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The main fees for products entering supermarkets include entry fees, end-cap fees, pallet display fees, DM (direct mail) fees, festival fees, anniversary fees, year-end rebates, payment terms (early settlement fees), gross margin compensation, and spoilage compensation for fresh products.

Here are some examples of supermarket fees:

1. Trust-Mart:

  • General entry fee: 300 RMB per barcode; end-cap fee: 300 RMB per half month; pallet display fee: 500 RMB per half month; DM fee: 500 RMB per item per event (each event lasts 14 days); festival fee: 500 RMB per event (mainly for Dragon Boat Festival, May Day, Mid-Autumn Festival, National Day, New Year's Day, Spring Festival, etc.); anniversary fee: 500 RMB per event; year-end rebate: within 2%; payment terms: generally monthly settlement within 15-30 days (i.e., 60 days after delivery); fresh products: settlement within 15 days after delivery, spoilage compensation within 5%; well-known brands and special products (salt, cigarettes) are cash purchases. It is the most cumbersome in terms of fees among all well-known supermarkets. It is recommended that suppliers find a female salesperson with good patience!

2. Metro:

  • General entry fee: 1500 RMB per barcode (with a minimum total entry fee of 10,000 RMB); end-cap fee: 1500 RMB per event (14 days); pallet display fee: 1500 RMB per event (14 days); DM fee: 1500 RMB per item per event (14 days); year-end rebate: within 2%; no festival or anniversary fees, but an annual fee of 1% (calculated based on the previous year's sales at contract renewal, usually collected under the guise of advertising support); general payment terms: 45-60 days after delivery; fresh products: 30 days after delivery, spoilage compensation within 5%; well-known brands: 7 days after delivery; special products: cash purchase. Initial entry fees are higher, but subsequent cooperation is the simplest among all supermarkets. It is recommended that suppliers find a person with decision-making authority to negotiate and handle business.

3. Walmart:

  • Generally no entry fee (but there is a first-order free gift, which can be negotiated, usually based on one pallet); no end-cap or pallet display fees; DM fee: 2000 RMB per item per event (twice a year, for Dragon Boat Festival and Spring Festival); year-end rebate: within 2%; gross margin compensation (a fee charged to suppliers when the store's gross margin is low) is collected monthly ranging from 1000 to 3000 RMB (collected before monthly inventory based on sales and communication with the buyer, sometimes not collected); general payment terms: 30-60 days after delivery; fresh products: 15 days after delivery, spoilage compensation within 5%; well-known brands and special products are usually cash purchases. Sam's Club has lower fees compared to Walmart Supercenters, but the selection and elimination process is strict. The entry threshold is the lowest, but there is an uncertain gross margin compensation and a strict elimination system (strict control over total products). It is recommended that suppliers find a capable supervisor to handle business.

4. Ito-Yokado (Chengdu):

    1. Every year, a new contract is signed at the end of April according to the Japanese fiscal year, which is the only fee for the year. We paid 2000 RMB per year.
    1. New product entry has two types: (1) For each new product you add, they delete one of your existing products, considering their category. (2) Pay a fee, about 100 RMB per SKU.
    1. No festival fees.
    1. No DM fees, but when submitting DM products, they require novelty and prefer fun activities with creative gifts (usually 14 days per cycle, 7 days during holidays). If your product is on DM, you get an end-cap or pallet display. No fee. After the DM period, if your product sells poorly, they will replace it with better-selling products. You can also buy the end-cap; Shulei often buys end-caps for about 3000 RMB per month.
    1. Payment terms are generally monthly settlement; no delays have been observed (in Chengdu for over four years), and they have a good reputation in the industry.
    1. No management fee for promotional staff, but long-term promotional ladies must pay a 300 RMB clothing deposit and a 50 RMB training fee upon first entry. Clothing is depreciated. Temporary promotional ladies pay a 50 RMB deposit and a 10 RMB processing fee. The 50 RMB is refundable. They can wear the supplier's own uniform.
    1. Ito-Yokado also has a food supermarket on the basement floor, which is very busy. There are 6 end-caps for the washing and chemical section at the checkout area, costing 350 RMB per month. Ito-Yokado is an easy-to-deal-with mall, and its purchasing staff are of high quality, higher than many similar malls.

