Friendly Reminder: Click the blue text above “FMCG Distributor Professional Consulting” to learn more about marketing and distributor internal management.

For suppliers hoping to join the ranks of hypermarket cooperation, providing a high-level quotation is indispensable. For hypermarket buyers, selecting suitable partners and brands from numerous suppliers is no easy task. The product quotation provided by suppliers often serves as the first “threshold” set for choosing partners. Through the quotation, buyers can not only predict the product's market competitiveness but also understand the supplier's strength and management level based on the quality of the quotation. Therefore, for suppliers, providing a high-standard quotation is the first step to establishing cooperation with hypermarkets.

I. Steps to Develop a Store Quotation

Generally speaking, to create a high-standard quotation, thorough market research must be conducted in advance. Based on the research results, determine your pricing. In terms of price, consider whether your quotation has a competitive advantage among similar products in the market, while also ensuring sufficient profit margins. Below, we discuss the steps for creating a store quotation one by one:

Preliminary Market Research Market research is something businesses must do before making any commercial decision. For suppliers, to produce a high-level quotation, thorough market research is essential. Moreover, the more detailed the preliminary research, the more advantageous it is for negotiations with the store. So, specifically, what aspects should suppliers focus on during preliminary market research?

Prices/Items of Similar Products in the Market Before entering a hypermarket, suppliers must first understand the market prices of similar products and related items. Generally, similar products vary significantly in price and item assortment across different channels. Different stores also differ in price and items due to their scale and local influence. For example, most products tend to favor large hypermarkets with significant national or international influence, which often enjoy better pricing than ordinary stores. Therefore, before entering a hypermarket, suppliers must consider their brand positioning and decide which type of hypermarket to enter. They should also understand the price range, quantity, and items of similar products in that store to serve as the basis for initial pricing.

Local Market Prices/Items for Such Products (National chain stores share data internally) For hypermarkets, price is always a sensitive factor. The same product may have price differences between regions or within the same system across different areas. Therefore, suppliers must be thoroughly familiar with local market prices for similar products before entering a hypermarket. Only then can they offer competitive quotations and justify their pricing. Remember, no matter which hypermarket you enter, the store will use internal data sharing to learn about your prices in other regions and stores. If you can grasp the price systems of different stores for similar products in advance, you naturally gain the right to “dialogue” with the hypermarket.

Product Quantity and Display of the Category in the Target Store The key to competition is “using your strengths to attack the enemy's weaknesses.” To seize the best entry point into a hypermarket, you must understand the price range of similar products and the number of products within different price ranges. Only then can you combine your product's characteristics to play to your strengths and avoid weaknesses, choosing the most favorable entry method.

Understand Category Differences Between Stores in the Same System Although stores know their internal category standards best, as a supplier, if you can proactively understand the category standards and differences within the same system based on your business, you can not only impress the store but also gain the initiative in negotiations. After all, even within the same system, due to varying operational scales, store buyers have different criteria for selecting products. If you can offer your own category suggestions based on different stores' standards, your quotation will carry weight.

Do the Math After completing preliminary research, suppliers should settle down and create the quotation based on the relevant data they have gathered. Before formulating the quotation, the first principle to grasp is: never put yourself in a passive position. On one hand, leave sufficient profit margins; on the other hand, combine market prices and product characteristics to make your pricing more competitive. Otherwise, if you blindly lower prices, you may find yourself at a disadvantage. Once you quote a price, it's like water spilled—hard to take back!

Predict Your Profit Margin Suppliers can predict their profit margins by working backward from their preliminary retail price research, combined with their product advantages and ex-factory price. Generally, when quoting for the first time, suppliers should leave ample profit margins. Remember, every product has a life cycle in the store; as the product becomes accepted by consumers, profit margins will gradually decrease.

Predict Your Expense Ratio in the Store In a sense, hypermarkets can indeed bring substantial sales, but suppliers must pay a price for this. How many of the various fees charged by different stores do you understand and master? How many items will you enter, and what expenses will normal sales of these items incur? As a supplier, you must have a clear account in your mind.

Predict Your Company's Operating/Management Cost Ratio Any enterprise, regardless of size, cannot maintain normal operations without management costs. Some inexperienced suppliers often overlook these costs, and the direct consequence is a reduction in overall profitability.

Predict the Payment Terms You Will Receive In a sense, payment terms are a crucial factor affecting supplier profitability. Many suppliers have fallen into cash flow crises due to underestimating payment terms. Therefore, for most small and medium-sized suppliers, it is wise to predict the payment terms you might receive based on your situation and incorporate the cost points related to payment terms into your quotation.

Predict Your Product Shrinkage Rate Different products have different shrinkage rates; fresh food has a particularly high shrinkage rate. Suppliers should predict potential product shrinkage based on product attributes and reflect it in the quotation. If suppliers underestimate potential shrinkage, it will directly erode profit margins.

Promotional Space For hypermarkets, promotional discounts are routine. Therefore, suppliers must leave sufficient price reduction space for promotions before quoting.

II. Notes on Submitting the Quotation

The quotation is naturally for the store buyer to review, so suppliers must cater to the buyer's “taste” when preparing it. In simple terms, know what hypermarket buyers care about and value when reviewing quotations. Generally, store buyers are also interested; when encountering a manufacturer they know nothing about, they usually pay special attention to the following aspects:

Is the Supplier's Information Complete? No one likes a sloppy supplier; everyone hopes their partner is meticulous and careful. The information in the quotation not only reflects the supplier's level but also their cooperative attitude. Therefore, suppliers must ensure the completeness of the information provided when submitting quotations.

Are the Data Provided Logical? For suppliers, the most embarrassing thing is making low-level mistakes in front of buyers. Especially for the data provided, it must be repeatedly verified. Remember, store buyers are backed by a massive data platform. Any data provided by suppliers will be scrutinized, and the results will be linked to the supplier's credibility and standards.

Completeness of Attached Documents Suppliers often need to bring many attachments when submitting quotations, such as corporate legal person certificates, business licenses, tax certificates, production permits, health permits, etc. Some documents may require originals. Therefore, suppliers should clarify in advance what attachments the store requires and the specific application process, ensuring preparedness.

Is There a Comprehensive Sales Plan? Generally, for suppliers dealing with store buyers for the first time, relying solely on smooth talk won't convince buyers to trust your product. You need to develop a multi-dimensional sales plan to enhance the buyer's favorability. The best approach is to present a complete annual promotion plan and specific proposals. Through these tangible “investments,” you can build the buyer's confidence in the product.

What Can I Get? Buyers encounter thousands of manufacturers daily. To persuade them to cooperate, you must clearly communicate through the quotation what you can bring to the hypermarket: sales growth, category enrichment, or driving store traffic through innovative promotions. In short, you must make the buyer clearly perceive the benefits they will gain and how these benefits will impact them personally.

Huang Jing, graduated from Wuhan University Law School, full-time store buyer manager, deputy general manager of Senpan Textile Trading (Shanghai) Co., Ltd., and freelance consultant for KA projects. She is a contributing writer for several professional media outlets in China. Email: marchhuangjing@yahoo.com.cn

Like this article? Feel free to click the top right corner to share it to your Moments;

About us: WeChat Name: FMCG Distributor Professional Consulting Management Account Introduction: 20 years of FMCG distributor operation and management experience, professionally addressing distributor internal issues:

Click the “Read Original” below to enter our micro-community for interactive communication and questions.

Learning and Exchange QQ Group: 344257092

Reply 1 to enter the micro-official website to view historical messages.