Submit Your Product to Citgo Foods
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How To Get Into Citgo
Founded in 1910 by American businessman Henry L. Doherty as the Cities Service Co, Citgo was the name given when the company began to sell energy products to customers. Citgo is a United States-based refiner, transporter, and marketer of transportation fuels, lubricants, petrochemicals, and other industrial products. It is headquartered in the Energy Corridor area of Houston. PDVSA, a state-owned company of the Venezuelan government owns the majority of the company.
The big break started with the finding and developing of supplies of natural gas. This move was backed by major discoveries at Augusta, Kansas, in 1914, and in El Dorado a year later. In 1928, a Cities Service subsidiary, Empire Oil & Refining, discovered the Oklahoma City field, one of the world’s largest. Another participated in the discovery of the East Texas field, which, in its time, was the most sensational on the globe.
Cities Service Company inaugurated the use of the Citgo brand in 1965 (officially styled “CITGO”) for its refining, marketing and retail petroleum businesses (which became known internally as the RMT Division, for Refining, Marketing, and Transportation). CITGO continued to be only a trademark, and not a company name, until the 1983 sale of what had been the RMT Division of Cities Service to Southland Corporation.
However, due to the ties of the company with the Venezuelan government, it has had to suffer massive public rejection and sanctions. There has been the separation of the part of the company from the parent company which is the PDVSA because of the bad publicity and the sanctions of OPEC against the company. But at the time it was at its peak, it was one of the highest and largest refiner and retailer of crude of products as it became at a particular time, the only source of revenue for the Venezuelan government.
The hyperinflation, foreign debts, massive price cuts, and unguarded social welfare schemes have really affected the economy of the country and its sole reliance on the exploration of oil has drawn problems for it.
However, the oil company has shown a determination to weather the storm facing it by looking for ways of restoring the good image of the company and severing all ties it may have to the parent company. Though there have been talks that the new parent may face a lot of legal battles but the fight is quite commendable.
The world basically thrives on energy. From automobiles, to machineries, to plants, and even household appliances, there has to be something to ignite the fuse and propel some drive. This is where the work of energy companies comes in. The energy companies are looking at ways of getting their customers the best and efficient value in energy they can buy. This is what Citgo does. They produce highly efficient energy products that make your engines last longer. They go into a lot of research on how to offer more than energy to their customers. People are looking at buying solutions – Citgo offers it in a well rounded way.
How to get your product into Citgo
- Understand you client: Before you spend a lot of time and money creating a product, you should know if anyone will want to buy it. Learn more about Market Research
- Learn if it’s protectable: Know if you can defend your product against cheap copies if it gets knocked off. Learn more about Copyright and Patent your product
- Test your product: Make sure that there’s a demand for your product and the customer understands what you are selling when it’s on the shelf and nobody is there to explain it. Learn more about Product Testing
- Perfect your pitch: Before you speak to decision makers, know your numbers, know your retailer and know your logistics in and out. Learn more about Pitching Your Product
- Don’t do it alone: If you haven’t been successful in retail before, a secret of success is that you can’t do it alone. Having great sales staff, customer support and marketing partners can take you from zero to success faster than if you tried on your own. Learn more about Retail Partnerships
Contact Citgo Buyer
Do not trust any “list” of buyers.
Typically retail buyers change either companies or positions every few years. This strategy helps retailers know that their buyers are not taking “kick-backs” and are selecting the very best product for the very best position each time.
Buyers are typically held to a very rigorous standard of sell-through volume that they must hit and because of this they are risk averse. Your job as a supplier or vendor is to convince them that the buyers going into the stores not only know about what you’re selling but are actively seeking the product in the store currently.
How to Submit a Product to Citgo
There are several ways to get a product placed in Citgo. However, most entrepreneurs only dream about getting their product distributed to major retailers, few actually do it. We have experienced a significant rise in interest since the show Shark Tank started airing on NBC. Mr. Checkout has had the pleasure of working with a few Shark Tank success stories such as KISStixx and 180 Party Cups which are now currently being distributed around the country to stores like Walmart, Target, Kroger, 7-Eleven and more.
If you envision your product would be a good fit for Citgo, we have a few steps to help you get your product on their shelves.
Here are the 6 steps you need to take to have your product placed in Citgo.
1. Start with the right questions.) Before you try distributing your product to Citgo, you need to ask yourself a few basic questions. Do you need to build demand for your product, or is there already a demand for it? Do you know that Citgo would be interested in selling your product? If you can strike a deal with Citgo, can you handle the production volume? Do you want to sell directly to Citgo, or do you want to license your product to a manufacturer that will handle distribution?
2. Be prepared to profit.) Does your product offer enough of a profit margin for Citgo? Can you sell your product at a reasonable enough profit to cover the packaging, shipping, commissions, marketing and wholesale distribution? Check Citgo guidelines for other fees that you will have to build into the cost of your product in order for you to be able to turn enough of a profit to make the effort worth your while. If you work with a discount retailer, they will try to strip your profits down to zero in order to keep their prices as low as possible.
The typical breakdown of margins are: If a products costs $1 to produce, that product will retail for $4. That product that retails for $4 will wholesale for $2 to distributors and stores that purchase direct. Big box retailers like Citgo may offer to pay $1.25 to the manufacturer if the product costs $1 to produce. That is the typical profit margin.
3. Determine if Citgo is the right store for your product.) The relationship between you and Citgo starts with you browsing their store for competing products. If Citgo already has a similar product, it is going to be very difficult to get your product picked up. Spend some time at your local Citgo to see what kind of products they are selling, speak to the manager and see if he thinks your product will sell well in their store. Picture in which zone your product would best fit on the shelf and keep in mind that the most precious asset that these big box stores value are their shelf space. Keep this information in mind when you are preparing your presentation to Citgo.
If your company is minority or women owned, check Citgo website and see if they offer specific opportunities for those designations.
4. Pitch your product to Citgo.) Decide whether it will be you or a representative to present your product to Citgo. Your presentation depends heavily on your strengths as a businessperson as they will most likely ask financial questions and logistics questions.
It’s common for companies to hire a broker to pitch their product to Citgo, as it will be more likely that your product will make it to the next stage if the individual pitching your product has industry knowledge or a personal relationship with Citgo. The percentage of commission verses, however generally a broker will take around 5% to represent your product to Citgo.
We at Mr. Checkout have experience dealing with brokers and know that there are several retail brokers that have poor business practices that can potentially damage your brand. If you are seeking a legitimate Citgo broker, please give us a call for a recommendation. It could save you a huge headache and a lot of money.
5. Complete the required Citgo paperwork.) Often Citgo will have you go through an application process. However, before submitting the paperwork required by Citgo, you should contact a buyer at Citgo and let them know your intentions. Having a contact inside of the company will potentially move your application more smoothly through the process.
6. Anticipate the need for increased volume.) Having Citgo agree to stock your product will most likely mean a significant increase in volume. You should be prepared to ramp up your production and informing your manufacturer of this opportunity.
Having production, logistics and distribution to sync is not only difficult, it requires a significant amount of time invested in customer relations. Also, Citgo may have stipulations in the contract that may penalize you for delays in shipping and production. Have an attorney explain all contracts to you if you don’t understand the terms.
If you’re looking to sell your product to Citgo, be sure to thoroughly assess the marketplace, carefully prepare for production growth, and take full advantage of resources available to help you grow your business.
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