SBBC Retail and Distribution 23Mar2015

Retail Distribution

move your product line to market

Small Business BCGerry Spitzner | retailSOS.ca

March 23, 2015

Why retailers buy How to approach retailers What retailers are thinking about What retail buyers look for in suppliers What retail buyers look for in a product Retail pricing & merchandising Retail distribution, supply chain & logistics

channels Your sales & marketing plan

retailSOS.ca | Gerry Spitzner 2

Learning Objectives

POS = point of sale POP = point of purchase SKU = stock keeping unit PO = purchase order EDI = Electronic Data Interchange EFT = Electronic Funds Transfer IND = independent retailer UPC = universal product code QR = quick response code


Common Retail Acronyms

Thought StartersThis packet of thought starters is just that; a starting point.


What is the real purpose of a business?◦ Profit is merely a result of the business. Not a purpose.

Creating, engaging and keeping customers is the key to repeat business and long term survival for your business, and the retailers business.◦ Why does your business exist? ◦ How will you create, engage and keep your customer?◦ What purpose does it serve?


Thought Starter

Who is your customer… really?

What’s the difference between your customers and your consumers ?◦ Most retailers think YOUR end consumer is their

customer, and they themselves; the retailer, is your customer.

◦ If you frame your sales proposition this way, you'll always be on the safe side with all retailers.

◦ Retailers don't appreciate suppliers who make assumptions about THEIR customers.


Thought Starter

Have you ever had buyers remorse?◦ Every retail buyer has had this feeling too.◦ People do business with people they know, like and

trust.◦ Most buyers/retailers are sceptical and cautious

about new products; especially when doing business with people they don’t know.

◦ Your value proposition and the professional relationship you build with prospects will make all the difference to help them buy.


Thought Starter

How to sell or why retailers buy; which do you prefer to learn?◦ Beware the myth of “closing the sale” or Always Be Closing mantra.◦ Who are people more likely to believe; themselves or you?◦ Who is better at closing the sale; your potential retail customer or you?

The simple truth about selling – and the secret to selling more - is that your customers are better at “closing” the sale than you are. ◦ If you’re able to lead them to it. All you need are the right questions. ◦ Show me the value; or I’ll show you the door.


Thought Starter

What exactly is value in the 21st century?◦ Value is a function of the bundle of perceived benefits offered at a

given price. Perception is in the eyes and ears of the beholder. ◦ Value is not determined by the people who set the price, it is

determined by those who choose to pay the price.◦ Sell the ‘applied’ benefits you and your product offer. Develop a

unique value proposition of the tangible results a customer gets.◦ Prospective customers should be able to visualize exactly what

value you and your product could bring their organization.◦ In order to engage your prospect, your customer, there must be

some form of interest or perceived value on their part.


Important insight

Why retailers buySimply put; a retailer is looking to drive business TO and THROUGH their store.


Want products that turn over at a price that will make them money.

Want to know the repeat purchase potential, and can it be replenished quickly and reliably.

The repeat purchase and sale is the profitability of the sku for the retailer.

Repeat sales are ‘through put’ and one of the most important applied benefits of your product or service.


Why retailers buy

How can I keep my customers in the store longer?◦ Increases the average sale per customer;

sales/transactions.◦ It’s a proven fact that the longer a customer stays in the

store; the more money they will spend. Look at products through the eyes of consumers to

meet leading trends for impulse sales.◦ Start with demand-driven insight; present ideas on how

the consumer benefits. Applied benefits.◦ Increased impulse sales means increased average sale per

customer; most often with profitable ‘new’ product mix.retailSOS.ca | Gerry Spitzner 12

Why retailers buy

Confidence is the #1 factor ◦ in determining what, from who and why retailers

buy... Quality is #2, Service is #3 Selection is #4 and Price is #5

◦ PRICE IS PRICE; VALUE IS THE TOTAL EXPERIENCE


Important insight

How to approach retailers

Stop ‘selling’ and help your customers buy. Learn to listen; don’t focus so much on you and your message. Focus first on your customers.


How they benefit, how they profit, and how they produce sales will provide value.◦ Your customer (buyer) wants to know what’s in this

for them and their customer (your consumer)?◦ Focus your efforts on helping your customer to

make a difference in their customer’s experience, not just on you getting a sale.

◦ Consider the Life Time Value of a customer and think customers for life, rather than as a single transaction.

◦ Get great at sales planning to engage and build a relationship to position yourself as a trusted advisor.


Make your presentation in termsof the retailer; your customer.

