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Retail Distribution
move your product line to market
Small Business BCGerry Spitzner – retailSOS.ca
Find me: www.retailsos.tel
January 26, 2012
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ThoughtstartersPurchasing methodsDistributionProductPreparationInsights
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Roadmap
How to approach retailersWhy and how they buyRetail distribution channelsWhat buyers look for in a supplierWhat buyers look for in a productYour sales & marketing plan
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Objectives
POS= point of salePOP= point of purchaseWMS= warehouse mgmt system
SKU= stock keeping unitMOM= minimum order multiple
CPG= consumer package good
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Acronyms
IND= independent retailerUPC= universal product codeQR= quick response codePO= purchase orderGMROI= gross margin return on investment
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Acronyms
Thought startersThis 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.
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The 4 P’s of marketing◦Product, price, place & position
7 P formula for marketing success◦Promotion, productivity and “Profit-unities” or…
How will this product generate incremental profit?
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Thought starters
What’s the difference between your customers
and your consumers ?
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Thought starters
How to sell or why retailers buy; which do you prefer to learn?
Who are your prospects more likely to believe; themselves or you?
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Thought starters
Ever had buyers remorse?
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Thought starters
Show me the value; or I’ll show you the door.
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Important insight #1
How to approach retailers
Do you sometimes wish you could just read your buyer’s mind?
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Top line sales and cash flow
Customer trafficCustomer profitabilityStaff productivityReturn on investment; ROI
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What are retailers thinking about?
Do we really need that?
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What are retailers thinking about?
Inventory is the retail gamble
That’s why it’s the main focus of all retailers
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What are retailers thinking about?
Make yourself irresistible to crazy-busy customers
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How to approach retailers
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
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Crazy busy buyers
Most of their options seem like near clones of one another
They suffer no fools gladly
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Crazy busy buyers
Keep things simpleDemonstrate strong biz case
Minimize the riskPrepare, prepare, prepare
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Successful Selling to Crazy-Busy People
Make your presentation in terms of the customer.
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How to approach retailers
How they benefit, how they profit, and how they
produce will provide value.
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How to approach retailers
Why and how they buy
Taking a look at the purchasing process from the buyer’s perspective offers invaluable insight to consider in your own selling process.
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Profit; make money or save time
Want to find something (new) that turns over at a price that will make them money
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Why they buy
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
Increases impulse sales = increase average sale/customer
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Why they buy
What your biz background isYour Financial meansNumber of years in businessGeographical limitations
◦ What area can you physically cover and ship to?
Always remember while you are qualifying them; they are qualifying you.
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What buyers look for in suppliers
Trend watching; help me with what’s hot.
Tell me about something new or up and coming before telling anyone else.
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What buyers look for in suppliers
You need to know my customers.
I do. Ask me.
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What buyers look for in suppliers
How you are going to educate the customer about your product and get them to try it in my store?
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What buyers look for in suppliers
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.
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What buyers look for in suppliers
Shop the store ahead of time
Understand the strategic positioning of the store
Keep things simple; make your presentation short and snappy Gerry SpitznerretailSOS.ca 31
What sellers ought to do
Objections and roadblocks
Understand customers situation
Help me move product and make money; frame your sale this way.
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What sellers ought to do
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 get overwhelmed by what you're
saying.
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Important Insight #2
Retail Distribution & Logistics Channels
Retail distribution channels consist of some combination of producers or manufacturers, agents or brokers, wholesalers or distributors, importers, and retailers.
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3 Main supply chain channels...
WholesalersDSD; (Direct Store Delivery)Chain; Self Distributors
◦ What is your cost to ship to your customer?
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Retail logistics channels
Department storesMass & Big BoxSpecialty & DiscountCatalogue & InternetGrocery & Drug StoresConvenience stores
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Retail distribution channels
Within each category; 3 types
Chain Banner storesIndependent stores
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Retail distribution channels
Is the product WMS friendly?
Case and product UPCDealing with concealed damages
Case packGerry SpitznerretailSOS.ca 38
In the Logistics Channel
Consider using a professional agent, broker or wholesaler
When you don’t have your own sales team
There is a cost; however they have connections and already established relationships Gerry SpitznerretailSOS.ca 39
Retail reps
What buyers look for in a product What you say and how you deliver your “pitch” will make all the difference...
