Selling Your Products at Walmart – a Conversation with Chad Bugos – Episode 8

This is CPG Insiders, the podcast that helps consumer packaged goods companies survive and thrive in business. Now your hosts, Mark Young and Rob Taylor. Welcome everybody to this edition of CPG Insiders. I'm your host, Mark Young. My co host Rob Taylor is out taking care of, I think a sick child right now. So I'm gonna have to wing this one by myself. Folks, we have a great guest today. And our guest today is Chad Bugos. And Chad is with a company called Infinity Worlds and Infinity Worlds, Chad and his people are the go to people for all things Walmart. When I have a client who is interested in Walmart, he is the guy that I, he is the phone number I dial. So Chad, welcome to CPG Insiders.

Mark, thank you so much. I appreciate the time.

I want to jump right in here if I can. I want to ask some questions. So let's start off with the broker relationship. You guys act as a broker for manufacturers, for marketers.

That's right.

And a lot of people think brokers don't bring a value to the relationship, that, you know, all you guys do is you do an introduction and then, you know, then I'm on my own and I've got to do all the work. That's not the case with a good broker.

That's right. That's right, Mark. I think that's the thing that we still continue to see and especially being here, you know, in the land of Walmart, it is about showing your value. And unfortunately we, you know, like probably like many professional groups, you always have a couple of bad apples that seem to, you know, taint the whole group. And in the broker world that's absolutely the same. But you know, you can quickly discern what a good broker is versus one that is there just to collect a check and not do much. And I can go through several things on how that happens, but that's the main. It should be very quickly determined by what that broker provides for you after the sale.

Well, that's kind of my point. When you start with a client, first off, you don't take most clients that come to you. You're kind of selective on who you're going to take.

Yeah, we actually reject about 72% of the opportunities that come across our desk.

And what does, what makes that decision of who's, who's right for you and who's not?

Yeah, so a couple factors for us. One, first and foremost, we have to believe that that item or group of items or that company is right for Walmart and Sam's and for some people, it may not be right for them ever to be in Walmart or Sam's or it might not be the right time in either their history or kind of where they're at in their channel, strategy or just kind of what's happening at Walmart and Sam's club. There are some things that move internally there that, you know, exclude certain categories or preclude certain types of items from, you know, being viable at Walmart.

So what when you're looking at a new client or new product that comes to you, what stands out? What is it that, what is there something that stands out where you say okay, this is good. Is it, is it something that's breakthrough? Is it something that's unique and different? What? Because obviously you're not looking for just more me too items put on the shelf next to 20 exactly identical products.

Right, right. So for us, the other piece of what I kind of neglected to mention earlier is that we're also looking at the people behind that company. Because when you go to do business at Walmart and Sam's, we kind of view it as the big leagues. It is, it's a different way of doing business. Those two retailers really push the workload back onto the supplier. So if you're not, if you don't have the resources or you don't have the sense of urgency that those retailers require, it's really hard for us to make our CL that and we preach that a good bit beyond that if the people are in place. The thing that we look for when it comes to a specific item is it really starts with you have to know that Walmart and Sam's really don't have a lot of in store marketing opportunities that you do at other retailers. You just don't have those levers to pull to drive sales. What I mean by that is at let's say for example Walgreens, Walgreens, cvs, those type of drugstore, they do almost a weekly ad where you can buy your way into those opportunities or you actually are somewhat required to in certain cases to buy your way into certain ads. Walmart doesn't have that luxury. Walmart has 14 tabs a year. Those are almost always, you don't pay for any of those. You're hand selected because of either the volume play, there's some seasonal play to that item. So there just aren't those on store or off shelf marketing opportunities that you get at the retailer.

So you don't buy your way into those.

