Small Business BC-Retail Distribution-Oct2010


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Seminar to help importers and suppliers move their product line to retail market.

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  • Thank all participants for coming-housekeeping details. Introduce self; 15 second intro; participants introduce themselves, their product, what they want to accomplish. Encourage discussion, ask questions-no “out of bounds”. Use your handout to write down your own “a-ha” ideas; I’ll send you a copy of presentation with my notes. Email me at; my contact info is at So, you wanna sell me your product? (resistance, skepticism, and cautious attitude) Have you ever encountered that? How did that make you feel? (ask audience for their feedback) What is the real purpose of a business? Every time I ask this question; the immediate answer I get back is “To make a profit”. But this is wrong. The real purpose of a business is to create and keep a customer. If a biz successfully creates and keeps a customer in a cost effective way, it will make a profit. If for any reason, a biz fails to attract or sustain a certain number of customers, it will experience losses. Too many losses will lead to the demise of the enterprize.
  • Here are the areas we will cover today. Thoughtstarters-mental warm up Purchasing methods-timing, requirements, what you need to have and know, measurements retailers use Distribution-the retail channels and the supply chain logistics Product-from your perspective and the retailers, pricing/merchandising Preparation- your approach, meeting with prospects, market research, and motivators Insights-How can I help you? Ask participants if there is anything they would like me to cover.
  • Today, I want to help you with some insight to prepare for creating and keeping your customer . A question for you to consider; “How do I become the preferred supplier of what I sell?”. Think customers for life. The sales & marketing plan is a section of your overall biz plan; explains how you're going to create customers to buy your product/service. It’s a tactical plan that puts words to the numbers in your overall biz plan. Create a “KILLER” sales&marketing plan to clearly and concisely outline your long term vision and guide your daily, weekly and monthly activities. The marketing plan includes sections detailing: your Products/Services; Pricing Strategy; Sales/Distribution; Advertising & Promotions Plan. Begin developing your marketing plan by working through each of these sections, referring to the market research you completed in your overall business plan.
  • Before we get started here is the language of retail...a few basic acronyms and frequently used jargon; not an all inclusive list by any means but these are used a lot. POS is the technology used at the cash register (till) to manage the sale; but it is also linked to the stores replenishment systems. POP is the stuff hanging on shelves such as coupons, shelf danglers and shelf talkers; ceiling and window signs, or any instore promotional signage from MFR’s or corp marketing initiatives. WMS also known as Workforce Management System SKU is often referred to as “skew”. MOM’s are basically case packs or inner case packs. The minimum order requirement for a sku.
  • CPG; term often used in the grocery/drug store channel to describe Branded items, but not meat, vegetables or Prescriptions. IND; those retailers that can make buying and mix decisions at store level UPC; go to for info; sometimes referred to as bar code PO; referred to as (pee-oh); the doc that most retailers use to place the order with a signature. GMROI; “Gem-roy” is a key product measurement at chain stores GMROI calculation is GP$/Avg. Inventory at cost during a period of time. Are there any acronyms you’ve heard that I’ve missed?
  • Familiar with the 4 P’s of marketing? (refer to slide) ...always consider the 4 P’s of your product. However there are actually 7 P’s I considered when looking at products. Here is my 7 P formula for marketing success. When I first got into retail, I was taught by one of the smartest buyers in the market that he did not care what people had to sell. What he wanted was a way to make sure the goods would move off the floor. Same is true today as it was 30 years ago. Don't sell the merchandise, sell the promotion. It’s all about moving product and how you are going to help the retailer move your product. Productivity is the measurement; POS is the tool we use to analyze data to optimize space and promotions. By analyzing data, we are able to get productivity from every square inch of shelfspace & display space. We need to understand how and why our customers shop with us. From the retailers perspective; Profit-unities — how is stocking this product going to generate (incremental) new! profit for the retailer? And then repeat; the replenishment and customer sale; over and over? Repeat sales is where the profit is.
  • Really...who is your customer? The consumer is your retailer's customer, the retailer is your customer - If you frame your premise this way, you'll always be on the safe side. While your consumer data and localized insights are important, retailers don't appreciate suppliers who make assumptions about THEIR customers; customers that they have researched and gathered an unprecedented amount of data from. On the other hand, in my experience many suppliers are clueless about their initiatives, hot buttons and visions for their total brand (in-store environment, themes, private and proprietary brand programs, web-to-store tie-ins, etc.). Start with the end in mind to help focus efforts and keep motivation high. For your Sales & Marketing Plan work backwards from your customers needs.
  • Who are your prospects more likely to believe; themselves or you? Who is better at closing the sale; the prospect or you? Your prospective customer wants to buy. The question is whether its from you or someone else who establishes trust by ‘dating’ them, developing a relationship and helping them get ready to buy. Beware the myth of “closing the sale” - Most buying decisions aren't made at the selling table so your goal is to make it easy for your buyer or prospect to jog his/her memory when decision-making time does come and to arm them with insights and information that will make your case when the actual first meeting is a distant memory.
