small business bc-retail distribution-26 nov2012

Small Business BC Gerry Spitzner | retailSOS.ca

Find me: www.retailSOS.tel

November 26, 2012

Thoughtstarters

Purchasing methods

Distribution

Product

Preparation

retailSOS.ca | Gerry Spitzner 2

Insights for creating, engaging and

keeping your customer

Inputs and considerations to your

business plan

Your questions

Anything you would like to cover?

How to approach retailers

Why and how they buy

What buyers look for in suppliers

What buyers look for in a product

Pricing and merchandising

Retail distribution channels

Your sales and marketing plan

POS = point of sale

POP = point of purchase

WMS = warehouse mgmt system

SKU = stock keeping unit

MOM = minimum order multiple

CPG = consumer package good

IND = independent retailer

UPC = universal product code

QR = quick response code

PO = purchase order

GMROI = Gross Margin Return On Investment

CRM = Customer Relationship Management

EDI = Electronic Data Interchange

EFT = Electronic Funds Transfer

EDLP = Everyday Low Pricing

OTB = Open-to-Buy

POG = Plan-o-gram

RDA = Retail Display Allowance

This packet of thought starters is

just that; a starting point. Let your

mind wander and consider what you

can do to help retailers minimize

risks and maximize profitability.

The 4 P’s of marketing

◦ Product, Price, Place and Position

7 P formula for marketing success

◦ Promotion, Productivity and “Profit-unities”

How will this product generate

incremental sales? And repeat.

What’s the difference between your

customers and your consumers ?

How to sell or why retailers buy; which do

you prefer to learn?

Who are people more likely to believe;

themselves or you?

Who is better at closing the sale; the

potential retail customer or you?

Have you ever had buyers remorse?

Show me the value; or I’ll show you the

What is value in the 21st century?

◦ A function of the bundle of perceived benefits

offered at a given price.

◦ Sell the applied benefits of the benefit you and

your product offer.

Do you sometimes wish you could

just read your buyer’s mind?

Ask; don’t tell.

Stop ‘selling’ and help your

customers buy.

Top line sales and cash flow

Customer traffic

Customer profitability

Staff productivity

Return on investment; ROI

Do we really need that?

◦ does your product fit my current market mix,

◦ do I have the space to merchandise it,

◦ do I have the cash flow (money) to pay for it?

Inventory is the retail gamble

It’s easy to turn cash into inventory...the

challenge is to turn inventory into cash.

Make yourself irresistible to crazy-busy

customers

Complexity brings them to a screeching

They subscribe to the “ If it ain’t broke,

don’t fix it “ philosophy

They think making risky decisions is

career inhibiting

Most of their options seem like near

clones of one another

Not tolerant of stupidity or

incompetence in other people.

Make your presentation in terms of the retailer, your customer.

How they benefit, how they profit, and

how they produce will provide value.

Keep things simple

Demonstrate strong biz case

Minimize the risk

Prepare, prepare, prepare

Taking a look at the initial

purchasing process from the buyer’s

perspective offers invaluable

insight to consider in your own

selling process.

Profit; make money or save time

Want products that turn over at a price

that will make them money

They want to know the repeat purchase

potential, and can it be replenished

quickly and reliably.

How can I keep my customers in the

store longer?

◦ Increases the average sale per customer

Look at products through the eyes of

consumers to meet leading trends

◦ Increased impulse sales = increased average sale

per customer

In addition to mentally preparing for

the meeting, here's a list of some of

the things a retail buyer may expect

to see at your presentation.

What your biz background is

Your Financial means

Number of years in business

Geographical limitations

◦ What area can you physically cover and ship to?

Always remember while you are qualifying

them; they are qualifying you. Know, like, trust.

Do not expect the retail buyer to know

everything about the product category.

◦ Come in with some facts & market research.

◦ Sales trends in the category, consumer research.

◦ Trend watching; help me with what’s hot.

◦ Tell me about something new or up and coming.

◦ What’s happening in the marketplace?

You need to know my customers.

Do your market research ahead of

meeting me and then ask me.

I need to know your Advertising and

promotions plan.

