Which of the following is a challenge for small start-ups when working with larger retailers?

The correct answer highlights a significant challenge that small start-ups often encounter when engaging with larger retailers. Small start-ups usually have limited resources and less established reputations compared to their larger counterparts. This discrepancy often leads to a lack of negotiating power, meaning that larger retailers can dictate terms that may not be favorable to the smaller companies.

For instance, when a small start-up approaches a large retailer, the latter can leverage its size to secure better pricing, more favorable payment terms, and additional marketing support, often to the detriment of the smaller entity. This scenario puts the start-up at a disadvantage, making it harder for them to compete effectively.

In contrast, improved negotiating power and higher sales revenue are typically advantages associated with larger corporations due to their established market presence and financial stability. Greater brand exposure can also be seen as a benefit for small start-ups when partnering with larger retailers, as it allows them to reach a broader audience. However, these benefits often come with the trade-off of weaker negotiating power, which is a core challenge for small businesses trying to scale.