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Every square foot of a retail location must generate income. Algorithms and assistant managers continually reshape these retail environments, looking for profit. Turnover is the rule, so suppliers with the highest sales, most ads, and brand awareness evolve into superstars—if they can keep up product support and sales numbers. If a product doesn’t perform, stores get rid of it. If you want to get your product onto retail shelves, you need to understand why a product stays on shelves and what gets it thrown off.

Authorization Does Not Equal Sales

Authorization into a store is a wonderful moment. You’ve fulfilled your mission and you can brag, “Hey! We are in ___________ stores!” Also, being authorized to place product in multiple stores will let you leverage discussions with other retailers, buyers, and brokers.

But an authorization does not guarantee sales. That’s because an authorization does not mean your product will end up on the shelf, consistently, and in a favorable spot. And getting on a shelf in a good position is still only half the battle. A standout undeniable product generating good sales volume is the other half—that will protect you from trips to the discount bin.

What Is a Good Placement?

Given the pressure to produce sales, your product must be well placed on store shelves. What’s well placed? Your goal is to have your product at eye level. To obtain this, stay committed but don’t be a difficult visitor to a store. Before store visits, prioritize your goals and think through your plan. Immediately asking for an eye-level placement can be seen as unrealistic, so be cautious at the outset of the relationship. Like water, you can flow around rock.

Of great importance when you do secure authorizations is immediately supervising the initial cut-in onto shelves. When I refer to cut-in I mean on the shelf with a tag. And many employees will let you help them.

Each store has unique protocols for activities such as shipping to them and receiving by them. Your team will need to have a basic checklist to remember these protocols.

Equally important is following up after shipment of your product. Remember, there are thousands of products—you are not the only vendor. Once (store) authorizations have been secured and initial orders have been filled, your follow-up plan of action must ensure that your product will have shelf life. And there are not many limitations to what other vendors might do when a brand ambassador is not present. I’ll discuss these in more depth later.

With the endless flow of new products into a typical store receiving area, new-to-the-store product often may sit idle on a shelf or hidden behind another box. So your brand ambassador or sales rep must, at times, literally retrieve the product from receiving and get it onto shelves. Then a shelf tag must be obtained from an employee. Usually there are one or two people who are responsible for shelf tags, and you have to find them to get a tag. Getting the tags alone will keep a portion of your competitors at bay.

Here’s a trick to impress retailers with your product. When your product is finally cut in, most employees are aware of its arrival. Keep them aware of your product. On your first follow-up, arrive with product samples and educate the store, staff, and owners. Be sure to budget for this expense. It is vital that employees walking by your product hours on end be willing to endorse it. On occasion, employees can end up being your most loyal customers. I’ve blitzed many retailers by giving away product and educating staff and customers about the product, retaining sales long after the visit.

A Constant Watch

After the initial cut-in, you may find your product missing again after two or three weeks. Be cautious and do not allow your emotions to get out of hand. Remember, you need to cultivate your in-store relationships.

As Woody Allen once said, “80 percent of success is showing up.” Being a physical presence in stores is essential. Without a constant neighborhood watch you will lose your spot as fast as you got it.

For example, I was working for a manufacturer that had closed over 100 accounts, and rather quickly, I might add. There was a palpable enthusiasm for the product among all players. All new accounts required free-fills, often a necessary evil. However, the assumption the manufacturer made was that the free-fill would secure the manufacturer’s spot. But months later, I made a store visit only to find product not on shelves.

There are at least ten reasons why product disappears from the shelves:

1. Product is in the back.

You become Indiana Jones. You unearth your product, buried under a sea of other products. Typically, store staff will help you refill your shelf space.

2. A competing brand ambassador removed your tag.

Equivalent to street bullying. It does not happen frequently, but enough. Certain promotion cycles bring out this type of behavior in competitors. So grit your teeth, reset your tags—and do not reciprocate. Rise above and be sure to sink both foul shots!

3. The tag fell off.

It happens.

4. You sold out!

You literally sold out. Which would be great news, except none of the employees recall your product, no tag was created, and another product has moved into your spot.

5. The product was never received.

This happens more than it should. Orders get lost, but that’s just part of the game, so stay on top of your orders.

6. The store did not have time to cut in your product.

Annoying, but common. Make it happen.

