Growth Trends for Related Jobs
Since opening its first two stores in 1979, Home Depot has managed to amass a whopping $88.1 billion net worth. In 2017 alone, the company pulled in $100.9 billion in revenue and made an $8.6 billion profit. What’s equally as surprising is that the household name placed above Lowe's in Forbes’s 2017 list of the world’s most valuable brands. It clocked in at number 33, while Lowe's only ranked at number 78.
Home Depot’s vendors, many of which sell on the Home Depot marketplace, are the hallmark of the brand. The company partners with businesses of all types and sizes in the home, yard, garden, DIY and landscaping space. The company was, after all, founded in the spirit of DIY projects and small businesses.
If you have a great product and want to become one of Home Depot’s suppliers, there are some steps you can take to start selling on the Home Depot marketplace online or in stores.
Becoming a Home Depot vendor is as easy as filling out an application on the company's website.
Start With Market Research
A product will only be successful if the customer actually needs it. This is why you have to do some market research and ask yourself some serious questions before you attempt to become one of Home Depot’s suppliers.
Does your product fill a hole in the market? Why would a customer choose you over another brand? Do you have a reliable means of production? If you can clearly answer these questions, then give yourself the go ahead and make your small business dreams come true.
Build the Demand
Home Depot suppliers have a notable demand for their products. As great as your product may be, if you don’t have the proven sales, then your vendor application probably won’t be accepted.
It’s important to start building your brand before you try to get it into any big-box retailer. Start by building sales via your own e-commerce website. Try to get in with trade shows where you can showcase your product in front of other retailers before you jump into the big leagues.
Nail Down Your Profit Margins
In order to become one of Home Depot’s vendors and actually make money, you need to have a reasonable profit margin that covers the costs of labor, packaging, shipping, marketing, wholesale distribution and commission. Distributors might try to strip your profit margin to absolutely nothing just to benefit their own agenda. They want to be able to sell stuff at the best prices possible, after all. Be careful not to get caught in the fray.
Here’s a good example: If a product costs $1 to produce, you’d typically want to retail it for $4. This means that a wholesale distributor would pay around $2 per item so they can still turn a profit when they retail at $4. A big-box store like Home Depot might hit with a larger wholesale contract, but they’ll likely offer you a lower price. For an item that costs $1 to produce, Home Depot might offer just $1.25.
Fill out the Application for Home Depot Vendors
Every vendor who sells on the Home Depot marketplace has to fill out an application if they don’t have an inside contact with a Home Depot buyer. If you can get an inside contact, it will absolutely help boost your application's standing, but for everyone else, do it the old-fashioned way. You can access the application through Home Depot’s website. The company will contact you within 60 days of submission.
Consider Home Depot’s Diverse Supplier Program
Home Depot has a supplier diversity program that supports vendors who come from diverse backgrounds and/or run a small business. This includes businesses owned by women, minorities, LGBTQ members and/or veterans. To qualify as a small business, you must meet the standards set by the Small Business Administration. You can find more information on Home Depot’s website, but it’s a separate application.
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