Its retail gross margin is relatively high, with general product pricing adding 20-30 percentage points, and DM at least 5 points. However, its service is excellent, and it is very popular in Chengdu.

Additional examples of supermarket fees:

  1. Supermarkets have formed a tacit understanding on fees:
  • Carrefour Southwest (Chongqing and Chengdu, two stores each): Negotiated in Chongqing for entry. New product entry (without account) fee: 6500 RMB; shelf fee: 1000 RMB per SKU; new barcode fee: 300 RMB per barcode; can do 4 festivals per year at 500 RMB each; new store sponsorship fee: 500 RMB per store; DM, pallet, cart, and special shelf fees are relatively flexible and relationship-dependent. Carrefour East, South, and Central China stores: Negotiated in Shanghai, with account, barcode fee is 1000 RMB per barcode.
  1. Metro Southwest (Chongqing, Chengdu): Negotiated at a trade fair for 4 SKUs with an entry fee of 2000 RMB; pallet and activities are extra. Now, Metro stores nationwide negotiate in Shanghai with a fee of 1000 RMB per barcode.
  2. Trust-Mart: In Chengdu, with 7 stores, without an account, 8 series of barcodes cost 85,000 RMB, with each store getting one end-cap.
  3. Nanjing Suguo: In 2001, with 142 stores (including franchise convenience stores), we entered 50 relatively large stores with 2 series for 8000 RMB entry, and selected pallet displays at 300 RMB per month. It took one month to negotiate.
  4. Walmart: Can be submitted by individual stores or negotiated in Shenzhen, depending on the market attractiveness of the product. We entered with 4 series at 5000 RMB per store, with other fees being flexible.
  5. Zhuhai Baihe Supermarket Chain:
    1. Annual festival sponsorship fee: 1000 RMB (once a year).
    1. New product entry: 500 RMB per barcode.
    1. A 5-layer display fee: about 200 RMB.
    1. Promotion management fee: 30 RMB per month.
    1. If settlement is on a pay-as-you-sell basis and a thousand yuan is stolen by a thief midway, it's your bad luck; no invoice is issued.
    1. Long-term promotional ladies must pay a 350 RMB deposit upon first entry.

Negotiation Techniques for Getting Products into Supermarkets

(1) Full Preparation Before Negotiation

  1. Understand in detail the average price of the supermarket's fee items and the prices paid by competitors to determine your psychological bottom line and maximum limit for this negotiation.
  2. Correctly assess your product's position in the supermarket, its influence in the entire category, monthly sales, shelf display, distribution status, and competitor situation. The more detailed, the better.
  3. Understand the negotiator's background: including personal background, hobbies, work tasks, and current evaluations by superiors and colleagues. Sometimes an insignificant internal piece of information can affect the entire negotiation process.
  4. Try not to schedule negotiations on days when the other party is in a bad mood. Learn to gather intelligence and read people. If the other party received a bonus yesterday, today is a good day to negotiate.