7. The reset was delayed, and your delivery date was pushed back.

This is common with resets. Resets are scheduled for one date and happen four weeks later. Be patient, but firm.

8. Someone rearranged the shelves, and your product was left out.

Shelves are rearranged and items are squeezed out. The higher your sales, the less likely this will happen to you.

9. The retailer cuts your product!

This happens as a result of underperformance, period, and often occurs with no warning or notice.

10. The distributor is out of product.

Sometimes your product runs out and you are unaware of it until it’s too late. It happens to the best of us. We can’t bear the burden of everything, so find the humor in the situation and keep your chin up. There are worse problems to have than your product being too high in demand. One thing you can do is keep close tabs on your distributors to keep this situation from happening again.

Renters of the Retail World

Being a “renter” is where you start in stores. It’s like having an apartment, and you do have a lease. But the lease is month to month, so the landlord (i.e., the chain) could decide that they no longer want your product. So being a “renter” is not where you want to finish! Starting as a renter of shelf space is your way in. Eventually you want to establish a place on the shelves of your accounts that you feel you “own.”

The good news is, there’s always room for a renter in any store. But rental locations will be poor and most likely overlooked. Given the poor placements, it’s no surprise there will be a high turnover in the renter’s world. But because of this turnover, for the retailer, renters have a place in their business model. Renters and their product lines offer competition against leading brands that own their established space. Renters and owners both have to pay for expensive ads, demos, and slotting fees. So you can see why turnovers are somewhat desirable to retailers. If a product dies on the vine it’s replaced by the next rental product. There will be no lack of entrepreneurs in the world who are vying for your spot and more than willing to pay cash for it. Retailers make money from this type of restaurant-style turnover. Before we talk about how you end up being an “owner,” let’s have a look at the issues you can face as you struggle to get an established space on store shelves.

SHELF CHECK 10

As a Renter, Beware of High-Performance-or-You-Are-“Out” Traps

A high-performance-or-you-are-“out” trap is designed so that few succeed and many fail. This is a very expensive trap indeed, costing upward of $20,000. Some retailers have a portion of their business model designed to profit immensely off naive renters. Nonrefundable slotting fees are usually a one-time charge to get shelf space. For major established brands it’s well worth the investment. However, for renters it’s a battle to make the numbers to keep their shelf space. So a high turnover of renters with unestablished brands can be quite profitable for some retailers.

If you view the world through rose-colored glasses, you will find retailers that appear to be no less than the Holy Grail. They are easy to spot. They have extraordinary locations in their stores for renters, usually in very high-traffic and touristy centers. For a few suppliers, they are the lifeblood of their cash flow, and the store is a constant high-performing account. But for the other 90 percent of vendors, they are high-rent money pits. Many of these retailers will tell you that if you pay the slotting fees, ads, discounts, and free-fill you’re in the club. But once your rental space is secured, store executives will place impossible sales minimums on you within your first six months. You must be well established to perform in these spaces, and if you can achieve the sales levels you will thrive. But if you don’t, these retailers profit enormously from your demise.

Smaller beverage companies notoriously fall into this trap. While I was working for a beverage company, one retailer said to us, “We’ll give you six months if you free-fill our stores and provide deep discounts with an aggressive demo campaign. If you perform in the top ten of our beverages, then we keep you—simple.” Now, we should have known better because when we walked into these accounts there were already several items in the 50-percent-off bin. They were that week’s fallen soldiers and it was their rental space we had just taken over.

Yet despite such warnings, we forged ahead. The shelves were stocked with our beverage, demos raged on in full force, and discounts flew around like monkeys in The Wizard of Oz. The product sold at demos, but when the circus was over, customers stopped buying. At six months they cut us, so thousands of dollars of vital operating cash were burned up chasing a phantom. The slow and steady climber will achieve greater results faster and will have more operating cash available.

Owners

So how do you get to be an “owner,” a product that is so established that it is very difficult for the competition to take your shelf space away from you? You must pay your dues by being a success and proving your financial strength. But that is no guarantee of continuing “ownership” of your shelf space. To really be an owner your product needs a proven track record. This means your product is selling 365 days of the year rain or shine because it’s an established, recognizable brand people come in to buy. It means your product will be selling on deal and off deal because people find it undeniable and they don’t want to be without it.

