Retail Distribution

move your product line to market

Small Business BCGerry Spitzner

Contact info at: www.retailsos.telWebsite: www.retailsos.ca

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Roadmap

• Thoughtstarters• Purchasing methods• Distribution• Product• Preparation• Insights

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Objectives

• How to approach retailers• Why and how they buy• Retail distribution channels• What buyers look for in a

supplier• What buyers look for in a

product• Your sales & marketing plan

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Acronyms

• POS= point of sale• POP= point of purchase•WMS= warehouse mgmt system• SKU= stock keeping unit• MOM= minimum order multiple retailSOS.ca 4Gerry Spitzner

Acronyms

• CPG= consumer package good• IND= independent retailer• UPC= universal product code• PO= purchase order• GMROI= gross margin return on investment

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Thought starters

• Product, price, place & position;• Consider promotion and productivity• “Profit-unities” — how is this product going to generate incremental profit for me?

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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?

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Thought starters

• Ever had buyers remorse?

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Important insight #1

• Show me the value; or I’ll show you the door.

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How to approach retailers

• 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

• Decide first if you want to approach IND’s or chain retailers.

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Things that annoy retailers

• Unsolicited faxes and emails• Damaged product & mis-picks• Invoice doesn’t match quoted price on purchase order• Poor paperwork

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Things that annoy retailers

• Cold calls•Weak approaches• Suppliers that disappear after the sale

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Why they buy

• Profit; to make money

•Want to find something (new) that turns over at a price that will make them money retailSOS.ca 16Gerry Spitzner

Why they buy

• How can I keep customers in the store longer?

• Look at products through the eyes of consumers

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What keeps retailers up at night

• Top line sales and cash flow• Customer traffic• Customer profitability• Staff productivity• Return on investment; ROI

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What keeps retailers up at night

• Do we really need that?

• Inventory management is the main focus

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What keeps retailers up at night

• Inventory is the retail gamble

• “Stack it high and watch it fly” has turned to “stack it low, so its sure to go” retailSOS.ca 20Gerry Spitzner

Retail distribution channels

•Wholesalers

• DSD; Direct Store Delivery

• Chain; Self Distributors

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Retail distribution channels

• Department stores• Mass & Big Box• Specialty and Discount• Catalogue and Internet

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Retail distribution channels

• Grocery and drug stores• Chain and banner stores• Convenience stores• Independent stores

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In the distribution channel

• Is the product WMS friendly?• Case and product upc• Dealing with concealed damages• Case pack retailSOS.ca 24Gerry Spitzner

What buyers look for in suppliers

•What your biz background is• Financial means• Number of years in business• Geographical limitationsretailSOS.ca 25Gerry Spitzner

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

•Where else are you selling this product?

• I need to know why your product will be wanted by my customers.

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What buyers look for in suppliers

• You need to know my customers.

• I do.

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What buyers look for in suppliers

• I need to know 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?

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Retail reps

• Consider using a professional agent, broker or wholesaler

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What sellers ought to do

• Shop the store ahead of time• Understand the strategic positioning of the store• Edit your assortments

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What sellers ought to do

• Objections & roadblocks• Understand customers situation• Help me make money!

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What buyers look for in a product

• Is there a need or a market?

• Or both?

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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 and customer value

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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; so they are judging the selling price and then a product to fit or match

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Pricing for retail

• Do not compromise on your price• Know your competition • Know your taxes•Wholesaler upcharges • Brokers fees

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Pricing for retail

• Retail margins and retail pricing• Mark up and “mark on”• Gross margin percent; GP%• Gross margin dollars; GM$retailSOS.ca 41Gerry Spitzner

How to deal with merchandising

• Tamper proof packaging• UPC code that stays on package• Display racks and trays• Display packages with a window retailSOS.ca 42Gerry Spitzner

How to deal with merchandising

• Plan-o-grams & compliance• Must fit on a shelf in the section or category it is merchandised in• Package size/dimensions• Photos

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Be Prepared to:

• Endure long receivable cycle• Provide dating• Provide cash discount• Payment by credit card• Even risk not being paid

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Be Prepared to:

• Provide a listing allowance• Prepaid freight; delivery to the retailers door• Clear up damages and returns• Have a plan for recall• Sign a vendor agreementretailSOS.ca 45Gerry Spitzner

Market research

• Seek Out Hidden Opportunities• Look Under Your Own Feet• Continually Scan the Radar of Opportunity• Find Something You Like and Believe InretailSOS.ca 46Gerry Spitzner

Market research

• Research what’s working• Go to where retailers are• The timing of your sale

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Consider

• Use a wholesaler that specializes in your type of product• Referrals are the way to go• Value in a short term incentive retailSOS.ca 48Gerry Spitzner

Consider

• Becoming the retailer & go online• Subscribe to newsletters• The use of business social media• Emerging cell phone apps for retail called “mobile retailing”

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Stumbling blocks

• Almost all national chain retailers have their own import department

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Stumbling blocks

• At the moment all retailers are focused on SKU rationalization and inventory management

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Stepping Stones

• Large retailers look for unique products; they like to act like small retailers• IND retailers look for unique products to differentiate and can act quicker than chain

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Stepping Stones

• Hunters and gatherers; find the hunters

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Stepping Stones

• How can you?...• Help them make money• Save them time• Make them feel safe• Make them feel special

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Important insight #2

• Confidence is the #1 factor in determining what and where retailers buy...• quality is #2, service is #3• selection is #4 • and price is #5

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The Opportunity

• Retailers look for products to differentiate their mix, add ‘excitement’ to their stores and make money.• They don’t have time to find them; this is your opportunity!

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What Now?

• Start a sales & marketing plan

• Understand your target market and it’s buying motivators. Who, where and why?

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What Now?

• Determine your target and method of distribution. How much will it cost you?• Define your unique value proposition & keep it current.•What’s in it for me? (WIIFM)

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Thanks!• Your evaluation is appreciated• On LinkedIn? Me too... connect with me• On Twitter? Me too... Follow meGerry Spitzner retailSOS.ca 59

Thanks!•Want a copy of this presentation with my speakers notes?

• E-mail me; retailsos@gmail.com• Contact info; www.retailsos.tel

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Resource Links• For bar code info; www.gs1ca.org• For mfr agents info:

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

• For mfr agents; Google key words; manufacturers agents Vancouver bc, or food brokers Vancouver bc

• For wholesalers; Google key words; wholesale (your product category ie clothing) Vancouver bc

• Retail association: www.shelfspace.ca

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Learning Links• Sales questions: www.gitomer.com• Sales and personal development: www.briantracy.com• Retail expertise: go to You Tube; search for - Paco

Underhill• 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 and personal development: www.ted.com• Pricing and margin definition:

http://en.wikipedia.org/wiki/Gross_marginGerry Spitzner retailSOS.ca 62

Books• Little Red Book of Selling; by Jeffrey

Gitomer• The Sales Bible; by Jeffrey Gitomer• Why We Buy; by Paco Underhill• Unmarketing: by Scott Stratten• www.unmarketing.com• Crush It!: by Gary Vaynerchuk• www.garyvaynerchuk.com

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