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?
 Whoare 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
door.

 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
halt

 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
 Theywant 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.

 I do.

 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?

Ineed 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?


 Mustbe 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.

 Retailersneed 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

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