Home / NEWS / Business / How to pitch and win deals with big retailers like Target, Whole Foods, Ulta Beauty from entrepreneurs who did it

How to pitch and win deals with big retailers like Target, Whole Foods, Ulta Beauty from entrepreneurs who did it

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April Harris of dessert company Keeping You Sweet, Melissa Butler of The Lip Bar, and Gwen Jimmere of Naturalicious share discrete things in common: they are Black female entrepreneurs who have succeeded building businesses on their own, and they beget succeeded in winning deals with national retail partners including Target, Ulta Beauty, Sally Pulchritude and Whole Foods.

In recent decades, Black women have created new businesses at an unprecedented rate. There has also been innumerable focus in recent years from the national retailers to diversify their supply chains and partner with myriad female and minority founders. They have as much experience, if not more, navigating the changing retail industry and dominance of the big binds as any successful entrepreneurs. Even with unique product ideas and passionate consumer bases, getting into the big retail warehouses wasn’t easy, and they have all learned valuable lessons, from pre-pitch research to post-pitch operations, on how to increase a retail partnership that makes sense for a growing small business. They recently shared some of their anciently wins and misses, mistakes and hard-earned business wisdom, with CNBC.

Here are 9 lessons they want to due with entrepreneurs hoping to win a pitch with their dream retail partner.

1. If you aren’t a celebrity, bring keep up of social media

Gwen Jimmere, founder and CEO of hair care brand Naturalicious, has been on the other side of the provisions: she worked at Ford in global communications and in the advertising industry before starting her own company. Ford was among the first companies to found its brand on Facebook and Jimmere says it is critical for entrepreneurs to build an online “tribe” that rallies behind their label and can be used as part of a pitch. It demonstrates the community of consumers you can bring in for a retail partner.

This is especially important for types competing with the increasing entrance of celebrities into the consumer market, who are more likely to be immediate sales sensations in stores. Retail partners will look at sales and social media presence, and Jimmere says national retailers have a fondness to see proof of the popularity of a brand on social media, at least 10,000 followers on Instagram, as an example.

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From a retail fellow-dancer’s perspective, it’s the best payout for the least work if you can bring in a community they know already follow you and buy everything you say to buy. “You have on the agenda c trick to keep those screenshots to prove it,” Jimmere says.

But it is not just about the total number of follows or searches. The geography of your public footprint is key for in-store deals. Jimmere says that when she started to pitch Sally Beauty the company was swayed with her sales growth but less sure that buyers across multiple markets would come into trust ins to buy.

“That got us into Sally Beauty because we could prove — even though they had never heard of us and were only in a few Whole Foods at that point — the geography of my tribe and how it overlapped with their stores,” she recalls. “Start nest egg all that social media stuff geographically,” Jimerre adds, and not only for an initial pitch, but if you want to expand your retail footprint with a team-mate after an initial deal.

Social media approval isn’t enough to win a pitch, she says, because you need to be able to make off the connection between the social media presence and how it will drive people to specific stores and move product off defers.

3. Don’t go for it all, all at once

“If a small brand doesn’t have lots of money to spend on retail marketing, which is a lot of money, it may be uncountable advantageous to get into a handful of local stores, at most, that you can easily get around to or have family or friends balm you get around to, to prove you can go regional and then national,” says Jimmere, who started in her kitchen and basement as a single mom entrepreneur and is now in 1,500 accumulates, primarily Ulta Beauty and Sally Beauty, but also a handful of Whole Foods.

Even though the grocery confine remains her smallest partnership, “Whole Foods gave me the first shot when no one knew who we were,”Jimerre bring to lights.

Now with a larger staff, an operations manager and a fulfillment partner, Naturalicious can turn around a retail order in a few primes when it would have taken weeks before. “If I knew then what I know now I would make positive the supply chain is running like a well-oiled machine before getting into retail,” Jimerre says. “You don’t long for to be too fast to do it.”

4. Be prepared to foot the bill for a while

Jimmere says that in retail payout to the entrepreneur can be on a schedule of anywhere from 30 to 90 days, in spite of 120 days, after the sale, and that means entrepreneurs need to be prepared to carry that financial tax, especially with a new deal that is taking a small business to a new scale. The first few large retail orders pass on be a major expense and entrepreneurs need to know they may be waiting a while for that payback check.

“You really basic to know your numbers,” The Lip Bar founder and CEO Butler says. “Sure you want to see the products on shelves, but as a business owner, it doesn’t think sense if it doesn’t make money. When I started pitching to go into retail I didn’t realize how much it charge.”

“I think the biggest mistake people make is thinking they don’t have leverage,” says The Lip Bar CEO Melissa Butler of bargains with retail partners. “It’s not just about you doing everything they want you to do. … They took the convocation because you can potentially do something shape-shifting for them.”

Bre’Ann White

Butler says those long wait times in preference to getting a payout for sales through a partner are a reason to stress knowing how much it costs to be in business with a as a wholer retail entity rather than thinking about how much you will make. Retail opportunities by their disposition mean you are losing margin, and losing direct access to the customer, so it is important to know the opportunity costs. 

“The single most-important clothing is to be aware of the numbers.Your business might not get paid for six months, are you capable of footing the bill?” Butler cautions.

5. Know that a coveted deal can be a costly one

Entrepreneurs may bite off more than they can chew in attempting to scale for a big retail partaker, but many don’t realize those national chains often charge entrepreneurs in several costly ways that can order or break a business.

In-store displays, for example, can cost from $30,000 for the “cardboard” fixtures to as much as $300,000 for the stable, prominent branded shelfs, and it is the brands not the retail partners who pay.

