small business bc-retail distribution-09may2012

Retail Distribution

move your product line to market

Small Business BCGerry Spitzner | retailSOS.ca

Find me: www.retailsos.telMay 9, 2012

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ThoughtstartersPurchasing methodsDistributionProductPreparation

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Roadmap

Insights for creating and keeping your customer

Your sales & marketing planYour questionsHow can I be of service to you, right now?

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My Goal for you today is...

How to approach retailersWhy and how they buyRetail distribution channelsWhat buyers look for in a supplier

What buyers look for in a product

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Objectives

AR = Accounts ReceivablePOS= point of salePOP= point of purchaseWMS= warehouse mgmt systemSKU= stock keeping unitMOM= minimum order multipleCPG= consumer package good

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Acronyms

IND= independent retailerUPC= universal product codeQR= quick response codePO= purchase orderGMROI= Gross Margin Return On Investment

CRM = Customer Relationship Management

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Acronyms

DSD = Direct Store DistributionEDI = Electronic Data Interchange

EDLP = Everyday Low PricingOTB = Open-to-BuyPOG  = Plan-o-gramRDA = Retail Display Allowance

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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”

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.

◦Definition of Value: is a function of the bundle of perceived

benefits offered at a given price.

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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

Help me move it; and promote it.

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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

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Crazy busy buyers

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.

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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 initial 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.

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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

I need to know your Advertising and promotions plan.

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 retailSOS.ca | Gerry Spitzner 33

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...◦What is your cost to ship to your

customer?

WholesalersDSD; (Direct Store Delivery)Chain; Self Distributors

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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 packretailSOS.ca | Gerry Spitzner 40

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 retailSOS.ca | Gerry Spitzner 41

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.◦all buyers do things for their own reasons,

figure out what the buyer wants and then provide it for them

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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$retailSOS.ca | Gerry Spitzner 52

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 mixretailSOS.ca | Gerry Spitzner 53

How to deal with merchandising

Plan-o-grams & compliance

Package size/dimensionsPhotosMust fit on a shelf in the section or category it is merchandised inretailSOS.ca | Gerry Spitzner 54

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 paidretailSOS.ca | Gerry Spitzner 56

Be Prepared to:

Provide a listing allowancePrepay freight; delivery to door

Clear up damages and returns

Have a plan for recallSign a vendor agreementretailSOS.ca | Gerry Spitzner 57

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 retailSOS.ca | Gerry Spitzner 59

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: retailSOS.ca Email: gerry@retailsos.ca Online Biz Card: gerryspitzner.tel Online 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*retailSOS.ca | Gerry Spitzner 72

Resource Links

For QR codes: www.qrstuff.com

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

Retail associations: Shelfspace www.shelfspace.ca or Retail Council of Canada: www.retailcouncil.org

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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