Examples of brands whose shelf space is close to impregnable are such household names as Campbell’s soup, Ruffles chips, Pringles chips, Coca-Cola, and Kraft Macaroni & Cheese. Their long-standing reputation, backed up by big marketing budgets, makes them difficult targets to knock off the shelf. It can be done, but probably not by you while you are getting established.

Having Enough SKUs

Earlier we covered how vital it is to launch with at least three to five SKUs so as not to be ultimately lost on the shelves. Just having two SKUs is asking for trouble. I remember one launch with this problem. One of the two SKUs was defined by the retailer as a supplement and the other as a grocery item. Customers were unable to grasp and see both products as one brand. One SKU was placed in the cash-out area, while in the supplements area the second was never really noticed. The final act of self-destruction was that all in-store advertisements focused solely on the cash-out product.

Splitting your brand between two categories on an initial launch is like inviting the Grim Reaper to your event.

Learning in the Small Chains

Launching a new product is a very exciting moment and it should be. It’s often a dream come true. But over and over I have seen reality quickly set in. Orders go up and all of a sudden you have 150+ stores as customers, and then just as quickly orders drop and you lose customers. Or worse, without warning retailers pull your product midlaunch and toss you into a discount bin. A new line will replace you fast.

So team up with retailers that make the most sense for your product so you have the best shot at developing staying power and a win. Smaller retail chains of twenty stores or fewer can create success for your brand during your initial phase.

Let me give you an example. The Southern California market is one of the most coveted. There are also several small chains outside of Southern California making waves and proving great partners. Proving your brand with sales figures will be paramount. You must build a track record if you want acceptance into luxury accounts such as Sprouts Farmers Market. And, of course, the highly successful juggernaut WFM. So start with the independent chains. These are some of the most successful:

Mother’s Market & Kitchen

Clark’s Nutrition & Natural Foods Market

Lassens Natural Foods & Vitamins

Jimbo’s . . . Naturally!

Keil’s

Gelson’s Markets

Bristol Farms

Erewhon

Barons Market

New Leaf Community Markets

Andronico’s Community Markets

Better Health Store

AKiN’S and Chamberlain’s Natural Foods

Jetro Cash & Carry (wholesale!)

Down to Earth Organic & Natural

Good Earth Natural Foods

Woodman’s Markets

Huckleberry’s Natural Market

Sendik’s Food Market

Festival Foods

Sunrise Health Foods

Metropolitan Market

New Frontiers Natural Marketplace

It is in these smaller settings that you can learn to build productive relationships and meet the challenges that must be addressed. Specifically, you need to remember that you are not the only vendor. Although a noncompeting category product is not your immediate foe, its representative, brand ambassador, regional manager, or owners still compete for face time with department heads. Be considerate of store and departmental managers, who are always overwhelmed with their own daily tasks, goals, and merchandising concerns. In the midst of all that “noise,” how do you get noticed? Keep your store visits friendly and straight to the point, and walk with your store partners around the store. They have to be moving, so you must move.

SHELF CHECK 11

Don’t Expect to Land Major Accounts in the First 90 Days!

Your brand will need real success stories, customer buzz, and sales data to prove you are a force to be reckoned with. So walk before you run. Don’t burn up your cash chasing the giants at the start. I discuss negative cash flow later and how it paralyzes the momentum you and your team have built. But for now, we must be clear about this point: Stay away from the majors, at least for now.

SHELF CHECK 12

Don’t Go to the 1,000+ Chains with Your Product in Just Mom-and-Pop Stores

Don’t approach larger chains such as Kroger, Circle K, Meijer, Lipari Foods, and Publix even once you have secured more than 100+ small-box or independent accounts. It will be a total waste of time. Many owners, founders, and directors believe they are entitled to be in a 1,000+ account chain after a small success and little to no sales data from major retail accounts. There is a time and place for accounts such as Publix. That’s after you have closed at least 500+ accounts with two to three major 100+ chains with supporting SPINS data.

Retailers want unfiltered raw numbers, meaning nothing altered because you want to look good in front of a buyer. Major retailers do not want to hear inaccurate data, inflated sales data, and vague hearsay stories from the street from CEOs, brokers, and sales directors. If your product passed through registers at a natural or specialty retailer store, this information is reported to SPINS (www.spins.com). Only very small natural store chains (one to two stores) don’t report to SPINS. Major retailers have a symbiotic relationship with SPINS and will quickly realize if your data are not real.