  • Have you ever had... (refer to slide). Show of hands Every retail buyer has had this feeling too . I usually get this feeling after I felt I’ve been sold The successful approach is not to appear too “salesy”. Show and demonstrate value to overcome the resistance, scepticism and cautious attitude. Collaborative & trust is worth more than anything else 7. People don’t like to be sold... but they love to buy ; The trademark and mantra of America’s No. 1 Sales Authority, Jeffrey Gitomer
  • Familiar with the phrase USP or unique selling proposition? Forget today's world rather you MUST show your unique VALUE proposition. Telling ain’t selling; USP=probe, present, overcome objections, close. I mean what’s the big picture of your sales presentation? What’s the content and are you engaging enough to be different and compelling. In order to engage your prospect or your probable purchaser or even your customer, there must be some form of interest or perceived value on their part. If there’s no interest or perceived value, there’s no engagement. The secret is to tell stories, paint pictures and ask questions to establish what benefit you and your product offer. Learn to listen; don’t focus so much on you and your message. Put that further down on your ‘Ta Do List’. Focus first on your customers. Hear what they are saying; see what they are up to. Once you’ve been able to connect, and figure them out, then see how you can help them. Stop ‘selling’ and help your customers buy.
  • The focus on value is not going to go away. The financial crisis changed this forever. Your job, as an engaging person and a value-driven salesperson, is to make... (refer to slide) Focus on making a difference, not getting a sale. This approach will trump every ‘system’ of selling ever created. Your customer is thinking... "Why me?" (Why is it suitable for me to consider it? How does it help me achieve my objectives? Why would it hamper me to ignore it? etc.), "Why my category?" (What financial, marketing, sales, etc. need does it address?), and "Why my shopper?" (Does it bring new shoppers to the category? Does it create a more profitable sale? Is it an incremental sale? etc.). Remember while you are qualifying them; they are qualifying you.
  • Your customer (buyer) wants to know what’s in this for me? These are valuable ideas to articulate and ask questions about. Practice this and get great at it to position yourself as a trusted advisor. Today, in the digital age, retailers don’t want people telling them what they want or need. They’ve already gone online (i.e. Google) and informed themselves to find companies on their own to verify services before committing their scarce purchasing dollars. Yet, buyers want to do business; but with people they trust. When your prospect views you as a trusted resource, rather than a self-serving sales person the resistance drops. A great resource for this approach is; Jeffery Gitomer’s Little Red Book of Selling or his earlier book The Sales Bible. It will help you with formulating valuable open-ended questions that engage conversation to help your prospect rather than pushing for the sale at all costs.
  • Who do you want to approach? (focus your approach). The dominant relationship at chain retail is with brand suppliers. The dominant relationship at IND is with independent suppliers and wholesalers. Today, virtually all the chain retailers rarely consider a product that has not been tested and proven in a local market small retailer. All chain retailers practice some form of Category Management and it’s tough to crack the ‘line up’; so you ought to have a market demand product with proven sales history. IND’s tend to look for new items at smaller wholesalers that deal with IND only. IND’s also prefer showrooms or show mart buying.
  • (refer to slide) and briefly comment on each point Mis-picks are not getting what was ordered. Poor paperwork includes; statements, invoices and receiving docs (packing slips) Don’t underestimate this. Comment on the hassle it is to waste staff time on poor paperwork.
  • Neither IND or chain want unsolicited store calls or contact without an appointment. Cold calls have a very low percentage success rate; they do work, however may not be the best use of your time or the retailers. Regardless; they are usually an unwanted interruption in my day. Weak approaches to retailers include examples like: “Could I have a few minutes of your time?” and “Deal with me; I can save you some money” These are weak; because I’m busy and I’m here to make a profit so help me make some money. Talk profit and productivity -NOT SAVING MONEY- talk ideas and opportunities -NOT A CHANCE TO TELL THEM WHAT YOU WANT TO DO- they want friendly, they want help, they want answers, they want promotion, productivity and profits. Find out who the buyer (decision maker) is and ask the question “ Is this something you might be interested in?” If they say yes; then ask for an appointment; if they say no then do some market research with them to find where your consumers go to purchase your product category. Another technique; ask for an informational interview Disappearing after the sale kills your credibility and trusted resource status; follow up frequently, but don’t be a pest.
  • Will the product turnover ; can it be replenished quickly and reliably. This is a key objective on every new sku... How often can I repeat the process; therein is the resulting profitability of the sku for the retailer. The repeat sale. No sales or repeat sales to my customers=no profit; no profit =no buy again. Turnover is a key measurement and is defined as Cost Of Good’s (COG’s) SOLD divided by Avg. inventory at cost during a specific period of time. I.e. month, quarter, year.
  • Why they buy...To meet leading trends i.e. ‘green’, the trend to health and wellness, simple and easy to use, local products, imported products and luxurious self indulgence. Present ideas on how the consumer benefits. I need to make my store interesting to shop. This will keep my customers in the store longer and increases my average sale per customer. Average sale per customer is a key measurement; sales(by department)divided by # of transactions. A major reason that prospects do not buy is because they don’t fully understand what you are selling and how they can use or benefit from it. Use “educational selling”. Show the customer, tell the customer (explain features and benefits), ask the customer (ask questions and invite feedback), learn your prospects needs. They will figure it out from there.
  • What can I learn or do that will help my business do better, make more money, achieve more profit and be scalable? Scalable from the perspective of repeatable growing biz. Customer profitability & ROI=Will I make money? How much will it cost me to serve my customer to sell your product. The investment I make in the inventory and the length of time it takes for me to get my money back with a profit. Can I make money (on your item) with little time and effort of my resources? I.e. staff cost. The least effort required by me is the best productivity for my business. Notice there is no lost sleep over paying suppliers
  • Do we really need that… is my assessment of my investment of cash and human resources and my RISK. In retail; the popular myth is that Buyers are never right. So most of the time they are more cautious or sceptical especially with new products. Inventory is one of the most controllable assets in the business. Constantly scrutinized and measured. Inventory mgmt is generally the main focus of all retailers.
