Building successful relationships with retailers takes time. As a brand or a contract manufacturer, it is a compliment and a great opportunity to be invited by a buyer to work with a leading retailer. It adds kudos to your brand, not to mention the potential sales and revenue you could generate. Securing a meeting let alone an order from a leading retailer, seems to take forever. Your ship has finally sailed, and it looks as if you are on the other side of the horizon, so realistically you should be feeling proud and content.
You may be thinking, but surely the entire point of building my brand and my business is to secure as much business as possible. Why would I possibly say no? As counterintuitive as this sounds, there are times when it is not financially viable or sensible to go ahead with a retailers’ order. Sometimes it is just not the right time. The order comes in larger than anticipated, your margins have been negotiated down, you are expected to fund promotions, your cash flow is now strained from having to bootleg the business for so long, due to timing and stock levels it is going to be a great stretch trying to deliver upon this.
Sometimes it is in your best interest to walk away. Whether you are pulling out of a promotion or even pulling out of a retailer due to not being able to come to a win-win agreement for both parties. I have worked with brands, who have been stretched over their limits, some have gone into liquidation. Looking back, at the time it would have been better to decline and pull out, saving brand equity by doing so.
Some cases in which it may be better to walk away:
When you are not financially secure. I have worked with suppliers who had to stretch themselves to fund large production runs or promotional campaigns, which have crippled their business, to the extent that they couldn’t afford to continue.
When you know that you won’t be able to deliver on time. The first step to building a stable relationship is ‘on time deliveries’, retailers detest out of stock situations and it is the supplier who carries the cost of the mistake not to mention they may be considered for ‘delisting’. If you are not able to deliver a required order on time, let the retailer know.
When you have had to sacrifice costs, lower margins or prices, you know you can’t feasibly afford to accept. As a new brand breaking into retail, it is exciting, it seems as if you have finally reached your goal however what comes thereafter can be far more challenging than you anticipated. You didn’t intend to negotiate your pricing down so far or accept lower margins, but somehow because it is a big retailer you have accepted this. This can have detrimental effects on your cash flow. Your cost prices and margins will constantly come up for negotiation and review with buyers, better to protect them from the word go and negotiate around other factors.
If you have recently launched your company, and are inexperienced in delivering large orders to retailers. If you haven’t delivered large production runs before, don’t hope for the best when the opportunity arises, particularly not with a prominent retailer. If something goes wrong, the goods are not approved due to quality control problems, or they are delivered late, the penalty fees and returns can be astronomical. Not to mention what this does to your credibility as a reliable supplier moving forward.
If you have placed all your ‘eggs in one basket’. In theory, exclusivity can be great. A retailer may ask you for exclusivity for a period of 6 months or more. There are benefits and drawbacks. Exclusivity provides you with stronger negotiating power for shelf space and promotional exposure however you are giving up control of building further retail relationships and how you market your brand for a period of time. Whilst many brands jump at the opportunity, think about this carefully. If something goes wrong with your delivery to that retailer, and you must take the stock back or it isn’t a success, where does that leave you?
Understand what retailers are looking for before you build and launch your product range, is elementary to your success. Ensure you do your market research thoroughly and understand your customer, your competitors and how you are going to differentiate yourself. You can save yourself a lot of time and money in the process.
Do you need help with planning your retail strategy? Get in touch today to discuss how we can help you.
We love partnering up with award-winning beauty and wellness brands, well-established companies, retailers, investors, trade bodies to bring your ideas to life. With over 60 years combined experience in building brands we know what it takes.
As a beauty brand consultancy, we support you in taking your business to the next level through strategy, brand management, product development. Introducing our 3 C’s – we draw upon years of Clarity, Creativity, Commerciality to deliver your results. We design brand identities and visual elements, create products, develop go-to-market strategies to help you to engage with your ideal customers. We work with you to develop a comprehensive strategy for your business by understanding your vision (and the marketplace) and then delving into the details to create order and structure, neatly packaged up to deliver you commercial results.
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‘As a Queensland-based company, we were determined to tap into the European market and establish a strong presence. From the very beginning, Bespoke Advantage demonstrated a deep understanding of our export goals and objectives. Their comprehensive knowledge of the European market, coupled with their extensive network of contacts, enabled them to connect us with key decision-makers and influential stakeholders in our target countries. Their strategic guidance and insights were invaluable in shaping our export strategy and positioning us for long-term success.’
‘With the assistance of TIQ, we engaged Bespoke Advantage to help us enter the highly competitive but lucrative UK market. During the last few months Janet and her team have worked diligently to introduce and expose Perfect Potion to buyers and retailers we would never have been able to reach being based in Australia.’
‘Janet has a wealth of experience across retail, buying and marketing. She conducted a full strategic review of our cross functional business and the travel retail market to develop a comprehensive buying and quality control strategy that was signed off at board level. I highly recommend her as an asset to any business.’
‘Through Janet’s management skills, expertise and proven track record on the job she successfully managed the purchasing of our retail operations and ensured the integrity of our brands in-stores. Her enthusiasm and total dedication, delivered results in any project she was involved in.’
‘Janet has excellent beauty market knowledge. Level headed with clear vision, direction and the ability to drive business forward, Janet led the teams through a complete product design change advising on what the key marketing messages should be, incorporating her technical knowledge and beauty expertise.’
‘Absolutely fantastic course. Condensed learning from Janet, an expert in developing beauty brands. Also, valuable introductions to expert professionals, in the Masterclass sessions. In 12 weeks, you will learn from Janet, what would take years to learn by yourself. A very worthwhile investment’