Chain retailers like to act like IND’s IND retailers look for products not in chains

◦ Dominant relationship at chain retail is with large company brand suppliers.

◦ Dominant relationship at IND’s is with independent suppliers and wholesalers.

◦ Chain retailers rarely consider a product that hasn’t been tested and proven in a local market small retailer.

◦ Chain retailers will often test market or pilot new products in a handful of stores.

◦ With most IND’s; you can deliver product on the spot (i.e. from your vehicle); and they pay right away.


Approach to IND’s is different than approach to chain.

There are four basic ‘currencies’ in all peoples lives that are motivators, which create needs, wants, desire and value.

How can you?... 1. Help them make money 2. Save them time 3. Make them feel safe 4. Make them feel special


Important insight

What are Retailers Thinking About?

Do you sometimes wish you could just read your buyer’s mind?


1. Complexity and information overload brings them to a screeching halt.

2. They subscribe to the “ If it ain’t broke, don’t fix it “ philosophy.

3. They think making risky decisions is career inhibiting.

4. Most options seem like near clones of one another. 5. Not tolerant of stupidity or incompetence in other

people.retailSOS.ca | Gerry Spitzner 19

5 things retailers are thinking about

Focus on their challenges◦ Your prospects only care about their challenges, not your

products or services. They don’t care how awesome you are. Share outcomes

◦ Give examples of similar customers that you’ve worked with in the past and the results they achieved.

Engage in Conversation◦ Plan your questions ahead of time because it’s impossible to

think of good ones on the spot. Suggest Next Steps

◦ Make sure to recommend a logical follow-up to this initial meeting or conversation.


Selling to Crazy Busy People

Source: Snap Selling-Jill Konrath

Keep things simple◦ Show them how you'll make it easy for them. Give them

fewer decisions to make. Demonstrate strong biz case

◦ Help them see how they'll achieve their primary business objectives by working with you.

Minimize the risk◦ Propose smaller initial contracts, deals or opening orders.

Prepare, prepare, prepare◦ Think everything through in advance. Leave nothing to

chance.


Selling to Crazy Busy People

Source: Snap Selling-Jill Konrath

Avoid the temptation to leap to solutions; it is often the single biggest barrier between you and your prospective customer.

The answer is no... ◦ If they feel pressure from you◦ If they feel like you're trying too hard to be liked◦ If they don't think you understand their business◦ If they think you’re focused on what’s in it for you◦ If they get overwhelmed by what you're saying


Important Insight

What retail buyers look for in suppliers

In addition to mentally preparing for the meeting, here's some of the things a retail buyer may ask or expect to see at your presentation.


Number of years in business Your Financial means Your business background Geographical limitations--What area can you

physically cover and ship to? Sales qualification isn't an event - it's a process The position you hold in your customers mind

determines all reactions and interactions with you. Make me feel safe you will survive beyond the first

time I buy.retailSOS.ca | Gerry Spitzner 24

While you are qualifying them;

they are qualifying you.

What’s happening in the marketplace? Come in with some facts & market research. Sales trends in the category, consumer

research. Trend watching; help me with what’s hot and

what’s not. Tell me about something new. Be an information resource. Make me feel special; help me.


Do not expect the retail buyer to know everything about your product category

How will you educate my customers about your product and get them to try it?◦ There needs to be a clear, confirmed match between what

customers need and want and what you are offering.◦ You need to know what it is about my customers that will

make your product sell in my store.◦ I need to know your advertising and promotions plan to

ensure your product will survive in this competitive environment.

◦ Buyers want to see that you are committed to your brand and that you will promote your product so that people will become aware of it and then come to the store to ask for it.


You need to know my customers. I do.

What buyers look for in a product Products need support for the long term. You have to give consumers time to buy it, try it, consume it and hit the repeat button. Help me move it; and promote it.


Inventory is the retail gamble. It’s easy to turn cash into inventory...the challenge is to turn inventory into cash.◦ Moving it and repeating it; is cash flow. And cash flow is the life

blood of the business. Inventory is one of the top two controllable assets in the

business. Constantly scrutinized and measured.◦ Will your product replace sales of what I currently have?◦ Does your product fit my current market mix? ◦ Do I have the space to merchandise it?◦ Do I have the money (cash flow) to pay for it?◦ What happens if it’s not moving and I’m stuck with it?


Do we really need that?

Where else are you selling this product?◦ What makes it sell? What problem does it solve? Will my

customers look for it? What does it ultimately help my customers achieve?

◦ Is there a need or a market? A need alone does not mean there is a market; desire does. Desire is the sweet spot where the market is.