  • It’s easy to turn cash into inventory...the challenge is to turn inventory into cash. Productively and Profitably. Retail merchandising saying; stack it high and... (refer to slide). Comment on turns. Inv Mgmt; retailers learned the hard way after Xmas 2008 it’s better to delay ordering until demand is more apparent and stock items that are still appealing if left on display racks and shelves until the next year. Right now; Retailers just simply want to buy less more often. If you can solve the challenge of buying less more often; you will differentiate yourself. Highlight this as value.
  • These are the logistics and supply chain channels ; or methods of getting your product to the retailers door. (refer to slide) Explain “self distributors” Consider and decide your supply chain logistics and what method you will use. What is the cost to you? However decide your logistics after you’ve decided your target customer. Who exactly is your ideal customer? Another way to ask this question is, who is the customer and why will they buy from you? Why does he or she buy? Pick your customer carefully; i.e. WalMart, RCSS, Costco-do you really want to be there? Why?
  • These are retail industry sub-categories; your target customers. Examples The Bay, Sears, Zellers, Wal-Mart, Costco, Home Depot, The Brick Micheals, Indigo Books &Music, and Dollar Stores The Shopping network; E-bay; Amazon
  • Safeway, Save-On Foods; London Drugs, Shoppers Chains i.e.. Future Shop, Starbucks, Cdn Tire, SDM; explain the difference between chain and banner IND’s; Pharmasave, Home Hardware are banners. C-store; ie. 7-11, Macs, Town Pantry, On the Run, Petro Canada; all serviced by the same wholesaler; Core-Mark Waves Coffee, IRLY Building Centres, Peoples Drug Mart(even though a banner; they are ‘pure’ IND), Gerry’s Gifts, (your name) Toy’s etc. etc. The point here is; whether you choose Chain or IND, there are potentially lots of retailers to focus on within categories. Pick one channel and work it.
  • Will the box and/or product scan? (refer to slide) Can it stand up to wear and tear? Being dropped. Strong box and quality of cardboard? Comment on concealed damages. (hassle) Retailers tend to avoid large case packs on new items. Does the large case pack have inner packs or shrink wrapped smaller MOM’s? A smaller MOM might help you overcome objections to larger quantity master case packs and an easier sell for trial on the first purchase. Which is value to the buyer.
  • They don’t trust you if they don’t know you. Retailers need to have confidence in you. They see you as an investment of their money and time. Why would I switch from my current supplier to buy from you? Often a sale isn’t made because they don’t have a pressing enough reason to switch from their current supplier to the new product or service. The position you hold in your customers mind determines all reactions and interactions with you. Make me feel safe you will survive. Positioning refers to the way your customers think and talk about you when you are not there. Your position determines whether or not your customer buys; and whether they buy from you again; and whether they refer you to others.
  • Buying is a hard job especially at chain retail. For category managers to know their category inside and out takes time. How can a chain buyer possibly know what's hot or what their customer wants when they are in a cubicle all day answering calls from desperate vendors? They tend not to get out into their stores. Many IND’s tend to work “in” their business rather than “on” their business. They don’t have time to research trends. Common to both; The vendor who helps them with this clearly has the inside track to the start of a valued biz relationship . Make me feel special; help me!
  • You should be able to tell me this when we meet. What makes it sell? Is it the merchandising, the concept of the product, the retail price or what ???? What problem does it solve for my customers? What does it ultimately help my customers achieve? Is there a market match? Being unlike anything else on my shelf is not enough. Being different alone; doesn't equal desirable; and desire is what moves the customer. That means that people want it and need it and can use it and can afford it and are willing to buy it; NOW.
  • You need to know what it is about my customers that will make your product sell. The fact that you sell well somewhere else doesn’t mean the same will happen in my store with my customers. Show me. Help me promote it. I realize I have a big piece of the puzzle too. Find out or I have to tell you what my company's objectives are, what we use as internal measures, how we benchmark success, and how we see ourselves positioned in our market. Ask me.
  • I need to know your Advertising and promotions plan. I expect Product demonstrations; Merchandising ideas and instore support, samples; so my staff and I can try it too. Will you use price to drive trial or will you plan product demos? Will you have instore POP materials, will you use a web site or will you Tweet everyone in my market? What is your plan to ensure your product will survive in this competitive environment? Develop a habit of thinking in terms of promotion all the time. Promotion includes all the ways you tell your customers and consumers about your products and how you market them . I don't have these answers for your product, you do. Or you should. I don’t want to have to create a market for your product. And I don’t want to babysit your item.
  • Your supply chain to the MFR. becomes part of my supply chain and I care what it is. If this product goes on a “run” or a “heater” can you supply? Speed to market is just as important, if not more important than the shelf price or the cost of an item. Productivity, i.e. Turnover + Replenish=Profit for me.
  • There is a cost for using an agent, broker or wholesaler sales team. Called a Professional Agent or Brokers fee, could be a royalty or % of sales. However since cold calling has a very low success percentage; the cost may be worth it for you since they have the connections and can get referrals that will help you engineer an initial success story or testimonial. Get a broker who really understands your biz. Wholesalers upcharge; typically a % on your cost. Some wholesalers have their own sales dept. that you may be able to “tap into” for representation.