That's correct. Yeah. There's no slotting fees, there's no ad or required spends. And what a Walmart, the way a Walmart and a Sam's Club buyer both look at those items. Is it ready for prime time? Meaning that it does. Is the consumer aware of it? Because Walmart and Sam's neither one do a very good job of driving consumers to their shelves. They do have 120 some million people a week coming into their stores but you know, getting them to different parts of that big store sometimes it's a challenge and Walmart doesn't know how to drive people there to a certain category so they really push that back on the supplier. To drive consumer to Walmart or Sam's Club shelves, that's our biggest thing.

A lot of young brands that come to us that are just working on their distribution, they look at Walmart as like this evil empire. Oh, we don't want to do business with Walmart because you know, we're not ready for them. They're just really bad to do business with and we're always trying to tell them the opposite because I think Walmart's one of the best retailers to deal with a vendor. Would you agree with that?

I do, I do. You know, I've just had now, you know, being on the outside in the supplier world since 2005 when I left Walmart myself. I've come to see through many of my clients that Walmart and Sam's Club are just a really clean business. You know, there's not a lot of back end surprise charges. You know, you really know when you get your check that's what you would do.

And it's there on time.

That's there on time. They always, they always pay on time, knock on wood. That's a great thing. So especially for young companies who are really managing cash flow, super important now.

Typically for most consumer packaged goods companies, Walmart represents what, maybe 40% of their total business if even if they've got full distribution.

Yeah, that happens quite a bit. It's really, that's the thing that we caution new companies about is that you Walmart doesn't even want to have that much of your business. Their line in the sand has always been 28% or less.

Really? It's twice that low.

It's that low. But look, it doesn't take long if you're a $10 million company, you know, to get a three, you know, two, three, four or $5 million program in, it's a game changer.

So Walmart then really wants you to have distribution everywhere?

Yeah, it's either that or a way. Do you have a good way to drive consumers to their shelf? And I'm preaching to the choir and telling you this, of course, Mark, but this is what you do so well and why we value you've delivered to us is that it is super important to be able to tell consumers that this is available at Walmart or Sam's Club and that value statement for them, what's the price? What is it they're getting there at these retailers? That is something in addition to having distribution everywhere else is super important. It certainly helps. It's not the, not the, it's not that you have to have it because Walmart is taking a look at younger brands sooner than we've ever seen them, especially on the grocery side of the store. Because Walmart realized that to get innovation, you can't just sit there back and wait for the big guys to deliver that.

Yeah. Because Walmart never had a reputation of being first to market kind of retailer. They were always a little further down the chain, right?

That's correct. Yeah. And that's, that's traditionally it's a safety thing because one thing that a Walmart buyer is coached on is that you don't want to be responsible for wrecking a small company's business. And look to hit the hurdle rates at Walmart, you really need to get on shelf and be selling at that hurdle rate, whatever that buyer tells you that that number is. It's usually a units per store per week or a dollars per store per week number. You've got to get there quickly within six months of hitting the shelf. Most people wait until they get on shelf and then start their marketing or advertising campaign. We push just the opposite. Like you need to go from day one, you really need to start hitting that hurdle because that buyer, before that six months is out, they're already starting to look for the next year's modular or planogram review and determine which items kind of are falling to the bottom of their pile, which ones they're going to delete.

Yep. And now you're digging out of a hole because you've got some weeks on your, your scorecard that are poor.

That's correct. That's correct.

So you want to see people running.

So I think the ground running, having a plan.

So I think your advice, if I'm understanding would be if you're going to pitch Walmart, you need to be prepared to have a serious ad campaign.

That's correct. You need to have a serious plan that is probably multipurpose. There's certainly such things as demos in store and that type of stuff. But really, how is the consumer going to know that they can pick this up at Walmart?

Now, a lot of people, a lot of retailers, especially the inexperienced ones and the newer ones, they get the idea, well, if I get on the shelf at Walmart, I'll be fine because I've got this great product and Walmart has so much traffic that as soon as they see my product on the shelf, I'll hit the hurdle numbers just because my product's so good. How often does that ever happen?