How you are going to educate my

customers about your product and get

them to try it in my store?

I don't have these answers for your

product, you do. Or you should.

Can you replenish quickly; do you have a

solid supply chain?

Speed to market just as important (if not

MORE important) than the shelf price or

cost of an item.

Your supply chain to the MFR. becomes part

of my supply chain and I care what it is.

Objections and roadblocks

◦ Objections are signposts that lead you step-by-

step toward closing the sale.

Understand your customers situation

◦ Help me move product and make money; frame

your sale this way.

◦ The buyer is dealing with limited shelf space

Shop the store ahead of time

Understand the strategic positioning of the store

Keep things simple; make your presentation short and snappy

Don’t show everything you have at once. Too many choices confuses the buyer.

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.

What you say and how you deliver

your “pitch” will make all the

difference...

Where else are you selling this product?

◦ What makes it sell?

◦ What problem does it solve?

I need to know why your product will be

wanted by my customers.

◦ Is there a “market match” to my market?

◦ What does it ultimately help my customers

achieve?

Is there a need or a market?

Or both?

A need alone does not = a market;

Desire does

And desire is the sweet spot where the market is.

Push or pull product?

What is the barrier to entry?

Is your product future proof?

What is the life cycle of product?

Taste, health, ingredients, appearance,

sustainability, preparation, packaging,

customer value...etc etc.

All buyers do things for their own

reasons, figure out what the buyer wants

and then provide it for them.

A retailer’s shelf space is their

commodity.

Add interest and ‘excitement’ to their

stores with new products and value.

Will this item make my store more

appealing?

Must be easily understood by store staff

and consumers.

How & Who will educate my customers?

What retail price can I get for this

product?

The retail pricing approach depends on

the product and the buyer.

Some look at product first;

◦ then see if they can ‘carry’ the price

Others look at cost first;

◦ they are judging what the selling price would be

and if a fit to their market or match in a category.

Setting the right price for your

products and services requires

balancing merchandising, pricing,

placement, packaging, and

promotion.

Know your competition

Do not compromise on your price

Know your taxes; HST to PST/GST

Wholesaler upcharges

Brokers fees

Include all your costs

Mark up & margin. What’s the difference?

All of these terms can get confused in

the conversation.

◦ Gross profit percent; GP%

◦ Gross profit dollars; GP$

◦ Gross margin percent; GM%

◦ Gross margin dollars; GM$

Tamper proof packaging

Display racks and trays

Display packages with a window

Off shelf areas for new mix

Must fit on shelf in section or category it

is going to be merchandised in

Plan-o-grams & compliance

Package size/dimensions

Photos

UPC code

UPC code that stays on package

Packaging is effective and worthy of

shelf space

Retail distribution channels consist of some combination of producers or manufacturers, agents or brokers, wholesalers or distributors, transportation, importers, and retailers.

Three main supply chain channels...

◦ What is your cost to ship to your customer?

Wholesalers

Direct Store Delivery; DSD

Self Distributors; Chain

Department stores

Mass & Big Box

Specialty & Discount

Catalogue & Internet

Grocery & Drug Stores

Convenience stores

Within each retail category; 3 types

◦ Chain

◦ Banner stores

◦ Independent stores

Who exactly is your ideal customer?

◦ Who is your end consumer?

◦ Where and why does he or she buy?

Is the product WMS friendly?

Case and product UPC

Dealing with concealed damages

Case pack; smaller MOM’s?

Logistics or transportation charges; how

are they determined?

Consider using a professional agent,

broker or wholesaler.

◦ When you don’t have your own sales team or sales

is not your strong point .

◦ There is a cost; however they have connections

and already established relationships.

◦ Some wholesalers have their own sales dept. that

you may be able to “tap into” for representation.

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.

Endure long receivable cycle

Provide dating

Provide prompt pay discount

Payment by credit card

Even risk not being paid

Provide a listing allowance

Prepay freight; delivery to door

Clear up damages and returns

Have a plan for recall

Sign a vendor agreement

Use a wholesaler or broker that specializes in your product category

Referrals are the way to go

Value in a short term incentive

Becoming the retailer & go online

The use of online business media

Carefully consider consignment

There is a stumbling block...for

importers.

