Three things you need to know before launching into big retail

If you're thinking about taking the plunge into big retail then there are a few things you need to know. We’ve been in the industry a while and based on our experience, these are the top three questions every founder should consider before taking the leap.

 

 

01. Do you have a clear value proposition?

 

Having a clear value proposition is important for any business, but it's particularly important in FMCG. Founders often make the mistake of thinking that because they have a great product, people will just naturally want to buy it. But the reality is that in order for someone to pick up a new brand in a highly competitive environment, it needs to be hyper-obvious as to why they would choose it over your competitors, or market leaders with strong existing brand equity.

 

This is where a strong value proposition comes in. It should be clear, concise and compelling, and it should answer the question "why should I try something new?" If you can't do that, then you need to go back to the drawing board.

 

 

02. Do you have a strong and reliable supply chain?

 

If the last few years have taught us anything, it’s that you need to have a strong supply chain. From ingredients and packaging, to getting your finished product to the shelf you need to have a good relationship with your suppliers and be able to get hold of stock when you need it.

 

There's nothing worse than getting a retailer on-board and excited, and then not being able to deliver - not to mention the lost sales that you can never get back and the damage this does to cash flow, so make sure you've got this sorted before you launch.

 

 

03. Do you have an accurate understanding of your commercials and margins?

 

You need to understand your commercials and margins inside out. You need to know exactly how much each product costs you to make or source, and then you need to add on a healthy margin so that you are making a profit. This might sound like obvious advice, but too many founders launch into retail without really understanding their numbers or the hidden costs associated with supplying big retail, and it always ends badly.

 

So there you have it: three things you need to know before launching into retail. If you need help with fleshing these out, then get in touch. We’d love to chat.