It happens unfortunately, too often. And unfortunately for us, we get those calls after that, after the. That happens. Yeah. Can't emphasize enough that because Walmart has nearly 150,000 SKUs in a supercenter, it is very tough for you to stand out. And because there aren't those levers in store that you can pull, you don't get to have fancy shelf tags or anything unique that you can do in store. You have to be able to hit the ground running and sell there because you only have a short amount of time to hit that hurdle rate.

You know, I've used that same number the day of what I think it's 148,000 SKUs in a superstore. As you said, 150,000. And if you look at that and you say, well, if I just get on the shelf, you know, I'll be successful. A consumer can't possibly look at even a fraction of all the SKUs that are in that store.

That's right.

It can't be done. I mean, they would have to move into the store to look at every product in that store. So you have to be driving traffic to that store and to your box of stuff. So walk me through Chad. A presentation. So I've come to you, you've looked at my product, you like it, you decide you're going to represent me into Walmart and Sam's Club. And I'm getting ready for my first, my first pitch meeting. What's that experience going to be like? Obviously I've been through these, but I want you to walk the audience through it.

Sure, sure. So what, so what we're going to do in our case, we would have a great deal of input on that presentation and would like to be as big a part of that presentation as our client would allow us. So sometimes we'll be giving that full presentation, other times the client will. And then we'll be adding in our piece that we provide is that you really need to know something more than just what your product is about. Every client that comes to us has a great knowledge of their product because it's their product. What people tend to neglect is what's going on in that category. How is that buyer's category doing? Do they have access to syndicated data such as IRI or Nielsen or something that gives them at least knowledge of how the buyers look at it? Buyers want to know, what are you going to do to grow my category? Everybody comes to them with their items and tells them that their items are the best or they have the best taste or best color, whatever the case may be. But the buyer has to differentiate and the ones that stand out are the ones that truly take the presentation track of understanding what that buyer's up against. So let's say maybe their category is declining or that they're not hitting a certain segment within their product category and how can they grow that? So start off taking a macro look and making sure that you're checking for understanding what the buyer is listening to and getting feedback from them and then proceeding to show that buyer how you're going to fill that void in that set.

So I'm not just there to pitch my product, I'm there to find out how I can help Walmart help that buyer solve a challenge.

That's right.

And I'm through my product and through my plans.

That's right. And then. Yes. And the most important piece is at the end there. After you essentially identified the void shown your product and why it helps fill that void, the next piece is, well, how is the consumer going to be told that information? Every Walmart buyer knows that someone has to tell them that. Here at my store, that average pitch.

Meeting is what, 20 minutes?

Yeah, you get 25 minutes, generally speaking. So it's going to be buyers doing. And the buyer may do 30 to 60 of those meetings over the course of a couple weeks. It is back to back. So how are you going to stand out? And it's the people who come the most well armed and most informed about what's going on.

One of the mistakes I see is clients will send me their pitchbook for the meeting and I'll see 30 pages, 30 screenshots in there of product and we have this testing and that testing and we work for this. And this laboratory looked at us and they've got one page in there on the marketing plan.

Yeah.

What's that pitchbook look like for you when it's done right? What does it look like?

Yeah, it is, it is really. It is not about the length. And one thing we try to do is we tell our people, look, our, our presentation, be it a PowerPoint or something we're going to do online. That is just a rough guide for us. Our goal is to shut up as much as we can, listen and ask that buyer for feedback and then go down certain routes, wherever that buyer may point us to help sell that product in. And it is, if it is a presentation deck, I can tell you that 12 to 15 pages is about as much as we'd want to go because everything else can be put into an appendix and yanked out if needed. We, we want to be real direct and real succinct and then make sure the buyer understands what our ask is and being very smart about what we're asking that buyer to do. Walmart has 4,700 stores.

Out of those 10 pages or 12 pages, how many pages are about the product versus how many pages are about the go to market strategy and the marketing plan?