How will it bring new customers to my store? ◦ Beware the myth of being different and unique. Being unlike

anything else on my shelf is not always enough. Being different and unique; doesn't equal desirable; and desire is what moves the customer to purchase.

What does the product do or how does it work?◦ Must be easily understood by store staff and consumers.


What buyers look for

Push or pull product? Is your product future proof? What is the life cycle of product? Is there a barrier to entry? For me; my

competitors? Will this item make my store more appealing? Will it add to my average sale per customer? Will the retail price point of this item be in the

range of what my customers will spend?


What buyers look for in a product

A retailer’s shelf space is their commodity.◦ That’s why they are careful about what

inventory they put on them. ◦ They need new products that add interest, value

and ‘excitement’ to their stores.◦ Just because you are new, doesn’t mean you are

not worth the chance.◦ Retailers need new mix to create new; engage

and keep customers to increase impulse sales and profit.


Important Insight

Pricing and Merchandising

Setting the right price for your products and services requires balancing merchandising, pricing, placement, packaging, and promotion.


Know your competition’s pricing. Do not compromise on your price

◦ Negotiate the price you deserve Know your taxes; PST/GST/Tariffs; include in

your price◦ Is your product vulnerable to currency fluctuations?

Wholesaler upcharges◦ Include upcharges in your quoted price to retailers.

Include all your costs◦ Packaging, shipping and your operational expenses.


Setting Your Cost

Mark up & margin are different.◦ Mark up is % of profit on cost◦ Margin is % of profit on selling price

These terms often get confused in the conversation...◦ Gross profit percent; GP% (markup)◦ Gross profit dollars; GP$ (markup)◦ Gross margin percent; GM% (margin)◦ Gross margin dollars; GM$ (margin)◦ Note: “Gross Profit” is often used as a generic term by retailers


Setting Retail Shelf Prices

POP is important Display racks and trays Off shelf areas for new mix Plan-o-grams & compliance Package size/dimensions; and photos of your product UPC code; if added later make sure stays on package Effective packaging; must fit on shelf it is going to be

merchandised on; ‘tamper’ proof; anti theft tags


Merchandising

Retail Distribution, Supply Chain

& Logistics ChannelsSupply chain channels consist of some combination of producers or manufacturers, agents or brokers, wholesalers or distributors, transportation, importers, and retailers.


Can you replenish quickly; do you have a solid supply chain? Speed to market is just as important; if not MORE important;

than the shelf price or cost of an item. If your product goes on a “run” or a “heater” can you

supply? Your supply chain to the manufacturer becomes part of my

supply chain and I care what it is. An empty display or shelf space is deadly to you as a

supplier. It won’t last more than a few hours. And your space will be gone. Something else will fill your selling space.


Supply ChainImportant Insight

Three main logistics channels...◦ Different cost structures to ship to your retail customer.

Wholesalers◦ Are intermediaries or middlemen who buy products from

manufacturers and resell them to the retailers. Direct Store Delivery; “DSD”

◦ When a supplier ships directly to the retailer’s door.◦ Sometimes could be a ‘drop ship’ billed through a

wholesaler. Self Distributors; Chain retail

◦ What is your cost to ship to the retailers distribution point?


Retail logistics channels

Is the product WMS friendly? Case and product UPC Can the box (case) stand up to wear and tear so

you don’t have to deal with concealed damages. Master case pack; are smaller minimum order

multiples possible? Especially for IND’s. Insurance Logistics or ‘transportation’ charges. How are

they determined?


In the Logistics Channel

Retail Distribution

Retail Categories Retail Channels

Department Mass & Big Box Specialty & Discount Catalogue & Internet Grocery &

Drug/Pharmacy Convenience

Within each retail category; 3 types of stores…

Chain stores Banner stores Independent stores Pick one category and

one channel and work it.


Your Sales & Marketing Plan

A successful marketing plan doesn't have to be complex or lengthy, but should contain enough information to help you establish, direct and coordinate your marketing efforts.


The 4 P’s of marketing◦ Product, Price, Place and Position◦ Core elements of all products or services.

The 7 P formula for marketing success◦ Include Promotion, Productivity and “Profit-unities”

How will your product generate incremental sales for the retailer? And repeat. Again and again.

It’s all about moving product and how you are going to help the retailer move your product.

What will you do to support and help make that happen?


