Talking to the head office

So as I said in my business idea. We will let users "buy" items using virtual credits, which they can earn in contests and from other activities. Again, people in the area like the idea, and some people from here think its a good idea as well! I am trying to partner with a retailer that I will buy everything from. Since I am buying all my products from that retail only, there is a lot of profit for them. Do you guys think they would support us? They have more than 70-80 retail stores all across Canada. It would be nice if they put a poster of ours in their store, give us some funding or even just little discounts (little will add up eventually into huge savings).

I am wondering if its a good idea to this. I want to do this to get my initial traffic for my micro-site (coming soon page, that will explain the whole process and have signup). I am sure that if my site says partnered with X (the retailer) it will instantly get tonnes of credibility which would take me really long to get without them.

So, should I contact them? Also, what do you think I should say to them? (I have to write a letter). Do you think it would be a good idea to collect signatures (I am sure this won't make a big difference, but it will show that people are interested). What else can I do to ensure this benefits me.

P.S: If you have advice related to the business idea, you can (should) reply in that question I made (link is given). If you have answer to questions posted here, post here. I want to keep things as organized as possible. Thanks!

Bhargav Patel
Co-Founder
PoiintsVault

I think you might be thinking too small. You need to be really strategic if you want a big retailer to do business with your startup.

For instance, if you say "Give us a discount because we will buy lots of stuff from you" I bet they won't be that interested. But if you say "We can get you in front of X number of Gen Y customers per week and in exchange, we won't charge you for advertising, we just want a free ipad/iPhone/Xbox/whatever per week and some in-store promotion."

The second offer is much more compelling - for both of you.

In the first offer, they have no proof that you will be a big customer and they have lots of customers so why should they care about you. And you are this little company that is begging for a favour.

In the second offer, you are giving them something that is extremely valuable for their business and all they have to do for that is give you some free stuff (which doesn't cost them that much anyway.)

Now this example may not be correct, but what I am trying to demonstrate is that you can work out a deal that is win/win if you do a bit of strategic thinking and try to work out what you can offer to them that is valuable for them.

You can only do this if you are really clear about your outcomes first. You need to be really clear about your business model before you approach a big retailer. You will also need to work out what they want and how you can offer them that through the deal. And you probably need to show them some proof of concept - ie. a proven number of visitors/memorandums of understandings or something like that.

Have fun thinking about how much value you can give - and get!

Go to the closest location and tell the manager what you are doing, how much you want to spend, and how much of a discount they could give you. He may have be able to give you a slight discount, but you can ask to see if they can pass the request up the chain for a larger discount. Take some pictures if they let you or better yet, bring your video camera.

If you get a discount, send a letter of thanks to the corporate office. Tell them how much this has helped your startup and that you want to mention them on your site. Send them a link to a private part of your site with the pictures and videos you took. Ask for permission to display on your site.

Eventually, you can ask for more. The retailer can make your discount contingent on a certain volume. If they want these types of guarantees, you can ask for a bigger discount. You run the risk of paying full-price.

Now you are including the advertising. You're an unproven site, so it is tough to show numbers up front. As you continue to grow, they will get to see the numbers of active users and how much of their merchandise you are giving away as prizes. Make them an offer for additional discounts based on this performance. At some point, they'll be paying you to give away their stuff.

Avoid any exclusive contracts unless they are short-term.

Go build your site!