Your stock is your identity – it is why customers value you and make that extra journey instead of buying online or from a supermarket. Every product you stock should meet that golden retail mantra of Attracting, Converting or Retaining customers, preferably all three. Plus it needs to make you the right kind of money.
I’ve spoken to many successful independent retailers, and I developed this 10 point checklist for stocking products, which I found indispensable. Don’t sign up to a new supplier until you’ve read this list:
1. Your core product range – is it a match?
Your customers come into your store because they have in their head a short list of what they like from you. These are products or ranges that stand out and make their trip worthwhile. I call these your core products.
There will be less than you think, but they will drive the footfall of your business.
It could be your own beef, your take away coffee, your best three kinds of cheese, your excellent range of wines priced around £8.50, chocolate between £5 and £10, your takeaway salad bar.
Attached to those products, your customer will add measures of value. Your range(s) might be:
- always tasty
- a treat
- good for gifts
- family friendly
- ever changing.
Think of each one of those core products as the centre of a darts board. When choosing new products, consider which darts board this product needs to go on – the wine range or the salad bar – and ask yourself how close is your new product to your core product, and does it have the same value:
- Single servings of chutney are closer to the centre for a good value and quick salad bar, jars of chutney further out
- Firm textured neutral crackers are good for delicious and family friendly gorgonzola, breakable cumin crackers further out
- Single serving pre-wrapped brownies are closer to your core product than whole cakes for your quick and treat takeaway coffees,
- Chocolate bars do not have the same value to the customer as boxes of truffles for your well priced and gift chocolate range between £5 and £10
You win when your new product hits the darts board dead centre. It reinforces and increases your footfall which means more profit.
What are the products for?
If your supplier can’t answer this question in one quick phrase there is a good chance you should have nothing to do with the product. You are a professional food person and many of your customers are not, they are just in for the treat of it. If it needs explaining to you, it’s going to be a harder sell for you and your team.
Many suppliers will say if you put it out for a tasting then it will sell – well you can’t put everything on tasting all the time. You as a retailer need more than that. Products need, at least to an extent, to sell themselves.
So look for products which are labelled well, so their use is apparent. Sometimes this means clear packaging so the customer can see it, sometimes it requires a few well-chosen words on the box.
If in doubt, get a sample and ask a few customers. They are the coal face.
How often will your customers buy it?
Products that make sense for you are products that deliver frequent sales. Sloe gin and gooseberry jam is not an everyday purchase no matter how good. A good cheddar could reasonably sell to the same customer every week.
What will the throughput need to be to earn a place on your shelves?
For new businesses, this is hard to measure but for existing businesses, you should already have a measure of value. If not, create one. For a given period and for your whole company or just comparable products, strong examples may be:
- Units sold per week
- Value sales per week
- Gross margin per week
- A “shelf rent” measure
Ask yourself if the new product can displace an existing poor performer. If it can, stock it. If it can’t, don’t.
Food & drink matching
Will your new product match to one of your core products? Wine to cheese, sauce to fresh pasta, dressing to salads. Taste them together and use good results to promote to your customers. Your suppliers can’t tell you this (they will tell you their magic product goes with everything), but if you find a good match, every sale of one leads to a sale of the other.
Cross-selling is that “if you liked that you’ll like this” moment. Your team understand it, your customers appreciate it. Products that stand alone in your shop that don’t naturally cross-sell to anything else or where the connection is not promoted, will probably decline or not sell at all. Matching in taste is noted above, but there are other examples of cross-selling:
- Hardware: barbeques for butchers, cheese boards for cheesemongers
- Greeting cards alongside gifts
- Gift packaged versions on popular high-quality everyday products
- Range extensions: “By the person who made your favourite onion marmalade
- Foodservice uses of popular products – e.g. Gorgonzola chips.
A product with good cross-selling opportunities will be a better friend to your store.
Your Gross Margin check is the bouncer on the door. Nothing should get into your shop unless it delivers the right Gross Margin.
For new businesses, follow your businesses plan (or come on the Guild of Fine Foods ‘Retail Ready’ Course). For established companies look to the margin you demand form each department.