  • Gain an understanding of how your product fills a needed void in the assortment or mix (in terms of category, price, whatever) rather than duplicating existing content. A question for your market analysis; What other products are available to the same consumer that you’re going after and how is your product superior in a meaningful way, to the other product or service? Edit your assortment; Don't present merchandise to a buyer that is completely out of sync with their company 's direction or target market. The buyer is dealing with limited shelf space, open to buy budgets, limited cash and the ability to test new products. Make your presentation as concise and focused as possible, instead of trying to show "everything under the sun”. Also don’t show everything you have at once.
  • There are no sales without objections. Objections indicate interest. Objections are signposts that lead you step-by-step toward closing the sale. The fact is, if there are no objections, there is no interest. If there is no interest, there will be no sale. Even the best trained sales people have found themselves unprepared for today’s objections. And if you’re not ready your sales may be in jeopardy. Interpret it as a question. Learn how to develop an approach to every common objection you will encounter in today’s reality; get them out early in your contact with prospects; then work on ways to help your buyer overcome them; educate yourself to sharpen your skills. Invest some sales training dollars in yourself. Take a sales course. The more time you take to thoroughly understand your prospective customer and your prospective customer's real situation, the more likely you will be in a position to make a sale at the critical moment. Ask me. Help me make money; frame your sale this way. Prepare thoroughly prior to selling, prior to the presentation, and prior to closing. Think everything through in advance. And leave nothing to chance. Remember, it's the details that make the difference. The salesperson who has taken the greatest amount of time to acquaint himself or herself with the most specific needs of the customer is the one who builds the highest level of trust and the best sales relationship. Thorough preparation is the essential precondition for successful selling. Avoid the trap of overselling; don’t over do it. Watch for buying signals; “Don’t push on an open door.”
  • The key to business success has always been the same; find a need and fill it. Your business goal is to find out what people really need and WANT ( what they desire ) , and then give it to them better and faster than anyone else. A need alone does not = a market. Desire does. If you have an item that is both a need and market; you have a “pull” product. Magic combo!
  • Retailers assess if you have a push or pull product? Am I going to have to help you push the product in my market? Or will there be demand (a pull product)? Is it a long term or short term product?(length of life cycle). Risk. What if it doesn’t sell or stops selling and I’m stuck with it?
  • All buyers do things for their own reasons, not the sellers' reasons. When you figure out what the buyer wants and then provide it for them, you don’t have to sell. They buy.
  • What does different mean? Uniqueness means individuality, exclusivity, distinctiveness combined. What does the product do? = value; my staff need to understand the value proposition; often they become the seller of your product with my customers; make it simple.
  • Will this item make my store more appealing, keep my customers in the store longer, create an impulse purchase and an incremental sale. I’m looking for new mix to increase the average sale and add profitability to the average basket. New items are the key to bigger baskets. Average basket = Average sale and is a key metric; Avg. Sale= total sales/customer count @ the till (not traffic rather transactions) Will the retail price point of this item be in the range of what my customers will spend?
  • The retail pricing approach depends on the product and the buyer. Can I sell this in my market; at the retail I need; to make money? When looking to judge the selling price first ; the thinking is “I need a product that will fit into this price point and category”; i.e. under ten dollars; under twenty and so on. I.e. Dollar stores. Examine your product cost mix carefully; in addition to the normal “cost of goods” you must include all your expenses incurred in delivering your product to the retailers door. That’s my cost and I set my retail from that. Including R&D, promo, sales & marketing costs, installation, CS, product service, returns, and so on. So, You gotta know your numbers! (Emphasize this)
  • This slide is from your (supplier) perspective. Negotiate the price you deserve; I have more respect for someone who says no; “can’t do it at that price”. Make the other negotiator work for their concessions. Saying yes right away only leads to disaster. Say no at first and then perhaps later you can say yes. The buyer will be more satisfied simply because you had the courage to say no. Pricing deserves attention; in itself is a combo of art and science and starts with knowing your competition. IMPORTS -Is your product vulnerable to currency fluctuations? What are the Import tariffs? HST commentary. Understand the taxes and impact if any on your cost price and the shelf retail. Wholesale upcharges vary and are part of the landed cost of goods from a retailers perspective. Brokers will ask for a royalty or a % of sales .
  • Pricing from a retailers perspective. Since the retail shelf price is a prime consideration. Know your basic retail math and make certain you and the retailer are talking the same language. Mark up is % of profit on selling price and mark on is % of profit on cost i.e. wholesaler upcharges GM sometimes referred to as GP Dollars Talk GP Dollars; nothing else matters. I take this to the bank not percentages. 40% mark up is different than 40% mark on. Use the 1 dollar cost example. $1.00 markup or GM = selling price of 1.67; same one dollar markon is $1.40 selling price. % profit on selling price; means the cost is 60 % of the selling price; 1.00 divided by .60 =1.66666 equals 40% markup. % profit on cost; means the selling price is 40% of the cost (1.00 x .40) +1=1.40.
