Selling to multiple retailers…a few words of warning from an FMCG* National Account Manager

Congratulations, you have got your appointment to meet the buyer at one of the UK’s multiple retailers!

This is your chance to pitch your product and get that much needed exposure to volume sales. But hang on a minute…better make sure you have your survival kit ready!

Like shoppers, buyers may have a ‘shopping list’. You may be expecting that you need to offer them a certain percentage profit margin but here’s a list of some of the sneaky added extras you might get asked for. Let’s hope you haven’t quoted on a tight margin for yourself or you could become one of the many suppliers who are ‘busy fools’!

• Margin requirement * (source: buyer / other suppliers)
• Payment terms (number of days from date of invoice / month following etc)
• Distribution (central warehouse / direct to store etc; pallet / container quantities)
• Overrider discount (ORD) (guaranteed / targeted growth – check typical percentage for sector)
• Loyalty bonus
• Settlement discount
• Damages allowance
• Listing fee
• Residuals policy
• Loss of profit fines for shortages etc
• Advertising
• Promotions
o annual fee / contribution
o off invoice for promotion mechanic – there is sometimes room to manoeuvre with promotion margins v standard
o gondola end
o individual promotion fees
o point of sale monies (pos)
o sampling (free stock or credits)
o seasonal
N.B. If supplying via a wholesaler or distributor then some of these terms can apply to both!

So, as they say…. forewarned is forearmed! Get the ‘shopping list’ before you quote your prices!

Happy negotiating!

Sue

Sue Davitt – Business Adviser
* Fast Moving Consumer Goods

 

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