I suggest a membership to SPINS as you implement your sales strategy. You can run reports on any category and compare your sales data to your competitors’. Knowledge is power. Find out how you stand up against your competition and gain leverage for closing deals.

Once your data are in line with the expectations of high-profile targets, your industry partners, such as KeHE and UNFI, can help you in meetings with them.

SHELF CHECK 13

Find Your Way Slowly but Surely

I move slowly and methodically when it comes to rolling out a product. I picture a product’s current position and forecast six months into the venture and work to make that reality appear. If you build up carefully, you can get yourself to the point where you can safely think about getting bigger.

So what is the point you need to reach to have a chance with the major-league accounts? You need to have distribution with KeHE, UNFI, and Nature’s Best; an effective online site; and 500+ stores as customers. WFM, Sprouts, Raley’s, H-E-B, Albertsons, SUPERVALUE, Kroger, Ralphs, Vitamin Cottage, Safeway, Super Supplements, Publix, Publix GreenWise Markets, and Vons are among the most-coveted accounts.

Category Reviews

Major retailers such as Publix, Walgreens, and Kroger are very large, some with 1,000+ stores. You should know that if you do get them as accounts you will be subject to their mandatory category reviews. Categories include supplements, grocery, nonfoods, hygiene, dairy, fresh baked, super fruits, produce, apparel—on and on the list goes. Acceptance can often be the decision of a jury, not just a buyer.

A category review will examine all of the products in a category to identify the sellers, and the ones that need to be replaced by a new product. Reviews may be conducted by a panel rather than just a category buyer. Category reviews are spread out over a calendar year so reviews are not all on the same day. In fact, they are weeks apart throughout the year. Review schedules are coveted because they are not public knowledge and are not readily available online. You must be invited or you won’t be considered. You can obtain a copy of the review calendar through retailers, buyers, brokers, and/or your sales director. These groups of people overlap and are in constant contact—all sharing information in real time. If you are not in the “in group,” hire someone who is.

The Journey onto the WFM Shelves

Getting onto the shelves of the huge natural foods chain WFM is not as simple as taking an order over the phone and submitting it to UNFI.

WFM buyers do not want to force new products into each store, but with authorization you can sell to the stores. If a grocery manager or a Whole Body section and supplement manager accepts your product, then that individual store will generate a simple PO. However, getting that PO from one specific store is in the middle of a chain of events that generally looks like the following:

Once you get authorization for your product, it will be listed in the WFM data site called IRMA.

To get a meeting at store level, you should say to the grocery manager or the Whole Body manager, “We are authorized in your region. You can check in IRMA and buy through UNFI West.”

Face-to-face meetings should be booked at each store in the approved regions.

A PO should be obtained from each store. WFM generates an internal PO number, which is the number you give UNFI with your WFM turnover. When your product is delivered, the PO on the invoice is matched up at the WFM delivery area. If the PO case count doesn’t match and/or the PO number doesn’t exist, the delivery will be rejected at your expense.

Product is shipped through UNFI.

So let’s look at the first step in the chain: getting an authorization. To be authorized by WFM regional buyer(s), unless an established relationship exists, you will most likely need to make a face-to-face presentation. Each region approves or disapproves items. This is precisely why a well-connected sales director or broker can present product and acquire authorization.

Once you obtain a PO, fill out a form called a turnover. UNFI and Nature’s Best require turnovers to be submitted online to their ordering department. Do not send orders until product stock is in the distributor’s warehouse and ready to ship. UNFI requires POs only with its WFM orders. For your other UNFI accounts, you need to supply only account numbers. One reason for this is that to date WFM has required an additional PO to go with its turnovers. Another reason is that if WFM didn’t require a PO, then let’s face it, a frenzy of products would be sent to WFM without permission. Without a PO number it would be next to impossible for WFM to keep track of its deliveries.

So that is the basic process that you go through with one store.

Of course, with authorization you can approach all of WFM’s individual stores in a region with codes, pricing, and the SRP (suggested retail price). Your product has been accepted by UNFI and is ready for coding. Once a WFM regional buyer confirms authorization, UNFI issues codes with SRP and unit price, information buyers need to know. (I should mention that UNFI will not order until it gets at least eight to ten customer POs.)