Calculate your required Sales Price (don’t forget VAT if relevant) and ask yourself if your customers will pay it. If not, the product is out. It could be that it is too expensive, or that locally to you it is available cheaper. Very occasionally you might let it go if it is a footfall driver, but that is a slippery slope. Every product needs to pay rent in your shop, and low margin products aren’t worth the overheads.
If yes – or you can charge an even better margin – find space for it in your shop.
RRP and RSP
Many suppliers will offer a ‘Recommended Retail’ or ‘Sales’ Price – I say ignore this. It’s your business and your margin, not theirs. They have an interest in shipping more product, which means they want you selling it quickly and if necessary cheaply at any margin. That won’t pay our overheads.
Shipping costs or the delivery charges from
You may occasionally absorb a delivery charge for one-off events or to keep customers happy. It happens, but don’t make a habit out of it.
Minimum order quantities
Minimum order quantities are a problem. We are all Amazon trained where small orders come with free delivery, and people are coming to expect that in trade relationships as well.
Bottom line is every dispatch costs money. There is a quantity for which it is not viable for suppliers to make a dispatch, there is no net return. Setting minimum order quantities is the suppliers’ way of training their clients to order more efficiently so they can keep their dispatch costs down.
The retailer’s perspective is slightly different. Ideally, the retailer has sold the product before they have paid for it, so little and often (Just in Time delivery, as its technically called) is best. But they also don’t want to have stock outs, and customers are not consistent in their demand.
Assuming most retailers work on 30 days credit, then 3-4 week’s stock seems reasonable for long life goods, but 2-3 weeks is better as within any supplier range there will be faster and slower selling items.
Traditional stocking methods use a Re-order quantity, sometimes called a Minimum Stock Level. When this level of stock is reached the Retailers order 1, 2, 3 or 4 weeks of inventory as they decide.
For this you need to:
- Set the re-order period for the supplier: 7 days, fortnightly, every 3 weeks or monthly. Ideally, keep it as short as possible as their MOQ allows;
- Decide on the Re-order level. Stock for 7 days’ sales is about right for independent shops
- Calculate the sell rates for the products from that supplier
- Order the predicted sales for the next order period.
- Review for any special circumstances (e.g. Easter is coming, any promotions, any new, substituted or discontinued products)
This works well enough, but is difficult without good IT support, either through an EPOS system or a good purchasing system.
Effective ordering is the difference between a good retailer and great retailer, so good luck! Even the best teams get it wrong sometimes.
Offers & Promotions
All Suppliers make offers and promotions from time to time – how much should they incentivise you to buy their products?
The answer is a lot. The most power these offer is your ability to demonstrate value to your customers. Depending on your customer base, sales, promotions, discounts, loyalty discounts, money off, these all contribute to you fighting to make your store relevant in a price competitive world.
The whole of retail is premised on Attracting, Converting and Retaining customer, and offers and promotions are reliable tools to achieve all three. That doesn’t mean you have to pass the full discount on. Here are two methods of propping up gross margins with discounts:
- If you get a 15% discount, you could pass on a 10% discount to your customer, and “pocket” the 5% to boost your Gross Margin.
- Buy (e.g.) 10 cases, and sell the first 5 at 15% off, build some demand and then sell the balance at full price for extra margin.
We all need extra margin sometimes.
Are you a small retailer with – you think -little access to substantial volume discounts?
Most independent retailers think they don’t have any muscle and have to accept the list prices from their Suppliers. Don’t – be bold, keep asking suppliers for discounts.
This is hard verging on embarrassing as most of these deals are done behind closed doors so you don’t know what a good deal is or how much you might need to order to get it. However, most suppliers are very happy to put large-volume options forward if there is a market for it. There is no harm in asking.
Top tip: If you pay your bills regularly they are MUCH more likely to offer a discount. When it comes to cash flow, pay the people you want discounts from first.
You can use a Supplier’s history to help make sales, so look for an excellent backstory to support your promotions.