Yeah. So really you should be able to have in one or two pages your product. I mean, it doesn't take a buyer, unless it's something truly innovative and completely resting to change consumer behavior. A buyer is going to have a good idea of what that product is, spend more time on why that product fills that void and then how you're going to drive consumers to shelf.

I was in a buyer meeting one day and the rep, and it was not you, you're much more capable rep. The rep was telling the buyer how efficacious the product is and how well the product works and how consumers enjoy the product. And the buyer looked up from her laptop, looked over her glasses and looked at him and said, do you think people come in and tell me that their product doesn't work?

No. It's a great point because we do have, especially when it comes to, you know, over the counter type of products or health and beauty aids, we do have clients who tend to want to show how their product is more efficacious. Quite honestly, it doesn't matter to the buyer. It does, but it doesn't. The buyer really wants to know is why is somebody going to come to my shelf and purchase this? Is it price? Is it efficacious? Well, if it's efficacious, how will they know that? Have you been telling them that in some big campaign? Well, that's fine, but really it's about price, availability and what the benefit is to that consumer and how we're telling that.

Now another thing that a buyer might be looking For So help me out here. Do the buyers have a preference for let's say a premium product that might be able to expand profitability in a category, expand the number of dollars that can be brought out of a sale in that category. So let's say we've got a category with a lot of $5 SKUs and I come in with a $10 SKU. But I have a, but I have a reason for my $10 because I'm a better product and I do things and I've got an ad campaign. Is that attractive? Does the buyer want to step up? Does the buyer, is the buyer looking for lowest price? What's the buyer want to see?

Yeah, that's true. So it is probably different somewhat at Walmart specifically because they always, they tend to stick to, you know, everyday low price. However, I can give you a recent example of something that happened in the pasta sauce category. And this is the category at Walmart that is genuinely in that $3 ish range. And we were coming in with a pasta sauce that was going to be nearly $8. So wow, two and a half, three times. Yeah. And you know, the buyer is of interest. Of course the buyer is going to be concerned that you're asking that much. And what we tried to show was that this, having this premium option made sense because this is what shoppers were looking for on certain occasions to have a much more premium pasta sauce than what is just the normal $3 one that's out there. Also it brought a great margin impact. It had some nice consumer campaigns to drive people to shelf to look for that product. And really what it did is it really brought, brought that whole category or segment up within that category to now where Walmart has several premium pasta sauces. Again, having a reason why you're premium and showing that buyer that you're doing something to bring people to their shelves. Well, that rising tide kind of floats all boats.

So you might bring some research in to validate how consumers are interested in more of a foodie premium pasta sauce or something.

That's correct. Shop some shopper insights. That's something that we would, that's something that we do for, for our clients. That's what we're going to add as a benefit to that presentation.

Now, something else that we do that we always try to tell people and that is never assume that the buyer knows everything about your product or about even the category because we try to explain to people, you might have five SKUs and that's your whole life, but that buyer could have what 300, 400 SKUs.

That's right.

So that buyer can't give the focus to your two SKUs that you would like them to do. So we need to make their job easy. When you go in and see a buyer, do you ever go in and say here's my eight dollar pasta sauce. I know that you're at $3, but by the way, here's three pasta sauces that are on your shelf right now that are just dogs that are doing nothing for you that my product could fit back into.

Yeah, I don't, I don't generally go, I never label a competitor but we call it ghosting or ghost descripting or ghost negative selling.

Okay.

That way, and the way you do that is essentially you come in, you show, let's say a chart of all these pasta sauces and maybe you put, you know, as many as you can of the Walmart ones up there and then you start showing the benefits and of yours versus theirs. So you're there, you're kind of ghost selling against those other brands without kind of calling them out directly. Most buyers don't want to hear that you have an idea of what, what needs to go and what, what needs to be added. Okay. They, I, I always kind of do it in, in a much, kind of more roundabout way, a little more subtle. Yeah, yeah, Yep.