Sales & Marketing Plan Basics

Provide a line sheet Sign a vendor agreement Provide a listing allowance Prepay freight; delivery to door Endure long receivable cycle; risk not being paid Provide dating and /or a prompt payment discount Have a plan to deal with payment by credit card Clear up damages and returns; have a plan for recall


Be Prepared to:

Carefully consider consignment Value in a short term incentive Becoming the retailer & go online; e-

commerce The use of online business media to

promote Using a wholesaler or broker that

specializes in your product category Almost all national chain retailers have

their own import department. Why do they need you?


Consider

Consider a professional agent, broker or wholesaler.◦ When you don’t have your own sales team or sales is not

your strong point.◦ Make sure they really understand your business and have

contacts at retailers where you want your product to be.◦ There is a cost; however they have connections and

already established relationships.◦ Royalty or a % of sales; factor this into your Cost Of Goods◦ Some wholesalers have their own sales dept. that you

may be able to “tap into” for representation.


Agents | Brokers andRetail reps

What now?Now what or what now? …

Your outlook is a matter of your positive attitude and willingness to help.


Define your unique value proposition and keep it current. Keep crafting and working on it.◦ Focus on applied benefits not just features.◦ Value is the bundle of perceived benefits offered at a given

price.◦ Your UVP should include what you bring to retailers. ◦ Why should my ideal prospect ( or the group you intend to

serve) buy from me instead of a competitor? ◦ Your product and you need to be better on at least one value

than anyone else; your unique point of distinction (difference).

◦ Plan, Execute, Learn, Adjust, then Go Back to Execute.


What Now?

Start a strategic sales & marketing plan as a blueprint.◦ Establish a market first, not a product.◦ Understand where your target market is, who your ideal

customer is and ideal consumer buying motivators. ◦ Consider what you can do to help retailers minimize

risks and maximize profitability.◦ Decide first if you want to approach IND’s, banner or

chain retailers. Then determine your ideal retail customer and method of supply chain distribution.

◦ Figure out what it will cost you...can you make money?


What Now?

Smart retailers are always looking for new products to differentiate, add excitement, drive customer traffic and create new sales in their stores...◦ However, they don’t have time to find them…◦ IND retailers tend to work IN the biz rather than ON the

biz...chain retailers tend to work ON the business rather than IN the business.

◦ They need you to help them find the products and then help them “move” the inventory... This is your opportunity!


Got questions? Get answers? Email me…


Thanks!

Follow Twitter: @passion4retail Connect LinkedIn:Gerry Spitzner Web: retailSOS.ca Blog: gerryspitzner.com Email: [email protected] Online Biz Card: gerryspitzner.tel You Tube Channel: Gerry Spitzner


Find me

Gerry Spitzner is a retail consultant and optimist with a curiosity for improving life and business results. He believes in a bright future and our ability to build it together.

Drawing on 40+ years experience in multi-site retail operations, store ownership and the wholesale supply-chain; Gerry brings the leadership, knowledge and market awareness of business development to retail owners and their suppliers, helping them achieve their growth objectives. He teaches and inspires them to achieve results by aligning their vision with marketing strategy and operational execution.

Fascinated with a lifelong curiosity for why customers buy and a passion for retail; Gerry guides organizations to create, engage and keep great customers by delivering the promise of an extraordinary customer experience. He has devoted his life to sharing his thinking with leaders in retail to manage market analysis and build business plans that increase profitability through creating a competitive advantage.

His company is retailSOS.ca, a Vancouver-based business management consultancy with Strategic Operations Services to support retail owners and their suppliers to brand and market their strategy for optimal growth through customer experience. With a clear understanding of retailing he uses a solution oriented focus with ideas and alternatives that clients can use to address the changing marketplace issues they face right now. Gerry understands who they are, what they need, and where to find it.


About | retailSOS.ca is about implementation; not just information.

The difference between calculating markup and margin. 1. 40% mark up is different than 40% margin. Using a 1 dollar cost of

goods example. With a $1.00 cost; & a markup of 40% = selling price of $1.40; using same one dollar cost at 40% margin = $1.67 selling price.

2. Markup is % profit on cost; means the selling price is 40% of the cost and then added to the cost (1.00 x .40) +1=1.40. This is “markup”. (Apparel retailers typically use this formula to set retails.)

3. Margin is % profit on selling price; means the cost of goods is 60 % of the selling price; profit is 40% of the selling price (or the retail); i.e. 1.00 divided by .60 =1.66666 equals 40% “margin”. This is margin.

4. So, if a retailer needs a “margin” of 40%; the “markup” needs to be 66 2/3% for a retail of 1.67

5. You can now see from the example that although markup and margin may be the same in dollars (.67 {cents}), they represent two different concepts as percentages (66 2/3% {markup} versus 40% {margin}).

