliers who use a field activity management software will have easy access to this data via the cloud.

Wayne Poggenpoel of Synergex suggests exhibiting the following information to buyers upon negotiating with them: who your competitors are, how your product will be displayed and promoted, and the security of supply chain continuity. As with the types of data mentioned above, showing your brand’s competence for risk aversion is seen as a strength in the eyes of retailers. Any data collected about past in-store promotional campaigns should be presented to buyers as well to illustrate how your brand’s marketing efforts were lucrative at other retail locations. In some cases, retailers may object to stocking your brand because they already carry a similar product. To combat this, provide them with research which reveals that customers prefer to have more variety in a store. This proves that having two options of a similar product can be good for retailers.

Be Open to Partnerships

Tweak Your Biz contributor Davis Miller writes in his article “5 Considerations to Change How You Approach Business Negotiations” that old negotiation stereotypes are no longer applicable in today’s business world. Having an “us vs. them” or debate-oriented mentality is antiquated. Instead, suppliers should strive to engage in a “business partnership” with retailers. Having a strong relationship with retailers is fundamental to achieving your company’s goals, seeing as they are a major player in getting your product into the hands of consumers. The overarching goal of negotiations should be to please all parties involved. To do this, your company should be willing to open up and share inside information with the retail buyer. This kind of openness will foster trust and encourage them to disclose more information with you as well.

Miller advises that it’s wise to have an established negotiation strategy, as it’s equally critical as any other business strategy. When approaching negotiations, be assertive and stand your ground. However, you should be willing to collaborate. If you are too aggressive in your negotiating, conflict could develop and hurt the relationship’s potential. As a best practice, try to develop a personal relationship with the buyer so your brand can be more easily remembered. Offer free samples of your product with no strings attached or deliver a handwritten thank-you note.

Miller also suggests presenting a “vision” of your business to the buyer. Instead of simply selling your product to them, sell your entire brand. There are likely to be thousands of products on the market that are not much different from yours; make your brand memorable. Try to pitch it as a concept or lifestyle rather than a company that just sells physical goods.


Compromise Where You Can

If a retail buyer isn’t willing to oblige to any of your requests, then it’s best to walk away. That being said, if there are some terms that are up for debate, your company should be willing to make reasonable sacrifices if it means getting your product onto shelves. Compromise can save business relationships whereas selfish, narrow-minded thinking can cultivate animosity.

You should do preliminary research to ensure that your brand’s product is competitively priced in comparison to its competitors. Propose to retailers that you would be willing to drop the prices on your products in exchange for more or better shelf space or more opportunities for in-store promotion. If retailers are opposed to compromise of any sort, it is probably better that you leave with no deal rather than committing to one that can severely hurt your business.  

Negotiating with retailers can be tough, especially for small businesses or emerging brands. Give retail buyers in-depth data that showcases your brand’s ability to perform. Try to foster a healthy partnership when you are in the midst of negotiating. Remember to stick to your guns in order to achieve a mutually beneficial deal, but be open to compromise when it’s feasible. 

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Victoria Vessella

Victoria is a Marketing Associate at Repsly, where she leads the company's P.R. and social media efforts. You can also catch her prepping for slew of exciting industry events. A New England native, Victoria has spent time living in Italy and traveling throughout Europe before settling back in Boston. When she's not planning her next trip, V is probably tasting wine or brushing up on her Italian.

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