Small Business BC-retail distribution-26jan2012

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

Gerry SpitznerretailSOS.ca 3

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


Objectives

POS= point of salePOP= point of purchaseWMS= warehouse mgmt system

SKU= stock keeping unitMOM= minimum order multiple

CPG= consumer package good


Acronyms

IND= independent retailerUPC= universal product codeQR= quick response codePO= purchase orderGMROI= gross margin return on investment


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.


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?


Thought starters

What’s the difference between your customers

and your consumers ?


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?


Thought starters

Ever had buyers remorse?


Thought starters

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


Important insight #1

How to approach retailers

Do you sometimes wish you could just read your buyer’s mind?


Top line sales and cash flow

Customer trafficCustomer profitabilityStaff productivityReturn on investment; ROI


What are retailers thinking about?

Do we really need that?



Inventory is the retail gamble

That’s why it’s the main focus of all retailers



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


Crazy busy buyers

Most of their options seem like near clones of one another

They suffer no fools gladly


Crazy busy buyers

Keep things simpleDemonstrate strong biz case

Minimize the riskPrepare, prepare, prepare


Successful Selling to Crazy-Busy People

Make your presentation in terms of the customer.



How they benefit, how they profit, and how they

produce will provide value.



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.


Profit; make money or save time

Want to find something (new) that turns over at a price that will make them money


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


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.


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.



You need to know my customers.

I do. Ask me.



How you are going to educate the customer about your product and get them to try it in my store?



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.



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.


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.


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.


3 Main supply chain channels...

WholesalersDSD; (Direct Store Delivery)Chain; Self Distributors

◦ What is your cost to ship to your customer?


Retail logistics channels

Department storesMass & Big BoxSpecialty & DiscountCatalogue & InternetGrocery & Drug StoresConvenience stores


Retail distribution channels

Within each category; 3 types

Chain Banner storesIndependent stores


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...


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”?


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



Push or pull product?Is your product future proof?

What is the life cycle of product?



Taste, health, ingredients, appearance, sustainability, preparation, packaging, customer value...etc etc.



Look for items that are different; not the same; uniqueness

Must be easily understood by store staff and consumers



Add interest and excitement to their stores with new products

What retail price can I get for this 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



Pricing and Merchandising

Setting the right price for your products and services requires balancing merchandising, pricing, placement, packaging, and promotion.


Do not compromise on your price

Know your competition Know your taxesWholesaler upcharges Brokers feesInclude all your costs


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.


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


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?


Consider

What now?Now what or what now? …

Your outlook is a matter of your positive attitude and willingness to help.


Retailers need new mix to create, engage and keep customers.

Increase impulse sales and profit


Stepping Stones

Chain retailers like to act like small retailers

IND retailers look for unique products not in chains


Stepping Stones

How can you?...Help them make moneySave them timeMake them feel safeMake them feel special


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


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!


The Opportunity

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

Then determine your exact retail target and method of distribution.


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?


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


What Now?

Your evaluation is appreciated

Want a copy of this presentation with my speakers notes?

E-mail me; [email protected]


Thanks!

Follow Twitter: @passion4retail Connect LinkedIn: Gerry Spitzner Web/Blog: retailsos.ca Email: [email protected] Digital Biz Card: gerryspitzner.tel Digital Biz Card: retailsos.tel


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

http://www.gs1ca.org/

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



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


Resource Links

http://www.qrstuff.com/

http://www.shelfspace.ca/

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


Learning Links

http://www.gitomer.com/

http://www.briantracy.com/

http://www.donaldcooper.com/

http://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


Learning Links

http://www.raintoday.com/

http://www.trendhunter.com/

http://www.springwise.com/

http://www.trendwatching.com/

http://en.wikipedia.org/wiki/Gross_margin

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


Books

http://www.gitomer.com/

http://www.bedifferentorbedead.com/

http://www.unmarketing.com/

http://www.guykawasaki.com/enchantment/