Most customers live a lifestyle through their product choices: it may be local, ethical, shared values, veganism or something from the TV programmes they love. Look for Suppliers with histories your customers will bond with.
The inspiration for suppliers can also be used to promote products. Inspiration is like a reference, social proof to reassure your customers they are making a good purchase and often help to explain or contextualise a product. Here are some examples:
- It’s inspired by Para ham -your customers immediately are on the same page
- The supplier believes in sourcing British – the customer will make allowances for the necessary differences from a standard version, allowing for British substitute ingredients or recipe changes
- The Supplier trained with [insert well know chef here] – the customer will have their interest drawn to the product and be reassured the quality is high.
Customer like roots – they like to hear a product is old, or traditional, or tested by time or was eaten by their grandmothers or from the same region as them.
The current trends show that people don’t trust mass production, even if they are still buying 99% from there. Evidence of roots or provenance or traditional techniques is persuasive.
An Example – the word Farmhouse is widely used in packaging, but it is just FMB – it has no legal meaning or guarantee of any kind of production style or volume, but it works.
Look for real roots, and use it to debunk the big producer FMB that justifies the portion of the household budget you are looking to steal.
Know your producer personally
Saying to your customers, you have a personal relationship with your suppliers is a significant reassurance to them. I don’t mean you have to have been to their wedding, just that you know her first name, she has told you a few stories or you’ve been to her farm/production facility/met her chickens.
For example: for a cheese, ask for the date of production. No supermarket can ever offer that. “I went to Jamie’s cheese cellar and together we selected the 31 st August as the cheese for my customers. It also happens to be his dog’s birthday.” It is a very persuasive line.
Reach out to producers and have direct relationships with them. It helps you sell their goods, and they know it.
5. Product range
Retailers rarely order enough from one supplier to justify one product. Even when they do, a bit of brand presence gives you easy cross-selling opportunities.
Look for range expanding opportunities – if you like that you’ll like this – from Suppliers. Building brand loyalty into your customer base make your life easier.
The trends are towards single use. The days of people with full store cupboards are declining. As people buy high value for events, not every day, they want to buy just enough, not to have a fridge-full of half empty pickle jars. Look to suppliers with a respectable range of medium to small unit sizes. Small pack sizes are also cheaper which add to your perceived competitivity.
How do we assess packaging? There are several indicators of effective packaging:
- Can you see what it is
- Would you give it as a gift
- Can you easily see the brand – this is key for cross-selling and repeat purchasing
- How much space does it take up on the shelf. We need value density to make a good return on our shelf space
- Beware of products in clean white or clean black packaging – they soil too quickly on your shelf or in the customer’s cupboard
Brand washing is where you commit to a whole range rather than drawing down from a variety of producers. Don’t brand wash.
Unless you are Whole Foods with the space to do what you like, most of us can’t commit whole walls to a producer. Plus it looks a bit lazy.
Because there are some excellent ranges our there with awards to die for and good taste aplenty the temptation is strong. A nice rep turns up, and you become all excited, and many first timers go for it. However, your customers won’t see that as a choice, and they won’t respect you for it. Do your homework and cherry pick the products that match your core identity.
6. Production methods
Location & Origin
Some of your customers demand to know where their food is coming from and will make buying choices by how local it is.
Food miles, being local, being English or Welsh or Scottish or Northern Irish, these are values to customers. Step back and assess what values you customers aspire to, and then buy to meet those values.
50 Miles from your farm shop? Print out a map and put it up in your shop.
#Top Tip – Search for suppliers on Delishops and we’ll show you them on a map (within 50 Miles or less)
Is consistency important? There is only one answer to this and it is yes. I mean YES. We hear a lot about the ebb and flow of the season, and changes in all sorts of things that make dealing with real foods in real time hard. Yes, I get that. And, for sure, variability is inevitable, but that doesn’t make it desirable for the retailer. We need to build customer loyalty to products whose identity corresponds to a consistent taste.
Ask your suppliers how they ensure constancy for their strawberry jams 365 days a year, for their cheese in all seasons, their sloe gin when sloes are only available for a few weeks in autumn.
