I’ve spent a lot of my business life working in and around consumer goods companies. Now, the FMCG world is an interesting place, dominated by the uneasy relationships between the big retailers and the smaller suppliers.
Over recent years the situation has become even more polarised, with the retail giants taking and even more dominant place on our high-street, as this table shows:
1960 – Independents 60% / Supermarket 20% / Co-ops 20%
1980 – Independents 20% / Supermarket 60% / Co-ops 20%
2000 – Independents 08% / Supermarket 85% / Co-ops 07%
2010 – Independents 05% / Supermarket 90% / Co-ops 05%
In contrast to this (and putting aside the giants such as unilever) the business landscape on the supplier side has been moving towards ever smaller firms. With barriers to entry falling, more and more budding entrepreneurs are starting their own product companies in order to turn their pipe dream into a revenue stream.
These start-ups quickly find that working with retail can be a logistical and financial challenge as the retailer’s methods are designed to extract the maximum profit for themselves, whilst passing all the risk back to their suppliers. In terms of working capital, the game is so one-sided that some retailers have become banks yet the suppliers have to resort to accounts receivable factoring.
However, help is at hand. With the right knowledge and processes it is perfectly possible to profitably sell to stores that dominate the high street. If you know how retail works then improving your cash flow can be easy. As always, success for business relies on understanding the rules of the game and constructing the business processes to match.
That is why I’ve created a free report:
This special report is designed to give an insight into how the relationship works, and give some useful tips on how to make it work for you, the supplier.
Click the link and get your copy.