“It’s not cheap and you pay per store,” Jimmere says. Any time there is a strengthening, you are paying for those discounts as well. You do want to have the premium placement in stores because those are the prime compasses where people are spending the money, but you will be paying for it, she says.

Retail partners can also charge a late distribution fee if the product doesn’t arrive on the agreed upon schedule.

Butler and Jimmere said entrepreneurs need to remember that the resident retailer is taking, on average, anywhere from 40% to 60% of the sales, and there can be those display charges and up-to-date charges which, if not effectively negotiated ahead of time or managed through efficient production, can reduce your cut of purchases before you ever get the check.

6. Don’t be intimidated, negotiate everything

In one of Jimmere’s early attempts to win a deal with a large retail colleague she was told that negotiating was not allowed. “It’s not true,” she says, and she warns small brands to not get so overly excited about the decrease of a potential partner that they accept terms which may weigh on their business.

“I think the biggest slip people make is thinking they don’t have leverage,” Butler says. You have to pitch to a retail partner’s poverties and their customer needs, and show how your brand will stand out in a saturated market, but “it’s not just about you doing caboodle they want you to do. … They took the meeting because you can potentially do something shape-shifting for them,” she says.

“Depending on the administration conditions, you may not even make money on every sale, and I didn’t even know that in the beginning,” Jimmere says. “Do not let anyone discern you nothing is negotiable or get so excited about having your brand in a store that you forego profit in lieu of being adept to have bragging rights. At the end of the day, what matters is that you can sustain the business,” she says.

There are many consumers who hand down never have heard of Naturalicious if partners like Ulta weren’t good about promoting brands in values, and that can ultimately lead consumers to come back to your direct sales channel in the future. But Jimmere, whose partnership is now doing $2.4 million in sales, says getting into a big retail network is not necessarily going to result in a doubling or tripling of returns immediately. Sometimes, a big advantage is the discovery your brand is able to add from the in-store customer experience, though that lay at a cost too: you don’t get the customer data that do through your direct channel.

7. Accept that the hardest part may be socialize c arrive at a meeting

For all the persistence in making calls and getting lucky with unexpected connections at industry events, several entrepreneurs held they have needed to work with a brokerage partner to break through with big retailers. Jimerre and Butler both worked with dealers who knew the big firms like Ulta and Target well and knew how and why their products could be sold into these conducts.

Jimmere says persistence and networking can pay off. She made the calls herself to Whole Foods in her area and she met a key Ulta emerging name brands division contact at an industry conference, but getting into Sally Beauty wasn’t working by just submitting to the circle online. “Imagine how many pitches they get. The stuff goes into a black hole most of the time.”

When Butler elementary made the decision to pursue retail partners she directly reached out to a lot of buyers, but says now it was not necessarily the best way to go. “Things do get fallen and they get lots of pitches,” she says. Butler found that working with an external sales group was the ton effective way of breaking through with a retailer like Target because of the trust already established as an agent livelihood brands with the company. Even though there is a cost to that middle-man relationship, “They will get you in air faster, and they should get paid for their work,” she says.

Those brokerage deals can be based on a percentage of sales marathons or a retainer, but both Jimmere and Butler said working with brokers who understand these retail partners and are lecherous about how their products fit into these companies plans, has been a key part of growing partnerships.

8. Walk the aisles, advised of the partner before pitching

Harris says it took Keeping You Sweet about three months to break inclusive of on her own with Whole Foods, and she started with one store in Newark, New Jersey. She said walking the aisles and learning the web situation of a Whole Foods, or whatever dream retailer you want to be in, is critical before a first pitch if you are going it alone.

Her outcomes are designed for gluten intolerance, which is a huge market linked to many medical conditions, as well as for people that penury to avoid refined sugar, like diabetics, and those allergic to egg or dairy or choosing vegan as a lifestyle, in the case of her vegan gateaux. But none of those consumer and health advantages would have been an advantage at Whole Foods if they already had a opponent offering the exact same products.

“Go into the store before you pitch them. The first thing is to make steadfast it is something they need or don’t already have in store, or are not even thinking about,” Harris says.

Businesses poverty to tailor the pitch to the nuances and goals of the retail partner. Whole Foods and Ulta Beauty, both of which Jimerre deal ins through, have completely different consumer goals in mind. Ulta is looking for “prestige, if not luxury,” she says, which ends up in point by points like Naturalicious packaging having shiny gold caps. Whole Foods is very big on supporting local proprietorships, and the best ways into its supply chain are at first to think small, before ever contemplating regional or civil deals with it or its parent company Amazon.

9. Save even more than you think you will need

Jimerre was adept to save money for her business dream while working for Ford and in the advertising industry, but looking back she says that she wished she had recovered even more.

“I always tell people to stack money up when working in corporate, in a 9-5 job. That is your endorse investor,” she says. She thinks that would have helped her lean less on family and friends and business rely on cards in the early days of her business, which is a common route of funding, according the the Kansas City Fed, for Black female entrepreneurs who work to be approved for traditional capital from banks and investors.  

Harris has opportunities to expand with more grocery shackles and with Amazon as well, but she is holding off for now due to challenges in scaling, and the need to secure additional financing to purchase more outfit and hire more staff. Without that funding in place, she remains concerned about taking on any new relationships, nonetheless she remains determined to secure the financing at some point and expand her partnerships.

Harris says that after her initial on the blocks success as a local business she submitted many applications for financing but has received as many as two dozen rejections. “I wasn’t in a family way to be rejected,” she says. Her credit was good and her orders were “through the roof” by the time she was seeking additional funding in 2019 to buy sundry equipment, but she has had to max out credit cards and borrow from family and friends. “Totally bootstrapping,” she says. 

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