All right, so, so let's say that we did the pitch, Walmart said yes to our brand and we get our first purchase order. What's the top three or four things we need to do? What are the pitfalls that we need to look out for?

Yeah. So once you're already past the setup and everything and you've got all the terms and all that stuff ready to roll, really the next piece is that Walmart really does not warehouse many products, especially new products, they're going to cross dock them, which means it goes from your, your factory or your manufacturer to a Walmart. DC it doesn't have a home in the distribution center. It actually just goes out another door the same day on a Walmart truck to a store. So there is no inventory being kept at a Walmart distribution center.

So it's a very simple kind of thing.

Very much so. You're also going to get weekly orders for all. You know, if you're in a thousand stores, even more than likely you're going to be shipping to 42 different distribution points which are in the Walmart distribution center. So making sure that you have, if you're not using a good broker that you do have taken the time to understand the transportation logistics piece. Because not making your ship dates, not hitting in a timely manner not only causes you issues with your sales, but you don't have product, therefore you're not hitting the sale, sort of possibly get deleted. But Walmart also will find you if you have a certain, over certain percentage of your purchase orders not done in a timely manner.

That's what I was about to say. Walmart forces you to run a good business.

That's right. That's right. You're going to, you're going to hit the ground running and do things the way which I, you know, I think it's a, probably the best way for all involved but it is a little bit of a change from some other retailers. So Mark, the one thing that is also very important is Walmart gives you access to their database for sales inventory by store. Up to the minute, really inventory and sales information. So the most important piece that you're monitoring how your items are doing and you're keeping track of whether or not you're hitting that sales hurdle.

And unlike other retailers, Walmart doesn't charge for Retail Link, do they?

They do not charge for Retail Link. Right. Which is amazing. It's an incredible database. It's incredible database. It has so much information, most people don't really use it. They use it for a lot of ad hoc or you know, reporting kind of after the fact. It is also a very rich database. So let's say for example, if you're a supplier and you've got an item in 500 stores and you're going for your next buyer meeting and you're hoping to be in more stores, maybe 4,000. The one thing that you can do in Walmart system is you can mine through that data and find out why certain stores are selling so much better than others. Maybe in this case of the premium pasta sauce you're looking at and going, wow, these 500 stores, there are 200 of these stores are actually a medium income, a demographic indicator type of store. We could expand into these type of stores. Our certain ethnicities might prefer a certain type of pasta sauce or condiment. You can utilize that database to create your own selling stores in the future as well.

So there's another feature that I really like about Retail Link and that is I like the feature of being able to look at the 10 products in category, the 10 products outside of the category and some of the data as far as how people pay for the product, some of the data on frequency, I think that is just incredibly valuable information. If you pull it and you, you really study it, I mean you can't read too much into it because some stuff is, you know, like everybody's going to see bananas or something on the list. Right, but tell us the kind of insights that you pull out of that kind of data.

Yeah, so there's some great features called the markup basket and that essentially tells you this type of item sells with my item. Now of course, you know, bananas are in it. As you said, bananas are in every basket. That doesn't really count. But maybe people are purchasing two of these. So is there a need for this item to be in a twin pack or to do something as a multi pack in the future? There are just certain pieces of that information that you can use to further enhance, maybe even your product development. Most people don't know those options exist. Retailing and that's, and it's not a, there's not a tutorial out there that's very user friendly. So having someone who either knows that or a good broker and understanding how to use that and glean information from it so, so important to, you know, your future in Walmart.

You know, one of the things that I find interesting in there, first off, when you look at the shopping basket, you and I work together on an itch product, an anti itch product. And what I found fascinating was when I looked at market basket on this anti itch product, we found that the top products in the shopping basket were two other anti itch products.

Right.

So it kind of indicated to us, okay, people that are buying in this category that are buying anti itch, they're coming in the store in pain, they've got a need and that need is so great, they're grabbing several items off the shelf.

