by Eddie Mugulusi
(In this picture: myself and one of our sales reps at a retail outlet on a resupply visit for #ShakeEnkooge)
For a while there back in 2017, I was convinced that for us to truly market and sell our products as a business, we had to avail them in supermarkets. So when we began the bottling of #ShakeKetchup around that time, our go-to-market strategy was premised on getting the product onto as many supermarket shelves as possible. We aggressively pursued this strategy and within weeks the Ketchup had significant presence in supermarkets in and around Kampala. This presence was surely fulfilling but the money, not so much.
I soon realised that for a small business owner who was just starting out, opting to use supermarkets entirely wasn’t a good idea. For starters supermarkets hardly ever pay cash upfront for items received. You have to wait for them to sell before you can collect your money. This is a terrible arrangement if you are just starting out. It ties up all your would be revenue for several weeks or even months. It took some supermarkets over 10 weeks to sell off that initial carton of our Ketchup. On our end, we carried on with building awareness mostly using paid advertising on social media. Unfortunately we didn’t do it fast enough. Even then, it always takes time to get potential customers to try a new product by making that first purchase. As a result we nearly ran out of operational cash. The business was spending cash daily but very little was coming in. When this happens, your business risks collapsing because there is just not enough money to meet day to day expenses.
So what is the alternative? Let’s first of all agree that more than anything else, small businesses need an instant inflow of cash (sales revenue) as soon they are open. I have since discovered that this is more possible when you deal with retail outlets compared to supermarkets. It’s easier to talk a retailer into paying cash for a product than it is with supermarkets. When you deal with retailers, most times you deal directly with the business owner. The decision to buy or not to buy is theirs to make and they can make it right there. On top of that, retailers usually offer assistance in marketing products. In our case, they have been instrumental in telling their customers about #ShakeEnkooge along with encouraging them to try it. This move has gotten us sales much faster than any supermarket ever could. This is exactly what you need as a small business owner.
With that said, please don’t imagine that dealing with retailers is going to simply be a walk in the park. To be successful with this strategy, you ought to learn how to handle them for the best possible results. Through my interaction with hundreds of retail shop owners over the years, I have come to understand one crucial factor. The majority value relationships. Your goal should be to move the nature of your relationship beyond a mere transaction. Once they begin to see you as a friend and not merely a delivery man/woman, they’ll open up to doing even more business with you along with sharing vital insights. Today, over 90% of our business is done with retailers and wholesalers. We don’t issue credit but when we do, it is issued to specific key accounts and for just a few days. This way, our business has enough cash to keep it going.