Convenience Stores Sales MBA

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Jorge Olson

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June 6, 2022

Convenience store sales are one of my favorite topics. It is one of the most challenging channels to sell your products because there are many independent stores. And this is why I like it because you can keep competition out.

You can try selling new, innovative products in convenience stores. I will talk here about two different models, whether you’re coming from a Fortune 500 store or a large brand, and by a large brand, I mean selling $100 million per year.

If you are a small brand, selling less than $100 million per year, or a startup company, you probably have an advantage in mass retail, but not in convenience stores.

“Now you have to deal with thousands of buyers.”

If you’re a small company or just developing a brand, and you want to sell in convenience stores, you have to fully understand what it means, what it takes to sell to these stores, why you want to sell to the stores, or maybe why you don’t want to sell to convenience stores.

It depends on the category you are in. We’re talking now about fast-moving consumer goods as the category. So, you might have anything from beverages to nutraceuticals, vitamin snacks, cigarettes or new Hemp CBD products, candy, food, sunglasses, clothing, or other items.

Convenience Stores Sales Myths

Let me start with some of the myths. It is a myth to think that you can contact a chain store, sell to all the stores in that chain, and be successful with just one buyer for the entire chain. This doesn’t apply as it applies in mass retail and supermarkets here. Most of the chain stores are franchises. That means one owner per store or one owner with five or ten stores. These can be gas stations, convenience stores such as 7-Eleven, Circle K, AM/PM, etc. There are examples of chains that have more stores, delivery trucks, and sales reps, but you can’t sell to all of them simultaneously. One of the mistakes I see is new brands going to one of these large franchises, paying a lot of money to the franchisee association, thinking they will get them listed in every store. Later they are disappointed to find out they can sell directly to every store without going through the association.

“You don’t need permission to sell to every store individually.”

You can get listed in a chain and then sell to every store individually without them. So, make sure you know how that franchise city and store work, whether it is 7-Eleven or some other chain. Do your homework first, learn how you can list your product in the store, and then sell individually at the end of the day. You’re dealing with many independent buyers, and you have to make them happy.

The best way of selling to convenience stores is through DSD – Direct Store Delivery.

I’m not only referring to the big convenience stores. I am also talking about liquor stores, small convenience stores, car washes, gyms, and other stores that maybe you’re not considering for direct store delivery. Using distributors is the best, either with your trucks or getting distributors, jobbers, or other types to sell to them.

Yes, huge grocers and wholesalers like Core-Mark sell to many stores. However, if you go and sell to them, you will be listed, and if a store orders your product, they will deliver it. If they don’t order your product, they will not actually go and offer your product in the store. When dealing with distributors, wholesalers, or even convenience stores, don’t expect the distributor to do your job for you. They will not go and sell the account, merchandise it, collect the money and give it to you unless you are spending millions of dollars in advertising. That’s probably not going to be your case.

“If you already have a brand, it will be very easy to sell to these stores.”

The jobbers will buy your product from Costco and deliver it to the stores. Perhaps you will get your product to cash and carries all over the country, and the jobbers and distributors will buy the product from these cash and carries and deliver it to the stores. The cash and carries can buy truckloads from you, not just pallets, no matter how big or expensive the truckload is. These cash and carries or wholesalers can buy the product, store it, and then sell it by the case. They sell it by the pallet to joggers. They sell it to convenience and liquor stores that pick it up from their cash and carry location. If you are a national brand, already established, and want to get into convenience stores, this is the best way to do it.

Get a smaller package that can be sold in convenience stores. Once you have this package, either for the shelf refrigerator or for the checkout, create the appropriate material: sales sheets, posters, brochures. Get your product with wholesalers, make relationships with wholesalers, and start advertising it so to drive traffic to these convenience stores, and then the jobbers will do the work for you.

You don’t need to advertise to the jobbers

You can send somebody to the cash and carry, a promotional team, and they will make sure that they educate the jobbers, the distributors, and the retailers. If you are not a national brand and you’re starting from scratch, you probably want to test your product in some stores.

You probably need to partner with the local distributor, not forever, but at least in the beginning to understand the distribution and know what’s happening in the store. If you have a good partner or a good local distributor, you can also go and drive with them or send your salesperson to drive around and put the product inside the stores. Maybe you can send a promotional team to the store to sell your product.

And then after that, you can start making decisions about how well your product sells and how many items you sell per day, per week. You then plan how much advertising and promotion you can spend, and how much merchandizing you can spend, and then you can replicate that with other distributors in other towns.

Different products may require specialty distributors.

Beverages are a unique product that requires beverage distributors. Anyone can deliver beverages, but most distributors are not set up for this, so you need to work with beverage distributors. The best beverage distributors are Miller, Coors, and Budweiser distributors.

You have to go region by region to sell to them. Again, if you have a lot of money, start with them. If you don’t have a lot of money, meaning less than $1 million, start with your local distributor, no matter what type of distributor it is. Go with them and start listing your product in the accounts.

“Don’t try to go after the big accounts.”

If you don’t have at least one million dollars in the bank, it will break you. I know you’re in love with your product, and you think it will sell on its own. Don’t take the chance because 99% of the products go out when they do this.

So even if you think you will stay in, why not just do the best thing that you can for that product and make sure it stays in. Because you have a proper business model selling to convenience stores out of the USA.

Closing

I love convenience stores. I started in the convenience store industry years ago. I had a small direct store delivery company in San Diego, California. I expanded it and I grew it out of proportion to 17,000 accounts with direct store delivery. I’ve sold hundreds of products. I’ve developed over 1000 products of my own. So, you can imagine how many products I’ve sold. But I also work with companies like yours, small companies and fortune companies alike helping them develop new products, helping them bring those products to market.

If you would like me to help you with your brand, contact me. If you want me to see your product, send me some samples, and I’ll be happy to give you some feedback. If you want me to train employees in your company, or give a talk, contact me to discuss. I hope you enjoy the course and I hope you get into 200,000 convenience stores with all of your products.

Jorge Olson