Right. Trying any shotgun approach.

I also found, and I don't know if this has been helpful for you, but I've also found looking how they paid for the product can be insightful.

Oh yeah, cash or debit or credit type of thing.

Right. Did they use an AMEX card? Because that's a different person that has an AMEX card versus a debit card. Were they using EBT when they bought it?

That's correct.

So I think there's a lot of insights that you can pull out of, out of looking at that. What else do people need to really be prepared for when they, when they take on doing business with Walmart?

The other thing that I think that is super important, you need to understand what your channel, strategy is and you know, whether or not you're Selling to Walmart the exact same item you're selling to Whole Foods, is that the right thing to do? Is Whole Foods 20% of your business? And if you sell the exact same item to Walmart and Walmart comes in, you know, 30% cheaper than the Whole Foods item, you're going to irritate some Whole Foods buyers. The best suppliers have a plan in place and I've already thought those through the different channels, specialty to club channel to online. Because Walmart buyers do look at Amazon and certainly, you know, wonder and worry about that cost that is on Amazon. So making sure you're understanding which what your product is you're taking in, is it a different size, is it a completely different package, possibly a different brand of your item? So making sure that's well thought out. And a good broker should be able to be real honest and straightforward with you about where you're headed to when it comes to Walmart.

That's about to say, if you're my broker, you're going to give me guidance and say maybe we need a different configuration for Walmart, maybe it's a different size. You're going to guide me on that. And even though you may not be representing me at Whole Foods or Amazon as a good broker, you're going to look at my whole business and look at what else I'm doing so that you can guide me in the best direction for Walmart, right?

That's correct. It's super important that we've had many times where we've approached especially small, small companies or those with hot brands and they tell us, look, our plan is not we're not going to sell to Walmart. That comes all the time.

It's crazy.

Five years down the road you might decide differently or your investors in your company, if you have some, might decide that for you. So in my mind, beginning with that end in mind is the most important thing you can do. Whether or not you end up selling to Walmart or Sam's, a different story. But beginning with that end in mind of this is where I could end up. Am I charting the right path there?

Now what about Walmart.com and Walmart also has jet, right?

That's correct.

So what's going on over in those businesses? Cause those are different businesses than Walmart and Sam's Club brick and mortar, Right?

Right, they are. They're run separately. Walmart E Comm is absolutely fast growing. It is still not as easily done. So it is some work behind the scenes, but it is incredibly important. And for Walmart Specifically, it's become incredibly important lately because Walmart has added online grocery pickup, where you can essentially order your groceries, go pick them up at your local store, just pull up and they run them out to you. In addition, Walmart has started testing in many markets grocery delivery to your home. And so making sure that your content, not only your basic content and your photos and all that information you need to sell an item online is correct, but also having some enhanced content, helping yourself. Because Walmart shoppers, although not purchasing the majority of their basket online, they're using online walmart.com and jet.com to make decisions before they go to store store. So you've got to have great information out there long before a person gets a shelf to buy it.

Now, is it easier for me to get on Walmart.com than to get in the store?

It technically is easier for you to get online through Walmart.com or Jet.com or get set up. We will see that quite often the big disconnect is that there is not a real easy metric for a buyer who buys for brick and mortar to be able to extrapolate that and go, okay, you're doing this many dollars on Walmart.com, yes, I need you in my stores. There's just not that translation yet. Because roughly, the where it stands, a good item on Walmart.com let's say on a weekly basis, if it sells $1,000, that's roughly what a normal store would sell. So one brick and mortar store, so walmart.com versus a brick and mortar store, roughly the same weekly sales, that's kind of where you're at. So it's a little bit harder for a buyer to make that leap and make that transition to putting that item in the store.

Right. So.com is really a microcosm of Walmart in comparison.

It is.

