Advantages and disadvantages of Listing Products at Supermarkets

  • Advantages of Listing Products at Supermarkets
    1. Increase the Image of the Brand and its Reputation

      If a product can be uploaded to the shelf of the Hong Kong supermarkets, its quality and package must have already met the international standard. Therefore, it shows an excellence image. 

    2. Simple Operation and Management

      Supermarket has a central logistics, consistency in inventory management, and cashier management. One or two staffs are well enough to fulfill the tasks even listing on hundreds of shops, so the operation costs are low.

    3. Sales Accounts are Clear, Giving Investors Confidence

      Supermarkets usually use central cash management with video and theft controls. They will provide you the sales report of each item every month. You are no need to worry illegal manipulations of the figures in the accounts, and you can feel ease with your investment.

    4. Heavy and Concentrated Consumer Traffics

      Supermarkets always hold a cluster of consumers. You are no need to worry about how to attract consumers buying your products, it save your promotion costs.

    5. Distribution Outlets are Abundant, Advertisements are Cost Effective

      Most major brands prefer to put up their whole line of products on the shelves of supermarket, and then focus on advertisement to build a brand. For example, in Hong Kong, if you put in TV ad at $100,000 per month and last for six months, your brand and products will be well known in Hong Kong. As a result, if you put your products over 1,000 supermarkets outlets, your average cost per shop will be only $100 per month only. This is the most cost-effectiveness.

    6. Low Cost to Start, Low Investment Risk

      To run a business in Hong Kong, the most significant cost is rent and salary. Supermarket product shelves upload do not need to pay heavy rents and employ much employees. Each year, the fixed cost on shelf upload is not high and inventory cost is low. The rest of the expenses are variable costs.

  • Disadvantages of Listing Products at Supermarkets
    1. The due terms of payment are long:

      At Hong Kong, most supermarkets require payable terms of 60 to 90 days. If you have more products, then, the sum could be large. To solve this problem, FIBD can help because it has good relationship with banks.)

    2. The Procedures of Product Listing are Complex

      Hong Kong supermarket groups are huge. They are serious in their operations and very care about the product listing process. In addition they pay high attention to the product image and quality. If you want to gain entrance to the Hong Kong supermarkets, usually it takes half year to one year. Besides, you have to know well the Hong Kong Laws, and the operations of the supermarket. Moreover, you need to build a long term good relations with the supermarkets so that you can put your products to their shelves easily.

Supermarket full set of services: (Hong Kong local customers)

The Preliminary Stage:

  1. Performing a basic market analysis of the product for the clients.
  2. Providing information about similar product/business in Hong Kong market; analyzing the pros and cons of the shelf upload, and giving professional advice.
  3. Developing market plan and product listing financial plan
  4. Drafting a simple co-operation agreement.

Implementation:

  1. Representing the clients to negotiate the terms of product listing. Fighting for the best profit margin for the client
  2. Helping clients to modify packaging and labels, so as to fit into the Hong Kong Laws and the requirements required by the supermarkets.
  3. Helping clients to apply for relevant certificates.
  4. Providing sample, client background and manufacturer certificates to the supermarket
  5. Providing bank/private investment financial service and helping the client to find investors as well as opening LC.
  6. Helping client to open an account at the supermarkets

Post Implementation Services

  1. Following up the shelf upload locations, promotion methods and activities.
  2. Following up supermarket account record and bank transfer procedures,
  3. Helping client to extend their business development and extending the market share.

Service Fee:

A. Start Fee

Normally the product listing takes 3 to 6 months for preparation. In extreme case, it may take 12 months or more. After uploading on the shelf, the first 3 to 6 months required close contact with the supermarket. Therefore FIBD requires to take HK$ 10,000 to $50,000 as a start fee.
(In case, FIBD cannot upload client’s products on the supermarket, FIBD will pay client back 50% of the start fee, and only keep 50% for as the starting fee as the and consultation charge.)。

B. Following up Service Fee

When client’s products are successfully listed on the shelf, and client received product sales payment from the supermarket, client need to pay FIBD 1% to 3% of it for the implementation and following up fee.

C.Promotion fee

If clients need FIBD to manage product packaging, propaganda materials, promotion activities, advertisements and ad writing, we can provide clients a thorough service. (Promotion fee is discussed by two parties and charged case by case.)

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