Next, product ships through UNFI. Wait—not so fast! It is important to know that UNFI requires a major retailer commitment before it will accept your product into each distribution center. For example, you will need a commitment from all fifty-four of WFM’s South Pacific stores before the Moreno Valley UNFI distribution center will accept you as a supplier. With WFM, this is the chicken-and-egg scenario at its finest—meaning do you get into UNFI first or WFM first? The answer is yes. UNFI codes your item, and this code will be the item number WFM will use to access item numbers in its system. This is also the number all UNFI Moreno Valley account customers can use to order your item.

Unfortunately, you will still have a problem. You will have no product at the UNFI Moreno Valley warehouse for one to two months. I suggest letting the stores know their PO may take one to two months to fill. This is not an unusual situation for a new product, and WFM knows it. WFM team leaders will understand their PO’s expected date of delivery. Although this can be a common issue, good communication is key to overcoming this hurdle.

Now, how do you get beyond your first region? You will need to get approvals from the appropriate buyer for other regions because you can only sell into approved WFM regions. For example, if you are approved only for South Pacific but you happen to be in Colorado, you will not be authorized for that region unless the Rocky Mountain WFM buyer authorizes you.

Other WFM regions can access your sales numbers, which gives you leverage when trying to get accepted by other WFM regions and additional UNFI distribution centers. Timeline for this? It will typically take a year or two to expand to different regions. Once you are in three or four WFM regions and are performing, you may consider global review or simply continue to expand into other regions.

As you move forward with WFM, you can bring your success stories to other retailers like Sprouts, Raley’s, and other 100+ chains. With a great product and positive SPINS data, they will let you in the game.

WFM Category Reviews

WFM category reviews occur at both the global and regional level. When presenting to WFM you need to set realistic goals. I worked with three companies that all made the same mistake. I’ll use Michael’s Perfect Pickles as an example. Michael thought his Perfect Pickles were so fantastic that all twelve WFM regions would agree to bring in his product. Michael instructed his team to present to WFM’s global review. Yet there was no data to back up his expectation and, in fact, Michael’s Perfect Pickles had not sold in one WFM store. He went to the review and submitted his pickles. As time passed Michael expectantly waited for the call, which never came. Nobody calls you to reject—only to accept.

The three companies all experienced the same failure. However, for one I was quietly setting up WFM regional review paperwork for the South Pacific region simply because this is where I am located and could give it my complete attention. (Major retailers respond to local vendors because they get personal attention while supporting the community and local employers.) I also advised caution, telling the company that if we went for broke and attacked the Death Star, we might not have a single win. The client requested that I not submit for the South Pacific region because he thought it a waste of our time to close one WFM region and told me that my work conflicted with his global review strategy. At a trade show six months later, I met with a WFM regional buyer who recalled that application. With a chuckle, he said he had rarely experienced twelve WFM regional buyers agreeing on any product, especially unproven ones. “Why would you waste your time?” was his question. He advised me to go after just one region at a time.

Even if Michael’s Perfect Pickles was accepted into the South Pacific region, it wouldn’t mean he was an “auto ship” to the thirty-three retail locations. He would discover that he would need to sell into each individual WFM store in the South Pacific region one by one—argh! Now that’s a big stipulation, and acceptance by the region is no guarantee that all or any of the WFM South Pacific retail locations would accept product or keep it.

SHELF CHECK 14

Never Submit a WFM Turnover Before Stock Is in a UNFI Distribution Center

Anytime you are submitting orders for UNFI for any region, first call customer service to ensure that product is there. Your item code and distribution center name are all you need to obtain this information.

Murphy’s Law operates in the food industry, just as it does anywhere else. A few years back, I had a confirmed delivery appointment at UNFI. My truck was late, the logistics company did not report that it had missed my appointment, and subsequently I was denied delivery.

Imagine my disappointment when I submitted turnovers to UNFI thinking my product was in the warehouse only to find that WFM had not received product! I called into UNFI and they told me they were out of stock and didn’t know if and when product was expected to arrive. To make matters worse, since WFM POs expire once they are submitted, the POs were closed. I had to return to all the stores and beg for a new PO. Avoid this frustration.

However, don’t assume all is well even after delivery. At times, it can take three days to log in new products due to the high volume of data. This is especially true with WFM. When a store receives a shipment, it matches it with the delivered UNFI PO and WFM’s PO. If the two POs don’t match the shipment, it will be rejected by the store.