How does Walmart view, if you can answer this, how does Walmart view Amazon? Because it seems that Amazon is part of probably Walmart's biggest target or focus as a competitor. Is that a fair assessment?

I think it's a fair assessment. I think that certainly Walmart understands that within the next five years it looks as though Ambo could become bigger than Walmart Stores Inc. At least the Walmart side of the business. And certainly that's concerning. I think it's also Walmart. It has pushed Walmart to do some things. And you've seen, you know, the CEO of Walmart, Doug McMillan, he's placed some very heavy bets. And you see when they're almost all of their capital expenditures are being directed towards doing reformatting stores to have online grocery pickup or grocery delivery capabilities that when you see they're only, I think they're adding less than 40 new stores next year, all that money is going to build, reconfigure these current stores. That tells you right there that Walmart understands that their brick and mortar stores have value, but they need to be that that's where they're going to need to be to compete with Amazon, that there are still things you're just not going to be able to do. Well, hence part of the reason Amazon bought Whole Foods. Right. They also know that the brick and mortar is incredibly important.

Is Walmart, are they moving into the autonomous delivery yet? Into the, the robotic delivery? I know they've had some tests with it.

Yeah, I only have seen or heard of tests. I've not seen that rollout even anything locally here. I haven't seen that happen.

I see Amazon's using basically the same vehicle now that Walmart was testing. The little six. Yeah, that rolls down.

Yes, yes.

Let's say someone is in Walmart, they have a product in Walmart and you call them up and you say, I talked to the buyer today and if things don't change, you're going to get delisted. What's that retailer need to do? What do you tell them to do?

Yeah, so really one is if I'm not currently representing them, of course I'm going to say, hey, what's going on with your data? And do you have somebody going through that and coming through it and looking to see for pearls of success or pieces of success and are you in the right stores? Buyers don't have the time to always go through and make sure that you're in the right locations. And that's something that a good broker, a good salesperson needs to be able to do at Walmart. And Sam's is to make a recommendation to that buyer on the type either be, let's say it's an ethnic product to make sure it's correctly located in those stores, or maybe it's a higher premium product and this should really only go into 7, 800, you know, high income designated Walmart stores.

So I might have a product that's in 4200 stores which looks like I'm failing and you might go back through it and say we're really a success in 1800 stores.

It happens all the time.

So let's go back to the buyer and reconfigure this business as an 1800 store business so that we don't lose the account.

Yeah, rarely is really isn't a good thing to be in all 4,700 Walmart stores. It is just because you're playing against, you're playing against the average. And you know, when a buyer looks at it they're looking at not your total sales, they're looking at a units per store per week or a dollars sales dollars per store per week by item and then ranking those items.

So stores that are poor for you can drag your mean down then average down.

Absolutely. So being very targeted in your approach, an 1800 store, you know, item that's turning 20 bucks per store per week is so much better than you know, an item that may be in 4700 stores but only turning 6 bucks per store.

And this is something that a good broker is going to do for you?

Yes, there should be. Because if you're a good broker and you're, you're vision is long term and it should be because one, you really have to make sure you're doing the right thing for your client and making sure their business is healthy so they can continue to pay you. But also for the retailer. You know, we want to be very targeted in our approach because that the good brokers are the ones who get their phone calls returned from buyers and get meeting requests answered because the buyer knows that they're going to come into them with the right due diligence and front the work on the front side done.

Now what would be different about working with Sam's Club versus Walmart? Because those are really different environments, right?

They certainly are. There certainly are. And you know on the club environment there is, there are just fewer SKUs. So you know, for a pharmacy buyer they may have, let's see the bottom buyer at Walmart they have a couple probably a little over nearly 3000 SKUs amongst their all their different planograms that they have that same buyer at Sam's Club the whole department may only have has less than 300. So you're talking about one category in Walmart has 10 times the number of SKUs that all the pharmacy department at Sam's Club. So limited SKU environment, very, very valuable space and what value perception is that club member getting? And so Walmart where Walmart makes money on the sale of the product, Sam's Club makes money by selling memberships and the product profitability is not quite as big of a deal. So what can they do to provide great value on items that are hot or something that is highly consumable.

