From franchising point of view, partnering with Tupperware means a low investment and high margin business opportunity.
Indian women know a lot about the kitchen and this is how they are much aware of the products and utilities in the kitchen. That is the reason for a global leading homeware product brand to build itself to nurture confidence in women by providing storage and serving solutions that ease their work.
Tupperware is a global leader in intuitive, premium homeware products across multiple categories. It is present in more than 100 countries. It was founded in the year 1946 in Orlando and came to India in 1996. It provides design-centric food preparation, storage, and serving solutions for the kitchen and home.
The products from Tupperware include cooking range, kitchen essentials, and fridge and freezer boxes, microwaveable and on-the-go products.
For a long, Tupperware was sold through only one medium of direct selling. In the year 2019, it started its physical stores in India. There is a good reason why the brand had to add on to physical stores. Direct selling would not allow the consumer to touch and feel the product. While in the case of water bottles or lunch boxes, the product could be carried along by the distributor, the higher range of kitchen essentials could not be demonstrated and shown. This is where the need aroused to set up physical stores where the consumer could try out the products and see all 200 SKUs at one time and place.
Although there are a lot of inexpensive homeware solutions, Tupperware still has a mark on the consumer and differentiates itself from the others. Tupperware is a 60-year-old global brand. Because of such a long existence, it is an established and trustworthy brand. It holds rigorous global quality standards.
Tupperware offers a wide range of innovative products with versatility. Its products are tested in qualified laboratories. The accelerated usage testing is also done for the products. They are made from virgin plastic.
From a franchising point of view, partnering with Tupperware means a low investment and high margin business opportunity. The breakeven is very quick. It reserves partnership to women entrepreneurs since it is much associated with women and the company believes that a woman can understand the brand and its products well.
Tupperware works on FOFO model. But, it has innovation in its MLM model. The franchisee is paid a commission for the franchisees under him.
Investment- The investment required for Tupperware franchising is about Rs 15-20 lakhs. This includes Rs 5-6 lakhs for the initial stock, the average rent of one lakh, and a one-time franchise fee of Rs 1 lakh. The interior costs come up to Rs Rs 2500 per sq ft which comes around Rs 8-10 lakhs. Rs 2 lakhs from this amount would be required for equipment and machinery like microwave, refrigerator, laptop, printer, CCTV, AC, and music system. Tupperware gives the franchisee a free demo and displays stock worth Rs 5 lakh for opening.
Location- For the brand, the neighborhood outlets perform well since they fit with the product profile. The area required for a store would be around 400 to 600 sq ft. The brand prefers a store on the façade side 10 feet and above. It has to be on the ground floor and a high street. In a mall, it has to be according to the mall zone. The store without beam is clearly preferred. The brand will help in finding the right location in case you don’t have one.
Margin- The base margin that a partner gets is 37%. A goal-based incentive of 3% is added to it. An audit-based incentive is also added. If a partner meets the monthly target given by the company, he gets additional incentives. This monthly target incentive is given to the partner for the first six months irrespective of whether the targets are met or not. These incentives together give a margin of about 42% to the partner. There is no change in the margin during any discount season or promotions. The target for the incentive is calculated based on sales anticipation at opening, 3 months performance of the store, and kind of sales in similar stores in India.
Staff and Training- One male and one female staff are required to be at the store. The 3-day training is given to the staff by the company after which regular refresher training is given. They will be given a uniform and trained in daily outlet operations. There are sales and activity-based rewards for the staff to increase their potential.
Inventory- The franchisee maintains a safety stock of Rs 4-5 lakhs of the purchase price. The products are added when new products are introduced and whatever is sold is replenished. A weekly replenishment is given to the franchisee. The stock to turnover ratio is 6 times since the SKU is just 200.
Brand Support- The brand supports the partner at each step. They have dedicated teams to help the partners with site selection, legal team agreements, business development, store layout, and design, and hiring and training. The brand has tied up with certified vendors and designers for the store layout. They also help with the inventory mix. Each franchise is provided with licensed ETP software that helps with inventory management. The company also does all marketing for the partners. On launch, the brand gives a newspaper ad and performs other launch activities. Each outlet has its own Facebook page.
A very interesting part of franchising with Tupperware is the MLM structure. The franchisee once settled can go ahead with multiple outlets under him. After 3 outlets, the franchisee becomes a challenger distributor. The franchisee gets a commission on the outlets he has under him. For up to 2 outlets, a commission of 4% on sales is given. For 3 outlets, it is 5 %, 4 it is 6% and for more than 5 the commission is 7%.
Tupperware sees that there could be a conflict between its traditional distribution channel of direct selling and the physical stores. To eradicate such conflict, the brand has already started with the exclusivity of products in each channel. It plans to introduce more such products in the future with increased promotional advantage to the physical stores.
Edited By: Vaishnavi Gupta