A big supplier dumps hundreds of thousands of dollars on a small retailer to win their business across a few shops and lock them in long-term.
The retailer gets the cash, which is their prime focus. There is no consideration as to whether the products they are locked in to taking are best for their situation, no thought about the money they will make over the contract period. The decision was about the ‘free’ cash today.
When a supplier uses their cash to buy real estate in an independent retail store, they are effectively saying, “Our product is not strong enough to hold this shelf on its own against the competition, so we are going to pay to have the competition removed.”
This is lazy marketing. It prioritises the supplier’s desire for guaranteed volume over the retailer’s need for agility. Independent retailers survive by being different, by pivoting quickly to trends, and by offering what the big box stores can’t.
When you lock a small business into a long-term supply contract, you strip them of their agility. You homogenise their offering. You turn a local indie retailer into a static franchise outlet for your brand, often without them realising it until it’s too late.
It hurts the ecosystem. This “checkbook strategy” stifles what keeps local retail alive: innovation. When shelf space is sold to the highest bidder rather than the best product, smaller local makers, who often drive actual trends, are locked out.
The retailer loses access to better-selling, higher-margin products. The customer loses access to variety. The only winner is the big supplier who secured five years of guaranteed revenue without having to actually compete.
Now, to suppliers doing this: If you believe in your product, let it fight for its place on the shelf. Win the retailer’s loyalty through turnover, margin, and service, not by handcuffing them with a contract they signed when you dangled a bag of cash.
Stop buying market share. Start earning it.
To newsagents: that bag of cash does not have the value you may think it has. The best value you can achieve for your business and those who rel;y on it is from products that sell, turning faster than usual and delivering a grown profit % that is best-practice.
Let me guess this is a card company right?