How to Get Product into IKEA
The multinational group designs and sells ready-to-assemble furniture, kitchen appliances and home accessories, among other useful goods and occasionally home services. It has been the world’s largest furniture retailer since at least 2008.
IKEA was founded in Sweden in 1943 by 17-year-old Ingvar Kamprad. IKEA operates 422 stores in more than 50 markets. Nearly 70% of the stores located in Europe. The best countries for IKEA are Germany (15% of sales) and the U.S. (14%). The retailer added 19 stores last year, including its first store in India in Hyderabad. Ikea received 957 million store visits in 2018 and 2.5 billion to Ikea.com. It offers roughly 9,500 products.
The company is known for its modernist designs for various types of appliances and furniture, and its interior design work is often associated with eco-friendly simplicity. In addition, the firm is known for its attention to cost control, operational details, and continuous product development, corporate attributes that allowed IKEA to lower its prices by an average of two to three percent over the decade to 2010 during a period of global expansion.
As of June 2019, there are 423 IKEA stores operating in 52 countries. The unique selling point of this retailer is the do it yourself approach. Rather than being sold pre-assembled, much of IKEA’s furniture is designed to be assembled by the customer. The company claims that this helps reduce costs and use of packaging by not shipping air; the volume of a bookcase, for example, is considerably less if it is shipped unassembled rather than assembled. This is also more practical for customers using public transport, because flat packs can be more easily carried.
What has made this retailer a top brand is the innovation it puts to business. As a buyer, you don’t need a carpenter to set the furniture and you also don’t need elaborate transportation to get it home. This is convenience which most customers are looking for. More, there is an advantage at the price level. While furniture is most times expensive, IKEA sells affordably. This affordability endears many customers to this retailer. Its sustainability moves are also very commendable.
With present research and statistics, the home décor industry is expected to garner $664.0 billion by 2020, registering a CAGR of 4.2% during the forecast period 2015-2020. Furniture, textiles and floor covering products are key components of home decor. Expansion and developments in real estate industry, have supplemented the growth of world home decor market. Globalization facilitates easier and wider availability of home decor products and designs for consumers. Moreover, growing consumer preference towards adoption and usage of eco-friendly products, known for their minimal impact on the environment, has also boosted the growth of the market.
Submit Your Product to IKEA Foods
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How to get your product into IKEA
- 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 IKEA 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 IKEA
There are several ways to get a product placed in IKEA. 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 IKEA, 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 IKEA.
1. Start with the right questions.) Before you try distributing your product to IKEA, 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 IKEA would be interested in selling your product? If you can strike a deal with IKEA, can you handle the production volume? Do you want to sell directly to IKEA, 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 IKEA? Can you sell your product at a reasonable enough profit to cover the packaging, shipping, commissions, marketing and wholesale distribution? Check IKEA 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 IKEA 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 IKEA is the right store for your product.) The relationship between you and IKEA starts with you browsing their store for competing products. If IKEA already has a similar product, it is going to be very difficult to get your product picked up. Spend some time at your local IKEA 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 IKEA.
If your company is minority or women owned, check IKEA and see if they offer specific opportunities for those designations.
4. Pitch your product to IKEA) Decide whether it will be you or a representative to present your product to IKEA. 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 IKEA, 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 IKEA. The percentage of commission verses, however generally a broker will take around 5% to represent your product to IKEA.
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 IKEA 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 IKEA paperwork.) Often IKEA will have you go through an application process. However, before submitting the paperwork required by IKEA, you should contact a buyer at IKEA 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 IKEA 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, IKEA 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 IKEA, 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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