How To Get Into Cost Cutter
Founded in 1986 by Colin Graves, by 2006, it has expanded with some 1400 shops under the banner. In May 2006, the majority of the shops were in the United Kingdom, with 65 shops in Ireland and 52 in Poland. Many locations in the United Kingdom were formally locations of Spar, whose owners switched to Cost Cutter because of cheaper fees.
Cost Cutter is a business based in the United Kingdom, primarily operating as a symbol group supplier to various independently owned convenience shops and off-licenses. It has operations in Europe basically with the headquarters in Dunnington, York, England.
The supermarket business in the United States is one that tries to connect with the individual customer. This means, the supermarkets try to address the needs and interests of individual customers. This is by offering local, international, and metropolitan products. You can get spices, meat, wine, food, and so many other food products from this type of store.
The way Cost Cutter does its business is quite different. Cost Cutter is not a retailer but a company that provides a brand face and culture to retailers. Retailers get to become members and enjoy from the emotions consumers attach to the brand.
Retailers under Cost Cutter are independent but they subscribe to a certain way of doing business. Since they have subscribed to a brand with international repute, they get to benefit enormously but they also get to conform to Cost Cutter regulations and modifications.
One of the benefits of joining a business like this is the power that lies in the large number. If there is an unfavorable government policy, it is easier for Cost Cutter to leverage on her strength to lobby and get things done in her favor. However, this may be very hard for the average retailer who is independent and alone. Getting a large group to get a voice may require time, expense, and money which the retailer may not be able to spare.
For a distributor, this is an established business that can get your products to move as fast as possible. With the awesome varieties they offer and the established customer base, it can be easily deduced that there are customers already dedicated to what they sell. However, this is a big brand and there is a high standard for the products the retailers take and thus, it may not be that easy to push your products in there. This is why networking can be very useful.
On the local sourcing of food products, Cost Cutter has been on the forefront of bringing local retailers together. These are grocery and convenience stores and they could sell a wide selection of products.
How to get your product into Cost Cutter
- 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 Cost Cutter 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 Cost Cutter
There are several ways to get a product placed in Cost Cutter. 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 Cost Cutter, 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 Cost Cutter.
1. Start with the right questions.) Before you try distributing your product to Cost Cutter, 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 Cost Cutter would be interested in selling your product? If you can strike a deal with Cost Cutter, can you handle the production volume? Do you want to sell directly to Cost Cutter, 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 Cost Cutter? Can you sell your product at a reasonable enough profit to cover the packaging, shipping, commissions, marketing and wholesale distribution? Check Cost Cutter 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 Cost Cutter 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 Cost Cutter is the right store for your product.) The relationship between you and Cost Cutter starts with you browsing their store for competing products. If Cost Cutter already has a similar product, it is going to be very difficult to get your product picked up. Spend some time at your local Cost Cutter 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 Cost Cutter.
If your company is minority or women owned, check Cost Cutter website and see if they offer specific opportunities for those designations.
4. Pitch your product to Cost Cutter.) Decide whether it will be you or a representative to present your product to Cost Cutter. 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 Cost Cutter, 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 Cost Cutter. The percentage of commission verses, however generally a broker will take around 5% to represent your product to Cost Cutter.
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 Cost Cutter 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 Cost Cutter paperwork.) Often Cost Cutter will have you go through an application process. However, before submitting the paperwork required by Cost Cutter, you should contact a buyer at Cost Cutter 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 Cost Cutter 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, Cost Cutter 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 Cost Cutter, 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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