We are now into Month #4 of selling the Mini Twists and finally the first bags are slowly starting to appear on shelves in some select stores. A reality of being a smaller-sized supplier is that we have zero leverage to “force” our way on to store shelves and must play a long, patient game to achieve our placements.
As supermarket chains have consolidated in recent years, it has become more-and-more expensive and difficult for suppliers to get their products on the shelves. We were recently told by one major regional supermarket chain that they now require $10,000 per item to secure space on the store shelf. Based on their expected rate of sale per store and our profit margin per bag, I estimated it would take us 2.5 years before we would recover that investment; that is of course on the assumption that they would keep us on the shelf that long – there is no guarantee even after you pay the fee!
Luckily, most of the chains have “slotting” fees that are not as prohibitive. The trick is though that they only review their shelf range normally one time per year. So, we must keep informed of when they will be reviewing our category and then hope we can secure an appointment with the buyer during this period. We are normally given about 10-15 minutes to make our pitch and it is expected that we arrive with not only the requisite offer for the slotting fee but also promotional offers. If you ever see specials such as “buy one get one free” or “$.50 off” – that’s what I’m talking about! Those discounts are funded by the supplier and the agreements on the timing and amounts of those discounts are made many months in advance.
The upshot is that in many cases we have to wait a year (or sometimes more!) before we can make our pitch with our new items. This is why we sometimes get frustrated on how long it takes to roll out our new products. Happily, there is a bit of a short cut called “in-and-out” promotions whereby we do not get a spot on the shelf but the stores will bring in temporary floor displays of our product. There are two primary seasons for this – summer time and around the 4th quarter holidays. We have been successfully getting placements in a number of supermarkets for the summer season so many of you will hopefully see our Mini Twists in your stores this summer.