  • Understanding the retail merchandising (slide) environment is critical. Theft & Loss prevention. Chain retailers might ask for anti theft tags to be installed inside the packaging at your cost. Having a clear, well defined packaging concept with a visible UPC is crucial. If the UPC is added after (as a sticker) it must stay on the package. Off shelf areas retailers use for merchandising new mix include; ends, profit panels, clip strips, floor pre-packs and spinner racks. Retailers like the idea of a customized package that suits their consumers and is displayed properly. From a product packaging standpoint, be prepared to show exactly how the product engages the consumer in making a purchasing decision.
  • Chains more than IND practice sophisticated category management ; they will require this stuff Chain merchandising is compliant to POG’S. Explain POG’s. Demonstrate how the retail footprint for your product packaging is effective and worthy of shelf space. i.e. 12 packs of soda pop, books, Above all, be flexible. Even if you have put a lot of thought and effort into creating the right packaging, the buyer may hate it. Don’t take it personal; it’s the consumer reaction to packaging that counts. Show how your packaging has the right "benefits" for a prospective consumer. I.e. wine boxes, resealable confection products, cling wrap refills.
  • No hurry to pay you. Consider providing incentives. Like additional dating on the initial purchase. Prompt payment discount ; or “cash discount” incentive for early payment. I.e. 2% 10 days, net 30. Some IND retailers like to pay by credit card ; you need to consider your cost (merchant fees are a % of your sale) What is your risk tolerance? What if the retailer says your product isn’t selling and tells you to come pick it up.
  • Chain retailers will bleed you dry for money to place your product on their shelves/sales floor. Real Estate. Chain retailers will make changes such as shelf position and inventory decisions without telling you Get your product to my door at your cost. I expect you to take care of damages and returns either by credit note or replacement. No matter how good your quality control processes are, you can’t fully avoid the threat of a product recall . The key to surviving the crisis is to create a recall management plan in place before the worst happens . Having a plan for recall is critical especially with food products. If there is a problem a recall situation could not only sink you but cost you dearly. I.e. reputation, relationship etc. Most chain retailers will require you to sign a vendor agreement.
  • These are the things I thought about when seeking new mix. They may seem simple however that is what makes this approach so effective. Observing (mine, my competition and all) consumers beats listening to them. Do your homework and make sure you understand your buyers' needs and objectives. What are they trying to solve or work on? Store traffic, price competitiveness, market basket growth, assortment, private brand growth, etc.... Once you know this, present your product as a solution to those challenges. When presenting, don't spend all your time on how great your company and products are. Spend your time presenting a solution that solves your buyer's problem. This is tougher than just talking about yourself, but the rewards will be worth the extra work.
  • Every industry has some aspect of it that is going right. I.e. Car companies might not be making as much money as they’d like, but car REPAIR companies are doing well. Once you know what aspect of your industry or product IS making money, you can get yourself ready to learn more/train more/ do more in that area. Go where retailers are-Where is that? Examples; chamber meetings, local BIA’s, association gatherings like Shelfspace, SBBC, buying shows and conferences; local “meetups”. Contact successful people who have made the sale; where do your retailers network; find out who knows who. Seasonal timing...i.e. Xmas, summer, spring type products and the lead time required to get product to your customer in time for merchandising.
  • Google for wholesale distributors names , contacts and locations. Most have the ability to ship destination points outside of the lower mainland. Use SBBC resources. Who are you more likely to buy from? A total stranger who shows up at your door or phones you – or someone recommended by a friend? That’s the power of referrals. Provide value; The value in a short term incentive i.e. as seen on TV; shopping network; the next 10 days I’m offering... Consider offering exclusivity in a certain area or postal code for a period of time . Carefully consider consignment arrangements . Not advised. It devalues your product if you don’t invoice. With POS you get paid only what they sell not including theft.
  • If you decide to become the retailer ; then start with Subscribe to newsletters for your personal improvement, ideas and current trends; crafting your value proposition. Invest in yourself; at least 3% of your income back into yourself. Some of my fav’s are; Brian Tracy, Gitomer, Donald Cooper, Springwise; Rain Today; Retailwire and, Google these. Webinars and Free podcasts available at these sites. Stay current and learn how to use all the new social media technologies as part of your marketing strategy; using twitter, facebook, tumblr, your personal blog, and you tube, etc. To get your product noticed out there. Online promos are most successful if consumers felt they were given exclusive offers. Update on emerging; The latest is called Cloud Marketing; is traditional marketing + Software as a Service; customized phone apps with exclusive offers. Scan the bar code instore for instant info and exclusive offers. Re: Mobile retailing. Coupons can be downloaded to your phone. Groupon.
  • Stumbling blocks...for importers. Why do they need you? In fact some chains have people living in China for example and that’s all they do is seek out new mix. They could use your offshore contact to cut you out by going around you. Be careful the chains can be or are cutthroat. They won’t loose a minute of sleep cutting you out.
  • Listing a new supplier is a hassle for retailers There are over 50K products in the average grocery store & 25K products in the average drug store. Sku rationalization means sku reduction; it’s a shelf management strategy. To make space for core mix with high turns; slower moving sku’s are removed or assortment is reduced. Even if they are profitable. Products need to turn at the benchmark I set for my business. And they need to fit with how my business is positioned in my ever changing marketplace. In the process of rationalization many retailers listened to consultants that suggested the elimination of specialty, niche and destination items. This was not a good strategy for the medium and long term and the end result is that almost all stores are looking exactly alike with very little points of differentiation. Some retailers have realized they’ve gone too far. So now they are looking for “local”, unique or imported profitable mix to add to their mix assortments. Which leads to a stepping stone...