More than a few new businesses have failed to make their expected profits because the retail owner assumed that if markup is X percent, his or her margin will also be X percent. This is not the case.


Appendix 1 | How retailers set retail shelf prices

For mfr agents info: http://www.cylex.ca/vancouver/manufacturers%20agents%20representatives.html

For list of mfr agents; Google key words; *manufacturers agents vancouver bc*; or *{your key word i.e. food brokers} vancouver bc*

For wholesalers; use Google key words; *wholesale (your product category) vancouver bc*


Resource Links

http://www.cylex.ca/vancouver/manufacturers%20agents%20representatives.html

http://www.cylex.ca/vancouver/manufacturers%20agents%20representatives.html

WalMart vendor agreement: http://www.walmartstores.com/Suppliers/248.aspx Canadian Tire vendor agreement: http://corp.canadiantire.ca/EN/JoinOurTeam/Suppliers/Pages/Su

pplierRequirements.aspx Target vendor agreement: http://img1.targetimg1.com/wcsstore/marketing/ca/company/i

mages/canada/pdf/Vendor_Online_Agreement.pdf

Home Depot vendor agreement: https://homedepotlink.homedepot.com/en-us/Related%20Docu

ments/Canada%20Supplier%20Terms%20and%20Conditions02-04.pdf


Resource Links

http://www.walmartstores.com/Suppliers/248.aspx

http://corp.canadiantire.ca/EN/JoinOurTeam/Suppliers/Pages/SupplierRequirements.aspx

http://corp.canadiantire.ca/EN/JoinOurTeam/Suppliers/Pages/SupplierRequirements.aspx

http://img1.targetimg1.com/wcsstore/marketing/ca/company/images/canada/pdf/Vendor_Online_Agreement.pdf

http://img1.targetimg1.com/wcsstore/marketing/ca/company/images/canada/pdf/Vendor_Online_Agreement.pdf

https://homedepotlink.homedepot.com/en-us/Related%20Documents/Canada%20Supplier%20Terms%20and%20Conditions02-04.pdf



For QR codes: www.qrstuff.com For bar code info; www.gs1ca.org Retail Pricing & Trade issues

◦ http://www.agf.gov.bc.ca/foodprocessing/documents/retailer/section4.pdf

Retail associations:◦ Retail Council of Canada: www.retailcouncil.org◦ NRF - National Retail Federation; Global retail:◦ http://www.nrf.com/


Resource Links

http://www.qrstuff.com/

http://www.gs1ca.org/

http://www.agf.gov.bc.ca/foodprocessing/documents/retailer/section4.pdf



http://www.retailcouncil.org/

http://www.nrf.com/

Sales & Marketing◦http://www.raintoday.com

Sales help and power questions◦http://www.gitomer.com/salesHelp/Sales-Help.ht

ml Sales help and power questions

◦http://andrewsobel.com/ Sales and personal development

◦http://www.briantracy.com Sales strategy and value propositions

◦http://www.jillkonrath.com/retailSOS.ca | Gerry Spitzner 57

Learning Links

http://www.raintoday.com/

http://www.gitomer.com/salesHelp/Sales-Help.html

http://www.gitomer.com/salesHelp/Sales-Help.html

http://andrewsobel.com/

http://www.briantracy.com/

http://www.jillkonrath.com/

Trends: www.trendhunter.com Trends: www.springwise.com Trends: www.trendwatching.com Pricing and margin definition:

◦http://en.wikipedia.org/wiki/Gross_margin Retail, sales & marketing and small business:◦www.retailwire.com


Learning Links

http://www.trendhunter.com/

http://www.springwise.com/

http://www.trendwatching.com/

http://en.wikipedia.org/wiki/Gross_margin

http://www.retailwire.com/

Little Red Book of Selling or The Sales Bible; Jeffrey Gitomer◦ www.gitomer.com

Be Different or Be Dead; Roy Osing◦ www.bedifferentorbedead.com

Unmarketing: Scott Stratten◦ www.unmarketing.com

Enchantment: Guy Kawasaki◦ www.guykawasaki.com/enchantment

Any of Gary Vaynerchuk’s books;◦ www.garyvaynerchuk.com/


Books

http://www.gitomer.com/

http://www.bedifferentorbedead.com/

http://www.unmarketing.com/

http://www.guykawasaki.com/enchantment

http://www.garyvaynerchuk.com/

http://www.garyvaynerchuk.com/

Date post:	10-Feb-2017
Category:	Retail
Upload:	gerry-spitzner
View:	95 times
Download:	0 times