We need to repeat custom, and that means demand time and time again for the same product. Sorry, this is not a fun message.
Surety of supply
If you are going to invest in a product, to spend money on it, launch it, give space in your shop to it, you need to know there is enough supply to deliver on your sales targets.
The rough rule of thumb customers use is the shorter the ingredients list the more they like it.
Check out the ingredients list of the products you sell, and reassure yourself that if you were the customers, you would not be scared off by them. No one wants to think they got their 4 years old hooked on e-numbers.
Another ingredients point is for taste.
Some ingredients are very dominant, and really should be on the front of the packaging. Aniseed, cumin, nut flavours, smoked flavours, these are all flavours that can turn customers off if they encounter them unexpectedly. For example, praline (nuts) is widely used in truffles but often not prominently displayed in the front of the box. Ideally, this would come up in your taste tests with samples, but you don’t always get the opportunity to check.
Where do your suppliers buy their ingredients?
At the artisan end of the
More has been written about ethics in supply than I need to cover here – let’s focus on what helps you match the right product to the right customer. Your customer’s values play out through their lifestyle (or so they think).
Premium food shops – food service or retail – are expressions of those lifestyle choices, they are literally living their lives through your shop. You are a part of their identity.
Do they come to you because you have the right image for them, or do you match your image to the customers you want to attract?
You should be led by your customers, because lifestyles change so you will need to. Adhering to one image will make you out of date one day.
We used to try to save the rain forest from being cut down by saving paper, then we did it by eating less meat, now we do it by using more paper bags as a substitute for plastic that is polluting the water.
Some customers value low food miles, which means no tomatoes from Israel when winter is coming. Some prefer low carbon footprint, which means no heated greenhouses in Kent when winter is coming.
The ideals haven’t changed, the recommended actions have. We are not scientists to judge, we are a matchmaking service: work out your
There are four so-called reasons people buy and one of them is that they like the people they are dealing with. Profiling the suppliers helps some of your customers buy your products.
Customer like knowing people, it makes them feel they are part of the community. The profile of a key person at a supplier business is strong social media and counter chat content. Drop a “meet the maker” social media tweet of
Knowledge & Experience
You are asking customers to part with their hard earned cash, and they need to know your suppliers know which end of the egg is up. Look for the supplier’s c.v. or as much of it as they are willing to share to ensure you are dealing with competent people.
Alice spent fifteen years as a trained chef before starting her own business making Italian Lemon Pickle.
Pete was 15 years a second-hand car salesman before giving it up to make Italian Lemon Pickle.
Which one would you choose?
Commitment to the product is a core part of delivering the consistency you need to please your customers day in day out. Find out your suppliers’ stories of the hardships they have overcome, the challenges they have beaten, the miles under their tyres, so to speak.
Annie had to sell her car to get her business off the ground, Esra was working at Barclays Bank while making his jams each evening, Roger found and restored the only traditional French eau de vie still in the UK to make his gin.
Everyone has rights of passage, they are the stuff of Hollywood and our own daydreams and they brighten up the lives of our customers. They, in turn, pass them on at dinner parties and get the reflected glory of holding the attention of their friends and family. They will come back to your shop.
The term of the moment is Social Proof. This is an umbrella term for any evidence that a product or supplier is worth investing in by, in our case, Retailers.
Social Proof comes in many forms. The most powerful is that which retailer can use both as assurance of future sales, and to promote those products to their customers.
Customer reviews and Buyer reviews are both powerful, and are the currency of the internet. Look for both volume and quantity. 2 five stars reviews is not as good as 40 4 star reviews.
Testimonials come from people putting their heads above the parapet and vouching for a product. Look for both the name which you may or may not know and the context.
There are many awards schemes out there. The best are those used by BOTH consumers and buyers. The best known is probably the Great Taste Awards, but regional awards such as Taste of the West, or focused awards such as British Charcuterie can be precious.