(2) Skills in Bargaining

  1. Learn the basic concession rule: Let's take a simple example: we quote 300 RMB, the other party wants us to reduce to 100 RMB, but the actual acceptance point for both sides is 150 RMB. How should we concede? (A) 300-250-200-150 (B) 300-280-240-150 (C) 300-200-170-150. A's method is to reduce by 50 each time until 150, then stop; B's method is 20-40-90, tight first then loose; C's method is 100-30-20, loose first then tight. The answer is C. A's method only makes the other party expect another 50 reduction to reach their 100; B's method is the stupidest, as it only makes the other party expect a larger concession. The concession of loose first then tight is the most scientific. We should let the other party know that our concessions are gradually approaching the bottom line, and each concession costs us dearly. At the same time, the number of concessions should be as few as possible (2-3 times); the speed of concessions should be as slow as possible.
  2. The reason is simple: multiple concessions and quick concessions will make the other party think we still have a lot of room.
  3. Learn to "package" (tie-in): Packaging means bundling negotiation issues or attaching other conditions to the negotiation of an issue. In simple terms, packaging means not making concessions without conditions. For example, if we have 5 issues, we can package points 1 and 4: if the other party concedes on point 1, we concede on point 4. Another situation is that we concede on point 5, but the other party must agree to point 6, which was not originally mentioned in the negotiation. This part can compensate for our loss on point 5. In short, packaging is an effective interest-guaranteeing technique, and flexible use of "packaging" will accelerate the negotiation process. A little tip: sometimes we should reserve some issues that are actually easy for us, and proactively concede on them at critical moments to gain the other party's "repayment." For example, if the other party insists on 24-hour delivery after order placement, we can actually do it, but first tell them: "There shouldn't be a big problem, but we can't rule out delays during busy times. Let's discuss other matters first." Later, when price negotiations reach a deadlock, we can bring up the earlier issue: "Alright, I promise to ensure delivery within 24 hours under any circumstances. How about you make a concession on the price?"
  4. Learn role-playing: Formal negotiations have a complex role system: black face (sticking to one's position), white face (maintaining friendly relations), chief representative, and for larger negotiations, hardliners and sweepers. In a sense, the more important the negotiation, the more people attend, usually forming an odd-numbered negotiation circle to allow voting when necessary. Of course, negotiating with supermarkets doesn't require such formality. Usually, we are alone, but this person must learn to switch roles: smile when needed, and throw a notebook when angry. But be careful: do not bring personal emotions into the negotiation; your smile and anger are just "performance" for work, and don't actually get angry because you need to show anger.
  5. Learn some "push and pull" skills: To stick to your position, sometimes you should invent a "superior." Tell the other party: "This condition is a bit tricky and requires approval from our company's leadership." After getting permission, step out to call your superior and schedule a callback in 15 minutes. Return with a serious face: "They are considering it, but I think it's unlikely." After 15 minutes, the phone rings, you answer: "Oh, oh, I see, I see." Then with a grim face, tell the other party: "We really cannot accept this condition; this is the final decision." Of course, a few shameless ones might say: "Isn't your superior XXX? I know him, I'll call him." And they pull out their phone and call your superior. At that point, your superior should also make excuses: "Ah, I would normally give this face, but this time it's the management's decision, and I can't decide alone." The other party will definitely consider giving up this condition. Pushing the problem to the majority makes it difficult for the other party to act; this is a common negotiation tactic, which we call "push." When negotiating with supermarkets, we are usually in a weak position, meaning we are asking for something. When asking, we should make appropriate concessions, but there is some skill in how to give. Sometimes the other party asks for a 5% concession on issue A, but we unexpectedly say, "5%? That's too little. A famous company like yours deserves 7% (of course, you should calculate that this 2% is not a big deal)." The other party will be very happy, then discuss issue B. Issue B is actually the most critical interest, but at this point you can firmly say: "We cannot concede on this issue. You see, I'm not good at negotiating. Just now on A, you asked for 5%, but I gave 7%. So, on this issue, I really can't concede anymore." Using a small gain to highlight your principles and take the initiative is called "take."

(3) Breaking Negotiation Deadlocks Negotiations can sometimes reach a deadlock due to both sides' insistence. At this point, we should learn to call a timeout and reschedule the next negotiation time: For both parties in a deadlock, this period is very precious. We should think of more ways to ensure the smooth conclusion of subsequent negotiations. Indirect methods:

  • Approach the other party or related personnel as a friend (note: this is impossible in more formal negotiations). Try to extract information beneficial to the negotiation, understand the key to the deadlock, and to some extent probe the other party's bottom line.
  1. Conduct the above process through a third party.
  2. Create goodwill, such as small gifts, greeting cards, etc. (requires knowing the other party well).
  3. Direct methods: a. Maintain contact, emphasize the agreements already reached, and suggest both sides cherish them. b. Provide additional packaging for the other party to choose. c. Consider appropriate concessions, preferably on minor issues.

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