  • Large retailers are always looking for unique niche products because they like to act like small retailers Small retail seems to have the advantage right now ; the big guys are playing it safe on product assortment by rationalizing sku’s. For new mix; both types have challenges; Large retail have big overheads and bureaucracies; small retail have access to capital issues. The opportunity formula and what is being promoted for both broad types of retail is focusing on unique localized or imported product. Large or small, chain or IND, the opportunity exists for the retailer that has exciting product and delivers a real customer focused experience of new and localized mix. This is value. I suggest; small IND first to build local market; then go to larger retail who have room in POG’s and budgets for imported and local mix.
  • To say it another way; there are leaders and followers ; the leading retailers and buyers will be cautiously optimistic but open to buy new mix or deal with new suppliers; the followers will tend to wait and see. Find out who they are and get to the hunters first; the gatherers will be your market expansion opportunity. It is more difficult but the journey will be worth it.
  • There are four basic ‘currencies’ in all peoples lives that are motivators, which create desire and value. To the extent that you... Understand the retailers stress better than your competitors; then make it go away better than your competitors; And then communicate that powerful message effectively; will become their preferred supplier!
  • Consider the order of these motivating factors; This addresses the 4 currencies and shows me the value of doing business with you and your product So often, people assume that ‘price’ is the only way to compete but it is usually not the most important. When you understand that there are 4 currencies in peoples lives, there are 100’s of ways to compete. Position yourself in everything you say and do as the most credible and believable supplier of your product or service to your ideal customer. Then back that up with value up front; not “value added” after the sale. “ Value added” is nothing but a promotion. Give value first, don’t add it later.
  • Do you see the difficulty in the opportunity or the opportunity in the difficulty? There are stumbling blocks but no matter what… Retailers are always looking for new products to differentiate their mix, add ‘excitement’ to their stores and add profit to their average sale. Help them find the products and then help them “move” the inventory. This your opportunity.
  • Ask yourself ; now what or what now? Your outlook is a matter of your positive attitude ... And willingness to help. Be small, think big and get ready! Start a simple Sales&Marketing Plan as a blueprint. Who is your ideal CONSUMER ; Who is your ideal customer? What motivates them? Ask questions. Relationship selling is the core of all modern selling strategies, the relationship with your customer often becomes more important than the product or price. Focus on building a high quality trusted relationship with your customer by understanding their situation and treating them so well that they call you, buy again and refer you to others. Consider these steps first; Create your sales & marketing plan; (go to next slide) and then...
  • Determine how you will get your product to your customers door? What will it cost...can you make money? Otherwise what’s the point. Continuously evaluate and re-evaluate your value proposition so it keeps up with a quick changing world and stays real current. Think WIIFM…What’s in it for me? From all perspectives; for you, your retail customer and your consumer.
  • Thanks for coming. I hope I’ve helped you. Feedback is the breakfast of champions; please help me make this session better and take a moment to give me your feedback. ASK EVERYONE TO FILL OUT THEIR EVALUATIONS Please leave evaluations at the front desk. Your written comments are always appreciated either on the seminar evaluation or an endorsement on LinkedIn.
  • If you would like a copy of this presentation with my speakers notes; send me an email at All my contact info is at
  • Small Business BC-Retail Distribution-Oct2010

    1. 1. Retail Distribution move your product line to market Small Business BC Gerry Spitzner Contact info at: Website: Gerry Spitzner
    2. 2. Roadmap <ul><li>Thoughtstarters </li></ul><ul><li>Purchasing methods </li></ul><ul><li>Distribution </li></ul><ul><li>Product </li></ul><ul><li>Preparation </li></ul><ul><li>Insights </li></ul> Gerry Spitzner
    3. 3. Objectives <ul><li>How to approach retailers </li></ul><ul><li>Why and how they buy </li></ul><ul><li>Retail distribution channels </li></ul><ul><li>What buyers look for in a supplier </li></ul><ul><li>What buyers look for in a product </li></ul><ul><li>Your sales & marketing plan </li></ul> Gerry Spitzner
    4. 4. Acronyms <ul><li>POS= point of sale </li></ul><ul><li>POP= point of purchase </li></ul><ul><li>WMS= warehouse mgmt system </li></ul><ul><li>SKU= stock keeping unit </li></ul><ul><li>MOM= minimum order multiple </li></ul> Gerry Spitzner
    5. 5. Acronyms <ul><li>CPG= consumer package good </li></ul><ul><li>IND= independent retailer </li></ul><ul><li>UPC= universal product code </li></ul><ul><li>PO= purchase order </li></ul><ul><li>GMROI= gross margin return on investment </li></ul> Gerry Spitzner