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Where else are you selling this product?◦What makes it sell?
I need to know why your product will be wanted by my customers.◦Is there a “market match”?
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What buyers look for in a product
Is there a need or a market?
Or both? A need alone does not = a market; desire does
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What buyers look for in a product
Push or pull product?Is your product future proof?
What is the life cycle of product?
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What buyers look for in a product
Taste, health, ingredients, appearance, sustainability, preparation, packaging, customer value...etc etc.
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What buyers look for in a product
Look for items that are different; not the same; uniqueness
Must be easily understood by store staff and consumers
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What buyers look for in a product
Add interest and excitement to their stores with new products
What retail price can I get for this product?
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What buyers look for in a product
Some look at product first; ◦then see if they can ‘carry’ the price
Others look at cost first; ◦they are judging the selling price and then a product to fit or match
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What buyers look for in a product
Pricing and Merchandising
Setting the right price for your products and services requires balancing merchandising, pricing, placement, packaging, and promotion.
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Do not compromise on your price
Know your competition Know your taxesWholesaler upcharges Brokers feesInclude all your costs
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Cost Pricing for Retail
Mark up and marginGross profit percent; GP%Gross profit dollars; GP$Gross margin percent; GM%
Gross margin dollars; GM$Gerry SpitznerretailSOS.ca 50
Setting Retail Shelf Prices
Tamper proof packagingUPC code that stays on package
Display racks and traysDisplay packages with a window
Off shelf areas for new mixGerry SpitznerretailSOS.ca 51
How to deal with merchandising
Plan-o-grams & compliance
Package size/dimensionsPhotosMust fit on a shelf in the section or category it is merchandised in Gerry SpitznerretailSOS.ca 52
How to deal with merchandising
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.
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Endure long receivable cycle
Provide datingProvide prompt pay discount
Payment by credit cardEven risk not being paidGerry SpitznerretailSOS.ca 54
Be Prepared to:
Provide a listing allowancePrepay freight; delivery to door
Clear up damages and returns
Have a plan for recallSign a vendor agreementGerry SpitznerretailSOS.ca 55
Be Prepared to:
Use a wholesaler or broker that specializes in your product
Referrals are the way to go
Value in a short term incentive
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Consider
Becoming the retailer & go online
The use of online business media
Carefully consider consignment Gerry SpitznerretailSOS.ca 57
Consider
National chain retailers have their own import department
Why do they need you?
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Consider
What now?Now what or what now? …
Your outlook is a matter of your positive attitude and willingness to help.
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Retailers need new mix to create, engage and keep customers.
Increase impulse sales and profit
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Stepping Stones
Chain retailers like to act like small retailers
IND retailers look for unique products not in chains
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Stepping Stones
How can you?...Help them make moneySave them timeMake them feel safeMake them feel special
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Stepping Stones
Confidence is the #1 factor ◦in determining what, from who and where retailers buy...
quality is #2, service is #3selection is #4 and price is #5
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Important insight #3
Retailers are looking for new products to differentiate their stores...
They don’t have time to find them; this is your opportunity!
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The Opportunity
Decide first if you want to approach IND’s or chain retailers.
Then determine your exact retail target and method of distribution.
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What Now?
Start a sales & marketing plan.
Understand your target market and it’s buying motivators. ◦Retailer (your customer) and end
consumers
Who, what, where and why?
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What Now?
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
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What Now?
Your evaluation is appreciated
Want a copy of this presentation with my speakers notes?
E-mail me; gerry@retailsos.ca
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Thanks!
Follow Twitter: @passion4retail Connect LinkedIn: Gerry Spitzner Web/Blog: retailsos.ca Email: gerry@retailsos.ca Digital Biz Card: gerryspitzner.tel Digital Biz Card: retailsos.tel
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Find me
For bar code info; www.gs1ca.org
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* Gerry SpitznerretailSOS.ca 70
Resource Links
For QR codes: www.qrstuff.com
For wholesalers; use Google key words; *wholesale (your product category i.e. clothing) vancouver bc*
Retail association: www.shelfspace.ca
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Resource Links
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
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Learning Links
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
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Learning Links
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
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Books