There are many industry terms people ask about. This year we are taking a different term each week to define and share some applications.

Free Fill is one case per product, per SKU, provided to each store to get access to the shelf. This is a practice used more often in specialty stores than the larger retailers. The larger retailers prefer to focus on listing fees.

The value of Free Fill

There is a cost to free fill but there are benefits as well. The biggest benefit is you know your product has a space on the shelf. When the specialty store or other retailer negotiates free fill with you the next step is to confirm where you go on the shelf and that this will be ‘your’ space going forward. That is the return you get for the investment of the free product.

When you or your distributor negotiates this deal, it is important to confirm with the retailer that this is your space. You have paid for it but it is always good to confirm what you are getting and for how long. Retailers should give you at least a year to prove your product can perform.

When you negotiate the space and free fill it is time to get an understanding from the store what their expectations are. The number you really need to know is their expectation for sales. How many units per store per week do they expect? Once you know this number you will need to build a plan to meet or exceed it.

This is your entry point but should not be the maximum you get. Once your product is in the store and on the shelf the hard work begins. Your space, that you negotiated with the free fill, is just the beginning. Your product is now listed in the store, you have to start working to expand your presence in the store. Perhaps you compliment items in the deli or sell well before a long weekend. Try to get a second display or get them to take a merchandising rack with your products. Some people might try sampling or demos to drive trial in a new location. There are many tactics you might try, it is key to figure out what works in this environment. Every store and every category are different.

Your view of free fill can impact the results you achieve

Think of the cost of your product as an investment. If you are like me when you make an investment you expect a return. The better the return, the better you feel about the investment.

I appreciate suppliers see free fill or listing fees as a ‘money grab’. It is hard to argue that retailers take the profit they make from free fill products and use it to help their bottom line. It is also a reality. Suppliers are willing to pay and it is likely you will too. You can choose how you want to think about it in your business. If you try to think of it as an investment, you need to figure out how to get a return. It is not the retailer’s job to provide the return, that is your challenge.

Suppliers have to do a lot more than just donate the product

Now that you have put the free product into the store you need to get the benefits. The most important task is to keep the shelf full. If you are delivering direct or work with a distributor you have to keep the shelf full. This is your space and your results will have a direct correlation with the shelf conditions.

Use the sales estimate you have and the shelf holding power to determine the frequency of visits to replenish inventory. In the early days visit more frequently to ensure you exceed expectations.

Report back to the store when you start to get a sense for volume. Stores usually focus on the problems so if you are meeting or exceeding expectations it is worth the conversation.

When you pay for free fill, your sales results can be a foundation for getting more space in other stores. When you prove your product will sell you will be in demand. This is an opportunity to negotiate. Free fill and listing fees are negotiable. If you prove your brand delivers you might get a line extension on the shelf without free fill if you have proven you deserve the space.

Many distributors will agree to free fill. It is not their money so they do not push back too hard on retailers. Make sure you know what your distributor is negotiating on your behalf and that they are as hungry as you are to get the return on the investment.

In many specialty stores and smaller retailers free fill is a reality to get on the shelf. Build it into your sales and marketing costs and focus on getting a return on your investment.

If you have any questions about free fill or getting on the shelf, you can always send me an email peter@skufood.com or call me at (902) 489-2900.

Peter

Whole Foods 2023 trends

Hard to believe we are looking at trends for 2023…

Whole Foods do a great job looking at what sells in their stores to predict what they see as being popular in the future. Think of the data they would have with their stores and perhaps they look into what sells on Amazon as well.

If you position your products for premium consumers or the health and wellness category these trends are important to watch. We all have to keep learning about consumers.

Where is Peter Speaking?

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