For me, the critical test is whether the products are blind tasted. Judges are human and sometimes lean towards or against suppliers they know. My experience is keeping the judges in the dark when assessing products. I also look for awards that represent consumers
Testing the products on your customers can be the best and most effective Social Proof out there. Ask Suppliers for samples, and if it passes your other tests, put it on the counter and see what your customers say. Cheap and effective, and the customers, as a rule, love it.
There are various accreditations you may choose to look out for to ensure your products are safe to eat. You have a responsibility to check your suppliers are credible, and third-party accreditation is good for that.
- Are they registered with their local EHO? If not, don’t touch them with a barge pole, not only because it is illegal. If they are, it is still worth asking a few questions and checking them out. EHOs are good but not perfect police for small producers, so find a bit of extra reassurance if they have no further accreditation.
- SALSA – SAFE AND LOCAL SUPPLIER APPROVAL. This is the entry level for further accreditation and requires systems audits that are reasonable for small and medium-sized producers to afford. For independent retailers, this is a strong reassurance of good quality production processes. SALSA is sometimes not enough for getting listing in supermarkets.
- BRC Global Standards: these are above SALSA, but have levels within them leading to
different ratings such as AA+. They are generally an excellent standard.
- Custom Audits by individual Buyers, such as TESCO or M&S. Several multiple retailers will carry out their own inspections as well as or instead of BRC or SALSA. While you can’t rely on these per se, you can be sure if Tescos stock something, they have looked under every carpet and checked every temperature.
9. Points of difference
Dietary & Lifestyle
There are more diets, food intolerances and lifestyle choices around now than ever before. To become a trusted supplier into those areas is a great niche to fill. However stocking the tastiest gluten-free kosher, vegan brownies is no good if you don’t tell anyone.
Tie in your purchasing to your existing or planned target groups and campaigns so that the message spreads that all the Jewish celiac animal lovers out there know where to find you. If you can’t, then why bother buying it. These products need a route to market.
Niche Consumer awareness
Some things defy categorisation but, none the less, make for valid points of difference. The ones to look out for are the ones that add profit to your bottom line. Here are some that I’ve seen work:
- Uses the name of your village or town on the packaging
- Is funny: Dorset Knobs were great sellers for me, and that name on £12.99 tins (containing two packets of Knobs, total £6.30) was popular throughout the year
- Repackaging: products you can repack in your own branding can work well. Whole Foods have whole ranges of, e.g. olives and chilli puffs that get re-packed for sale in plastic pots. The WF names
addsvalue and margin
- Protected Food Names: Stilton, Melton Mowbray Pork Pies, Parma Ham, these all take space in consumers’ imagination supporting demand.
10. POS & Merchandising
You need all the sales material you can get when launching a product, then a dribble to support ongoing sales with a promotion or two here and there to keep it going. What can you demand from suppliers to ensure you are making the right product choice?
- Packaging: Get a sample of the packaging in front of you, or at least get pictures that show scale of both the packaging and product inside. Too often the pictures don’t tell the whole story, and the product isn’t worth the price. This can be very acute at Christmas when you often have to order products blind.
- Samples before purchasing: They say you should taste every product before it reaches your shelves. I endorse this, plus you need to taste it alongside the supermarket equivalent your customer must prefer it to; and to taste it alongside your core product range it is intended to support to see if it is a match.
- Tastings for customers: Counter tasters are crucial to driving up interest. Ask your supplier to provide the samples. If you have to open a jar for every tasting your margins will be shot.
- Merchandising: Do they have any Point of Sale printed materials? Or a nice display stand or bowl?
- Portioning: You may need specialist equipment to serve the product. Parma Ham legs require meat slicers with 13-inch blades – do you have one? Iberico legs need to be hand sliced by a person who knows what they are doing using a large leg clamp. Do you have the skills and counter space?
- Wrapping & potting: For products that are portioned and then wrapped or potted (e.g. cheese, self-serve olives), test your system on a trial product if it is new to you.
- Recipes: Recipes work. Either as little postcards, online social media content or a cunning addition to your till receipts for a week. Get supplies to let you have theirs that support their products.
- Bar codes: Get the bar codes in advance, so you are set up and ready to sell as soon as the product hits your shop floor