    6. 6. Thought starters <ul><li>Product, price, place & position; </li></ul><ul><li>Consider promotion and productivity </li></ul><ul><li>“ Profit-unities” — how is this product going to generate incremental profit for me? </li></ul> Gerry Spitzner
    7. 7. Thought starters <ul><li>What’s the difference between your customers and your consumers? </li></ul> Gerry Spitzner
    8. 8. Thought starters <ul><li>How to sell or why retailers buy; which do you prefer to learn? </li></ul> Gerry Spitzner
    9. 9. Thought starters <ul><li>Ever had buyers remorse? </li></ul> Gerry Spitzner
    10. 10. Important insight #1 <ul><li>Show me the value; or I’ll show you the door. </li></ul> Gerry Spitzner
    11. 11. How to approach retailers <ul><li>Make your presentation in terms of the customer. </li></ul> Gerry Spitzner
    12. 12. How to approach retailers <ul><li>How they benefit, how they profit, and how they produce will provide value. </li></ul> Gerry Spitzner
    13. 13. How to approach retailers <ul><li>Decide first if you want to approach IND’s or chain retailers </li></ul> Gerry Spitzner
    14. 14. Things that annoy retailers <ul><li>Unsolicited faxes and emails </li></ul><ul><li>Damaged product & mis-picks </li></ul><ul><li>Invoice doesn’t match quoted price on purchase order </li></ul><ul><li>Poor paperwork </li></ul> Gerry Spitzner
    15. 15. Things that annoy retailers <ul><li>Cold calls </li></ul><ul><li>Weak approaches </li></ul><ul><li>Suppliers that disappear after the sale </li></ul> Gerry Spitzner
    16. 16. Why they buy <ul><li>Profit; to make money </li></ul><ul><li>Want to find something (new) that turns over at a price that will make them money </li></ul> Gerry Spitzner
    17. 17. Why they buy <ul><li>How can I keep customers in the store longer? </li></ul><ul><li>Look at products through the eyes of consumers </li></ul> Gerry Spitzner
    18. 18. What keeps retailers up at night <ul><li>Top line sales and cash flow </li></ul><ul><li>Customer traffic </li></ul><ul><li>Customer profitability </li></ul><ul><li>Staff productivity </li></ul><ul><li>Return on investment; ROI </li></ul> Gerry Spitzner
    19. 19. What keeps retailers up at night <ul><li>Do we really need that? </li></ul><ul><li>Inventory management is the main focus </li></ul> Gerry Spitzner
    20. 20. What keeps retailers up at night <ul><li>Inventory is the retail gamble </li></ul><ul><li>“ Stack it high and watch it fly” has turned to “stack it low, so its sure to go” </li></ul> Gerry Spitzner
    21. 21. Retail distribution channels <ul><li>Wholesalers </li></ul><ul><li>DSD; Direct Store Delivery </li></ul><ul><li>Chain; Self Distributors </li></ul> Gerry Spitzner
    22. 22. Retail distribution channels <ul><li>Department stores </li></ul><ul><li>Mass & Big Box </li></ul><ul><li>Specialty and Discount </li></ul><ul><li>Catalogue and Internet </li></ul> Gerry Spitzner
    23. 23. Retail distribution channels <ul><li>Grocery and drug stores </li></ul><ul><li>Chain and banner stores </li></ul><ul><li>Convenience stores </li></ul><ul><li>Independent stores </li></ul> Gerry Spitzner
    24. 24. In the distribution channel <ul><li>Is the product WMS friendly? </li></ul><ul><li>Case and product upc </li></ul><ul><li>Dealing with concealed damages </li></ul><ul><li>Case pack </li></ul> Gerry Spitzner
    25. 25. What buyers look for in suppliers <ul><li>What your biz background is </li></ul><ul><li>Financial means </li></ul><ul><li>Number of years in business </li></ul><ul><li>Geographical limitations </li></ul> Gerry Spitzner
    26. 26. What buyers look for in suppliers <ul><li>Trend watching; help me with what’s hot. </li></ul><ul><li>Tell me about something new or up and coming before telling anyone else. </li></ul> Gerry Spitzner
    27. 27. What buyers look for in suppliers <ul><li>Where else are you selling this product? </li></ul><ul><li>I need to know why your product will be wanted by my customers. </li></ul> Gerry Spitzner
    28. 28. What buyers look for in suppliers <ul><li>You need to know my customers. </li></ul><ul><li>I do. </li></ul> Gerry Spitzner
    29. 29. What buyers look for in suppliers <ul><li>I need to know how you are going to educate the customer about your product and get them to try it in my store. </li></ul> Gerry Spitzner
    30. 30. What buyers look for in suppliers <ul><li>Can you replenish quickly; do you have a solid supply chain? </li></ul> Gerry Spitzner
    31. 31. Retail reps <ul><li>Consider using a professional agent, broker or wholesaler </li></ul> Gerry Spitzner
    32. 32. What sellers ought to do <ul><li>Shop the store ahead of time </li></ul><ul><li>Understand the strategic positioning of the store </li></ul><ul><li>Edit your assortments </li></ul> Gerry Spitzner
    33. 33. What sellers ought to do <ul><li>Objections & roadblocks </li></ul><ul><li>Understand customers situation </li></ul><ul><li>Help me make money! </li></ul> Gerry Spitzner
    34. 34. What buyers look for in a product <ul><li>Is there a need or a market? </li></ul><ul><li>Or both? </li></ul> Gerry Spitzner
    35. 35. What buyers look for in a product <ul><li>Push or pull product? </li></ul><ul><li>Is your product future proof? </li></ul><ul><li>What is the life cycle of product? </li></ul> Gerry Spitzner
