Each and every store has their own set of rules when it comes to purchase of a new brand or a new product. But there are certain common procedures that are followed, some of them are:
1. Vendor registration - One should provide all the trading documents to list as a vendor of the store and should get an approval from the purchase department to supply the products to the store.
2. Bar Code registration – This is to register the SKU in the store’s inventory and billing systems. In most cases there would be a bar code registration fee for all the stores when it comes to modern trade.
3. Listing and placement charges – These are charges that would apply to place the product on shelf in a place which you prefer. Just entering a store has no value unless you are visible to the consumers, and that is why these charges are coined as visibility charges.
Margin is the most constrain for many. Most of the questions are just asked to get answers which would support the retailer to demand for higher retail margins. Not all are money oriented, there are few who are really focused to give good products to their customers. But would always ask questions that would give them a surety that the products would move well on the store. Some of the questions that retailers would ask are:
1. What is the significant difference between your product and the ones that are already listed in their store ?
2. Justification for the MRP
3. Promotions that you would offer (like buy 1 get 1 free)
4. TV commercials
5. Frequency of visits and supply
There are a few prerequisites which has to be fulfilled before you think of entering the Indian physical stores.
1. Do you have the production capacity to serve the market which you have planned to supply with the same quality ?
2. Do you have a strong backup for cash flow in case of bad debts or initial improper reception for your products to sustain the business longer ?
3. What is your supply strategy ?
4. What plans do you have to handle product returns ?
5. Do you think that the product would earn you at least more than the bank interest for your investment when you answer the above questions ?