What we're talking about
If you make physical products, one way to sell more volume is to get them stocked by other businesses, whether that's a high-street retailer or an online shop. The retailer will buy your products at a wholesale (or trade) price and sell them, with a markup, at a retail price. You'll have to have the wholesale prices baked into your pricing strategy, so that you're still making a profit when selling through a third party. For example, a candle-maker might start selling directly to customers before approaching lifestyle stores once they've got some sales evidence to back their business up.
Why it's important
Building relationships with the right stockists can be a game-changer for a small brand. Beyond the obvious revenue benefits of selling your products (in volume) into retailers, you'll get access to a whole new, often significantly larger customer base. That'll help boost your brand awareness and legitimacy in whatever sector you're operating in. For many emerging brands, this is especially important. Stockists can also provide advice, connections and marketing spend for what you're hoping to sell.
But entering into a relationship with a stockist should never be taken lightly – among other things, the shops you're sold in will massively influence your brand image. You need to be confident that customers will buy your product from said store and that the terms agreed are reasonable for your business. Landing your first stockist takes a ton of hard work and patience – you'll have to make a convincing case for why it's a good move for them.
Things to note
It's a partnership. While you will have to make a compelling case for your brand, it's important to remember your business has a lot to offer potential retailers.By stocking other brands, retailers can make money without spending on own-product research and development; they rely on independent labels to stay relevant and quickly respond to trends. That's why, as you grow, and provided you're doing things right, you might find stockists approaching you. Your brand's story and values should complement your stockists' – and you should leverage this compatibility as you start to pitch.
Each store will have different requirements. Though this guide will get you broadly ready to target the right stockists, your strategy will need to be bespoke depending on who you're targeting. For example, trying to get into a major supermarket chain will require a very different process from being stocked in a local independent store. Here are retail giant Walmart's requirements, if you're interested.
A distributor might help. A distributor or sales agent acts as an intermediary between you and a stockist. This might sound like an extra expense you can't afford, but working with one is an option worth considering – particularly if you're short on time or are hoping to penetrate an international market. Over the years, a good distributor will have built up a large and impressive network of buyers that their clients can tap into. They can also take care of getting your product to the relevant warehouses and lots of other customer service-related admin – so much so that some stores won't consider you unless you come via one. We won't get too much into distributors in this guide, but this is a good starting point.
Perseverance is key. Getting stocked in your dream retailer can be difficult; it can sometimes take years of relationship-building until a stockist agrees to take you on. One method that often gets small brands a foot in the door is agreeing to a payment term called sale or return (SOR), also known as on consignment. In this, a retailer doesn't have to pay the brand for the product until it sells. Any unsold items are returned to the brand after an agreed period (eg, the end of the quarter), while payment for sold items is invoiced on an agreed time frame (eg, every month). This minimizes the risk from the retailer's point of view.
Your line sheet is your weapon. To get those all-important orders, you'll need to produce a line sheet (AKA a catalog) to sum up your business in a digestible format. This should include key info about your brand, product and manufacturing pricing requirements, as well as some product photography. It's a sales tool, so it needs to be eye-catching and present your wares in the best possible light. There are plenty of templates online, such as this one from wholesale platform Brandboom.
How to get ready to pitch retailers
1. Reaffirm your reasoning. Revisit your business goals and ascertain how working with retailers fits in. What do you need that you can't get from selling directly to customers? How much do you want your business to grow and what kind of volume can you supply? You might already have an idea of who your dream stockists are, or the qualities you're looking for in one. Get these down on paper.
2. Make sure you're ready. Confirm that your product is of the appropriate standard and quality to be sold into third-party shops. This will depend from sector to sector, but it involves quality control, product testing, getting your branding and packaging right, and that you've identified your unique selling point.
3. Get clear on your end customer. Get together some intel to support your case when you reach out to your stockists. Create customer personas, paying particular attention to questions about shopping habits. You may also want to back this up with some user research, establishing some hard evidence of validation that you can use later down the line.
4. List your options. Start compiling a list of stockists that would be suitable for your brand. You might intuitively know a fair few already – research their competitors and collaborators. Look at where your direct competitors and brands with a similar target audience are stocked.
5. Get stuck into some thorough research. Rank your list of potential stockists, so you can be strategic about how much time you spend researching (and targeting) each one. Consider aspects like their target audience, online presence, marketing output and company values, product categories, store layout, typical price bands and reach. Ensure you feel confident that you'll be able to describe how you fit into all of this. Answer the question: what's the gap in their offering that your business fills?
6. Get clear on the terms that suit your business. This will often be negotiated on a case-by-case basis but there are certain things to consider before you speak to any stockist. That includes your policy on exclusivity (what if a store wants you to stock with them only?), how much volume you can produce (some retailers might have a minimum order quantity), the payment terms you're looking for, how delivery will work, how returns and exchanges will work and how you'll accept orders going forwards.
7. Finesse your online presence. Now you've ticked all the internal boxes, ensure that your brand looks as appealing as possible, with a strong online and social media presence, as well as any relevant product branding and packaging. Position customer reviews front and center if you can. You might want to create a wholesale section on your site.
8. Get out there. You're ready to start trying for that crucial face-to-face meeting. With your line sheet in tow (tips below), start reaching out to the appropriate stockists – whether that's via email, DMs, phone calls, in person with samples or by attending trade shows. Here are some tips on what happens when you reach the pitching stage.
• Working with the right stockists can make a huge difference in spreading brand awareness and increasing sales revenue as you look to grow your business.
• You'll need to make a call on whether it's worth your effort. You'll obviously make more profit selling directly to customers, but it'll be harder to get the customer base and sales volume that a retailer will give you.
• Building relationships doesn't happen overnight – you'll need to do plenty of research before you start approaching retailers and you may have to play the long game.
Perspective. From creative director Lizzie Evans, here are five things your ideal stockist wants you to get right.
Example. For business news site CNBC, three women who've done it talk pitching to billion-dollar retailers like grocery brands Target and Whole Foods Market.
A version of this article was published in the Courier Workshop newsletter. For more deep dives into essential business concepts, sign up here.