    36. 36. What buyers look for in a product <ul><li>Taste, health, ingredients, appearance, sustainability, preparation, packaging and customer value </li></ul> Gerry Spitzner
    37. 37. What buyers look for in a product <ul><li>Look for items that are different; not the same; uniqueness </li></ul><ul><li>Must be easily understood by store staff and consumers </li></ul> Gerry Spitzner
    38. 38. What buyers look for in a product <ul><li>Add interest and excitement to their stores with new products </li></ul><ul><li>What retail price can I get for this product? </li></ul> Gerry Spitzner
    39. 39. What buyers look for in a product <ul><li>Some look at product first; then see if they can carry the price </li></ul><ul><li>Others look at cost first; so they are judging the selling price and then a product to fit or match </li></ul> Gerry Spitzner
    40. 40. Pricing for retail <ul><li>Do not compromise on your price </li></ul><ul><li>Know your competition </li></ul><ul><li>Know your taxes </li></ul><ul><li>Wholesaler upcharges </li></ul><ul><li>Brokers fees </li></ul> Gerry Spitzner
    41. 41. Pricing for reta il <ul><li>Retail margins and retail pricing </li></ul><ul><li>Mark up and “mark on” </li></ul><ul><li>Gross margin percent; GP% </li></ul><ul><li>Gross margin dollars; GM$ </li></ul> Gerry Spitzner
    42. 42. How to deal with merchandising <ul><li>Tamper proof packaging </li></ul><ul><li>UPC code that stays on package </li></ul><ul><li>Display racks and trays </li></ul><ul><li>Display packages with a window </li></ul> Gerry Spitzner
    43. 43. How to deal with merchandising <ul><li>Plan-o-grams & compliance </li></ul><ul><li>Must fit on a shelf in the section or category it is merchandised in </li></ul><ul><li>Package size/dimensions </li></ul><ul><li>Photos </li></ul> Gerry Spitzner
    44. 44. Be Prepared to: <ul><li>Endure long receivable cycle </li></ul><ul><li>Provide dating </li></ul><ul><li>Provide cash discount </li></ul><ul><li>Payment by credit card </li></ul><ul><li>Even risk not being paid </li></ul> Gerry Spitzner
    45. 45. Be Prepared to: <ul><li>Provide a listing allowance </li></ul><ul><li>Prepaid freight; delivery to the retailers door </li></ul><ul><li>Clear up damages and returns </li></ul><ul><li>Have a plan for recall </li></ul><ul><li>Sign a vendor agreement </li></ul> Gerry Spitzner
    46. 46. Market research <ul><li>Seek Out Hidden Opportunities </li></ul><ul><li>Look Under Your Own Feet </li></ul><ul><li>Continually Scan the Radar of Opportunity </li></ul><ul><li>Find Something You Like and Believe In </li></ul> Gerry Spitzner
    47. 47. Market researc h <ul><li>Research what’s working </li></ul><ul><li>Go to where retailers are </li></ul><ul><li>The timing of your sale </li></ul> Gerry Spitzner
    48. 48. Consider <ul><li>Use a wholesaler that specializes in your type of product </li></ul><ul><li>Referrals are the way to go </li></ul><ul><li>Value in a short term incentive </li></ul> Gerry Spitzner
    49. 49. Consider <ul><li>Becoming the retailer & go online </li></ul><ul><li>Subscribe to newsletters </li></ul><ul><li>The use of business social media </li></ul><ul><li>Emerging cell phone apps for retail called “mobile retailing” </li></ul> Gerry Spitzner
    50. 50. Stumbling blocks <ul><li>Almost all national chain retailers have their own import department </li></ul> Gerry Spitzner
    51. 51. Stumbling blocks <ul><li>At the moment all retailers are focused on SKU rationalization and inventory management </li></ul> Gerry Spitzner
    52. 52. Stepping Stones <ul><li>Large retailers look for unique products; they like to act like small retailers </li></ul><ul><li>IND retailers look for unique products to differentiate and can act quicker than chain </li></ul> Gerry Spitzner
    53. 53. Stepping Stones <ul><li>Hunters and gatherers; </li></ul><ul><li>find the hunters </li></ul> Gerry Spitzner
    54. 54. Stepping Stones <ul><li>How can you?... </li></ul><ul><li>Help them make money </li></ul><ul><li>Save them time </li></ul><ul><li>Make them feel safe </li></ul><ul><li>Make them feel special </li></ul> Gerry Spitzner
    55. 55. Important insight #2 <ul><li>Confidence is the #1 factor in determining what and where retailers buy... </li></ul><ul><li>quality is #2, service is #3 </li></ul><ul><li>selection is #4 </li></ul><ul><li>and price is #5 </li></ul> Gerry Spitzner
    56. 56. The Opportunity <ul><li>Retailers look for products to differentiate their mix, add ‘excitement’ to their stores and make money. </li></ul><ul><li>They don’t have time to find them; this is your opportunity! </li></ul> Gerry Spitzner
    57. 57. What Now? <ul><li>Start a sales & marketing plan </li></ul><ul><li>Understand your target market and it’s buying motivators. Who, where and why? </li></ul> Gerry Spitzner
    58. 58. What Now? <ul><li>Determine your target and method of distribution. How much will it cost you? </li></ul><ul><li>Define your unique value proposition & keep it current. </li></ul><ul><li>What’s in it for me? (WIIFM) </li></ul> Gerry Spitzner
    59. 59. Thanks! <ul><li>Your evaluation is appreciated </li></ul><ul><li>On LinkedIn? Me too... </li></ul><ul><li>Connect with me; endorsements are always welcomed </li></ul>Gerry Spitzner
    60. 60. Thanks! <ul><li>Want a copy of this presentation with my speakers notes? </li></ul><ul><li>E-mail me; [email_address] </li></ul><ul><li>Contact info; </li></ul> Gerry Spitzner