National chain retailers have their own

import department.

Why do they need you?

Now what or what now? …

Your outlook is a matter of your

positive attitude and willingness

to help.

How can you?...

Help them make money

Save them time

Make them feel safe

Make them feel special

Confidence is the #1 factor ◦ in determining what, from who and where retailers buy...

quality is #2,

service is #3

selection is #4

and price is #5

The approach to IND’s and Banners is

different than approach to chain...

Chain retailers like to act like small

retailers

IND and Banner retailers look for

products not in chains

Just because you are new, doesn’t mean

you are not worth the chance.

Retailers need new mix to create,

engage and keep customers.

Increase impulse sales and profit

Decide first if you want to approach IND’s,

banner or chain retailers.

Then determine your exact ideal retail

customer and method of distribution.

Start a sales & marketing plan.

Understand your target market and it’s

buying motivators.

◦ Retailer (your customer) and end consumers

Who, what, where, how and why?

Define your unique value proposition

and keep it current.

Focus on benefits not just features.

◦ Value is the bundle of perceived benefits offered at

a given price.

◦ Consider the applied benefits of the benefit.

◦ Your UVP should include what you bring to the

table.

Retailers are looking for new products to

differentiate their stores...

◦ They don’t have time to find them;

◦ They need you to help them find the

products and then help them “move” the

inventory...

This is your opportunity!

Your evaluation is appreciated...

Want a copy of this presentation with my

speakers notes?

E-mail me; gerry@retailSOS.ca

Follow Twitter: @passion4retail

Connect LinkedIn: Gerry Spitzner

Web: retailSOS.ca

Blog: gerryspitzner.com

Email: gerry@retailsos.ca

Online Biz Card: gerryspitzner.tel

Online Biz Card: retailSOS.tel

retailSOS.ca is a Vancouver-based retail consultancy guiding small business owners to create, engage and keep great customers by doing the right thing really well.

Gerry Spitzner works as a management consultant supporting retail and small business owners to achieve results by aligning their vision and implementing marketing strategy with operational execution.

Drawing on 35+ years experience in multi-site retail operations, independent store ownership and the wholesale supply-chain; Gerry brings the leadership, knowledge and market awareness of ownership and business development to retail and small business owners to achieve growth objectives.

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 *{food brokers} vancouver bc*

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

WalMart Vendor agreement:

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

Canadian Tire vendor agreement:

http://corp.canadiantire.ca/EN/JoinOurTeam/Suppliers/Pages/Suppli

erRequirements.aspx

Target vendor agreement:

http://img1.targetimg1.com/wcsstore/marketing/ca/company/image

s/canada/pdf/Vendor_Online_Agreement.pdf

Home Depot vendor agreement:

https://homedepotlink.homedepot.com/en-

us/Related%20Documents/Canada%20Supplier%20Terms%20and%2

0Conditions02-04.pdf

For QR codes: www.qrstuff.com

For bar code info; www.gs1ca.org

Retail associations: Shelfspace - The Association for Independent

Retailers http://www.shelfspace.ca/

Retail Council of Canada: www.retailcouncil.org

NRF - National Retail Federation; Global retail http://www.nrf.com/

Sales questions: www.gitomer.com

Sales and personal development: www.briantracy.com

Retail, sales & marketing and small business: www.donaldcooper.com

Retail, sales & marketing and small business: www.retailwire.com

Sales & Marketing: www.raintoday.com

Trends: www.trendhunter.com

Trends: www.springwise.com

Trends: www.trendwatching.com

Pricing and margin definition:

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

Little Red Book of Selling; by Jeffrey Gitomer

The Sales Bible; by Jeffrey Gitomer

www.gitomer.com

Be Different or Be Dead; by Roy Osing

www.bedifferentorbedead.com

Unmarketing: by Scott Stratten

www.unmarketing.com

Enchantment: by Guy Kawasaki

www.guykawasaki.com/enchantment

small business bc-retail distribution-26 nov2012

customer look

potential retail customer

product pricing

product category

product offer

customer relationship

customer inputs

ps of marketing product

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