Thursday, September 15, 2016

Tune In to the Supplier Channel Together

Just as in your relationships with your store customers, it’s best when your buyer-seller interactions with your store’s merchandise suppliers can emphasize common interests. Most obvious among those is the objective of selling lots of whatever your suppliers sell to you. And most obvious of the areas in which interests can diverge is when it comes to payment terms.
     There are also areas for potential disagreement which could stay hidden unless you tune in to them together with your suppliers. Retailing scholars at Cornell University and Arizona State University identified one example—the container size of consumer packaged goods. Their research showed how suppliers benefit when a store carries larger package sizes. The profit margin per unit is bigger. However, the small to midsize retailer does better to have smaller packages sizes. Smaller packages ease the customer shock from price increases, since the absolute dollar amount of the hike is less. The smaller package footprint allows a broader variety of items to be stocked on the shelves, so the retailer can satisfy the needs and desires of more people. And in general, consumers like the option of a range of package sizes, including small packages.
     Once you’ve surfaced these sorts of divergent interests, negotiate collaborative solutions. For influence in the negotiations, show your value to your suppliers. Based on Arizona State University research about influencing in retailing, here are three approaches:
  • Distinctiveness. What do you offer your supplier that other customers do not? If you are a multistore retailer, what you have is the ability to place especially large orders. If you’re an independent one-store business, you can offer a distinctive flexibility in choosing to showcase items the supplier wants to try out at retail. 
  • Expertise. You’re closer to the customer than is the supplier. What valuable advice can you provide about product complaints and market trends? 
  • Consistency. If you’ve been a reliable account, placing orders predictably and paying on schedule, be sure your supplier recognizes this. If you’ve agreed to use point-of-purchase displays, use them as intended and report the results. 
     Another set of ways to tune in together is to undertake collaborative projects. For instance, have suppliers train your staff and shoppers. Checking out the quality of the training is a chance to team up with retailers who operate businesses like yours. Ask the supplier to put you in contact with other retailers where the supplier has done training.

For your profitability: Sell Well: What Really Moves Your Shoppers

Click below for more: 
Show Your Value to Your Suppliers
Have Suppliers Train Staff & Shoppers

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