And the turn rate at a club store is going to be considerably higher than the acceptable turn rate in a Walmart store.

Right, Absolutely. Whereas, you know, let's say you have a, you know, maybe you have a $20 per store per week item hurdle on a, on a grocery item, but at Walmart, that item probably would need to do, you know, $500 per store, Sam's Club per week in order to be a buyable.

Yeah, it's really, it's huge, isn't it? The Gap.

Yes. Yep. It's a big bet for that, that Sam's Club buyer. They've given it. They're dedicating a lot of space and really betting on one, sometimes two suppliers for a product. Yeah.

And it makes sense because, I mean, they might give, you know, be giving up 3 inches of shelf space of facings for my product, but if I'm in a Sam's Club, it could be a pallet. I mean, it is a much. It's taking up a lot more real estate inside that Sam's Club store.

That's right.

So, Chad, what. What else? The last thing I'm going to ask is where do you think the trend is over the next five years? When we look at Amazon, we look at brick and mortar and we look at the retail accounts that you deal with, you know, the retailers or manufacturers that you and I deal with. What will this retail landscape, in your opinion, look like in the next five years?

Yeah, so I think the companies that will do it best will be those who have figured out how to do e commerce as well as brick and mortar and be able to tell the buyer those success stories and what levers they're pulling on their side, mainly through their e commerce platforms or their marketing campaigns to drive people to shelf at brick and mortar and then also giving that brick and mortar buyer some reference point for what's going on in E commerce and help them give them some amount of predictability of an item's success once it does hit the shelves, once it's been online.

If I expand on that for a second, then since so many brands launch on Amazon before they get to brick and mortar, what would be your advice for those companies for controlling their Amazon brand and controlling their pricing? Because if they go super discounting on Amazon, that's going to hurt them when they get into retail.

That's right. That's right. So we have a couple clients who manage them very successfully and they've been very smart about the products that they've listed on Amazon first. And so for example, they may have a different pack size, a twin pack of an item or they might have a larger value size that's only sold in that channel on Amazon or another e commerce sites and then making sure that when they do come to Walmart or Sam's Club that that size and value perception is there for the Walmart or Sam's Club member.

Well, Chad, I really appreciate your time today. You are absolutely the guy that people need to contact when they want to do business with Walmart. And Chad's company is called Infinity Worlds. If you go to the shop notes for cpg insiders.com you can go there and at the show notes you're going to find links to Chad's website, Chad's information, telephone number. He is the guy to contact. Chad, any last comments that you want, Any last thoughts that hit you that you want to share with people about doing business with Walmart and Sam's Club?

No, I think the thing that I'd like to leave everybody with is if you have any questions, look, long before you hop into a contract with me, I want to make sure that it's right for you as well. So you know, again, any good broker should be able to give you some great advice and spend some time with you long before you're locked into a deal. And I'm more than happy to do that. Even if you feel like Walmart or Sam's Club may be something in your future, maybe you're not ready for that right now, but to help you kind of plan for that, I'd be happy to have those conversations with anyone.

That's great, Chad. Chad, I really appreciate it folks. That's it for this edition of CPG Insiders. If you enjoyed the show, go to wherever you get the show, itunes, Iheart Stitcher, leave us a five star review and post the show. Email the show to other people in the industry because this is great information. Chad, I really appreciate you being here today buddy, and hope you'll come back in the future.

Absolutely would do it anytime. Mark. Thank you so much.

Thank you. If you're looking to greatly increase sales on your CPG product, don't hesitate to contact us at Jekyll and Hyde Advertising and Marketing. By the way, the only advertising agency with a guaranteed result. Just go to jekyllhideagency.com or feel free to give us a call at 800542. It.