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You should weigh up the advantages of disadvantages before deciding to supply your food or drink products for a supermarket or retailer to sell. This will help you decide if it is right for your product and business plan.

Advantages of supplying to supermarkets

The benefits of selling through supermarkets include:

• It is easier to deal with one large customer rather than a number of smaller independent customers.
• You can increase sales with access to a larger customer base.
• You can increase brand awareness of your product with possible nationwide coverage.
• It may be easier to access financial assistance as banks may be more willing to lend to your business if you have a supplier contract with a well-known supermarket.
• Supermarkets have a lot of experience in selling different products and may be able to offer you advice and guidance that will help increase your sales, eg through product design and packaging design. 
• Some supermarkets or retailers run business improvement schemes that can help their suppliers improve process efficiency and grow their operations.

Disadvantages of supplying to supermarkets

Some of the downsides of selling through supermarkets are:

• The price you get for your product will be much less than if you sell directly to customers.
• You could become vulnerable to a drop in demand, price decreases or a squeeze on profit margins from the supermarket.
• You will be under pressure to keep up with demand if your product sells well. You may have to invest in new equipment or expand premises to manufacture more of your products.
• Your product may only be given a trial period on the supermarket shelf.
• Some supermarkets or retailers may insist on being the exclusive seller of your product or may insist on your selling elsewhere at a higher price.
• Some supermarkets or retailers may audit their supplier to ensure certain criteria are met or insist on a business achieving certain food safety accreditations before being considered as a supplier

If you think supplying to supermarkets is a good option for you, see if you are ready to sell your product to a supermarket and find out how to pitch your product.