How to get your product into Shopko
- 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
How To Get Into Shopko
Founded in 1962 and closed in June 2019, Shopko was a chain of retail stores based in Ashwaubenon, Wisconsin. The company was founded by James Ruben as ShopKo Corporation (with upper-case “K”). It opened its first store in 1962 in Green Bay.
In 1999, Shopko purchased Pamida, a regional discount chain that operated mainly in smaller communities of 3,000 to 8,000 people. Shopko operated Pamida as a separate division until 2007, when Pamida was separated from Shopko and reestablished as a separate company. In 2012, Shopko and Pamida merged into one company. Shortly after, most Pamida stores were rebranded as Shopko Hometown.
During its existence, its offerings to the market included clothing, footwear, bedding, furniture, jewelry, beauty products, electronics, market, housewares, and contact lenses.
By the time it went out of business, the company operated 363 stores in 24 states including, but not limited to, California, Iowa, Idaho, Illinois, Indiana, Kansas, Kentucky, Michigan, Minnesota, Missouri, Montana, Nebraska, Nevada, North Dakota, Ohio, Oregon, South Dakota, Utah, Washington, Wisconsin, and Wyoming. Stores were typically placed in small to mid-sized communities. Most Shopko stores were located in strip malls, shopping malls, power centers, or freestanding locations. Shopko, with partnerships from Green Bay, Wisconsin-based Bellin Health and other local hospitals, also operated walk-in clinics inside its stores called FastCare.
Customers who shopped there can give accounts of how the stores were. One of the customers posted on yelp.com that: “This is quite a store. It’s like a cross between Big Lots and Wal-Mart. They’ve got everything here short of fresh food. If you need Packers gear, this is a great place to stop. They’ve also got a Payless Shoes mini store inside.
I will say that you do need to be a savvy shopper, though. I saw a kitchen mat selling for $49. I bought the exact same mat at Big Lots for $15.
Maybe I just like the novelty of a new store (new to me, anyway). But Shopko is pretty neat.”
For a distributor, this used to be an established store that can get your products to move as fast as possible. With the awesome varieties they offered and the established customer base, it could be easily deduced that there are customers already dedicated to what they sell. However, this was a big retailer and there was a high standard for products they took in.
Their closing up would be very painful to several dedicated customer who have always done business with the store for quite long. The company tried to stay on by downsizing but the liabilities kept going over the assets. It would be remembered by many customers that this was the store that offered “discount on prices, and not on quality”.
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.
Sometimes easier said than done, however you must get on Shopko radar.
Call the Shopko corporate phone number and ask for the names of the buyer and assistant buyers in your category.
Always leave voicemail with whomever the dispatch will connect you.
Use that information to connect with them on LinkedIn, RangeMe and any other professional social platform.
Ask your representative at your trade bureau to connect you to the Shopko buyers as they will potentially have a better history.
Use advertising, public relations and marketing to make your brand known to Shopko buyer through 3rd party websites & industry media sources.
Be everywhere that they look, the key is to position your brand as the obvious choice when Shopko is looking to either refill a slot or create a new category.
Latch on to the news of the day and any trend that will make your product fill that niche whether that be Non-GMO or Vegan Leather for example.
Investing in your brand can only benefit your opportunities in the future. As being “top of mind” will have a ripple effect when you physically present your product at a Shopko meeting or trade show in the future.
Shopko buyers typically got to their position by picking “winners” and know how to see through the fluff.
Focus on the numbers, know your bottom dollar during a negotiation and how fees and chargebacks may cut into your position.
Know that long term success may outweigh short term sales, however financing large purchase orders from Shopko when the net result is negative is not sustainable.
Understand the playing field and the other brands that are in your space, what they are offering as promotion and pricing and how you can stand out against them.
By knowing that each buyer at Shopko probably knows more than you do, take an active listening approach to sales and understand that no is a perfectly acceptable answer that may have saved you millions of dollars on the backend.
How to Submit a Product to Shopko
There are several ways to get a product placed in Shopko. 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 Shopko, 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 Shopko.
1. Start with the right questions.) Before you try distributing your product to Shopko, 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 Shopko would be interested in selling your product? If you can strike a deal with Shopko, can you handle the production volume? Do you want to sell directly to Shopko, 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 Shopko? Can you sell your product at a reasonable enough profit to cover the packaging, shipping, commissions, marketing and wholesale distribution? Check Shopko 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. Retailers like Shopko 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 is the right store for your product.) The relationship between you and Shopko starts with you browsing their store for competing products. If Shopko already has a similar product, it is going to be very difficult to get your product picked up. Spend some time at your local Shopko 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 Shopko.
If your company is minority or women owned, check Shopko website and see if they offer specific opportunities for those designations.
4. Pitch your product to Shopko. Decide whether it will be you or a representative to present your product to Shopko. 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 Shopko, 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 Shopko. The percentage of commission verses, however generally a broker will take around 5% to represent your product too Shopko.
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 Shopko, please give us a call for a recommendation. It could save you a huge headache and a lot of money.
5. Complete the required Shopko paperwork. Often Shopko will have you go through an application process. However, before submitting the paperwork required by Shopko, you should contact a buyer at Shopko 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 Shopko 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, Shopko 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 Shopko, 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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