Deailing with Tesco

[Leson50]

In talks to possibly supply a number of stores. Anyone here with experience? Need to understand the pitfalls particularly in regards to shelf life of products.

 

[quikshop]

In talks to possibly supply a number of stores. Anyone here with experience? Need to understand the pitfalls particularly in regards to shelf life of products.

If you get accepted the obvious pitfalls are margin and product replacement, i.e. a cheaper own-brand version of your product appears towards the end of your initial supply contract.

 

[RevaxMedia]

Something you will have to deal with - if your product sells well the chances are if applicable they will generate a cheaper version and run it along side yours with the prospect of weaning yours out and theirs in.

 

[Esk247]

Something you will have to deal with - if your product sells well the chances are if applicable they will generate a cheaper version and run it along side yours with the prospect of weaning yours out and theirs in.

Indeed, so if possible, make sure yours is a brand therefore they're less likely to try and replace your product as customers will be searching by brand rather than product e.g. Adidas, Pataks, Nestle.

 

[Cobby]

If you start doing well, be very wary of seriously investing to increase your production - if they realise you have done so they have more leverage to squeeze you on margin, knowing that if you don't agree to their demands you'll be left with loads of capacity and no access to market.

I know about eight small businesses that got stung in this fashion by various underhanded supermarkets (including M&S).

 

[JEREMY HAWKE]

I was involved with a large household name and there is only one person that gets the better end of the deal and that is the supermarket .Its the reason they make so much money. Is worth remembering they dont pay their staff a livable wage so they care even less about their suppliers

 

[mhall]

Good luck but remember that if you sip from the devils' cup you must use a very long spoon

 

[businessfunding]

That looks like quite a bleak picture, but remember many suppliers do very well dealing with the 'majors' - it isn't a wholly abusive relationship.

It pays to take a good look at contract terms and to understand their systems and how they work - they will not bend their systems to suit you.

And finally, don't sell your soul - it might be more valuable to sell less at on your terms than to destroy all your profit centres for a supermaket presence - know your parameters and limits!

 

[John_Orcus]

Proceed with caution, and make sure you get someone in the know to check the contracts.

I know of several people who have been stung badly by supermarkets. In one instance a company supplied them with about £10k of giftware on a trial basis.

Because it didn't sell quickly enough for the supermarket's liking, they put the stock in storage (for which they charged a fee), and returned it to the supplier (for which they charged a fee). The fees wiped out any profit made on the original job.

I'm not for one minute suggesting that all the big boys operate in this way, but do tread very carefully.

 

[Geoff T]

Things to look for in the contract for starters:

• cost of complaint/product withdrawal
• cost of delivery to store - if applicable
• cost of marketing
• cost of place on shelf
• cost of promotional activity - it WILL cost more

Like said already, read the contract... then do it again... and again... and when you're SURE you know what it "might" cost you... get it checked...

It can be great - but it can also cost - consider yourself warned - and good luck!

 

[Stuart Bailey]

Be careful what you say on the internet about other companies especially large international ones because if you write potentially defamatory statements such as accusing them of not paying staff a livable wage you could be sued.

 

[Cobby]

Be careful what you say on the internet about other companies especially large international ones because if you write potentially defamatory statements such as accusing them of not paying staff a livable wage you could be sued.

Only if those statements aren't true:

http://www.independent.co.uk/news/business/news/supermarket-staff-live-in-poverty-6291599.html