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Small Business BC-retail distribution-26 nov2012
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Small Business BC-retail distribution-26 nov2012

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Have you developed a product that you are ready to distribute to retail market but not sure where to start? …

Have you developed a product that you are ready to distribute to retail market but not sure where to start?
Learning Objectives:
• Discover how to structure sales calls to retailers, with the best results.
• Understand the methods retailers use to decide what products they will buy for their stores.
• Find out the common challenges retailers face; how and why they buy.
• Uncover the cardinal rules you should follow when making your first sales pitch to a prospective client
• Learn the terminology, technology and measurements retailers use to decide which products will make the cut.
• Find out how merchandising and pricing works in both chain and independent retailers.
• Discover the logistics and supply chain systems of getting products to the retailers’ door.

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  • 1. Small Business BC Gerry Spitzner | retailSOS.ca Find me: www.retailSOS.tel November 26, 2012
  • 2.  Thoughtstarters Purchasing methods Distribution Product Preparation retailSOS.ca | Gerry Spitzner 2
  • 3.  Insights for creating, engaging and keeping your customer Inputs and considerations to your business plan Your questions Anything you would like to cover? retailSOS.ca | Gerry Spitzner 3
  • 4.  How to approach retailers Why and how they buy What buyers look for in suppliers What buyers look for in a product Pricing and merchandising Retail distribution channels Your sales and marketing plan retailSOS.ca | Gerry Spitzner 4
  • 5.  POS = point of sale POP = point of purchase WMS = warehouse mgmt system SKU = stock keeping unit MOM = minimum order multiple CPG = consumer package good retailSOS.ca | Gerry Spitzner 5
  • 6.  IND = independent retailer UPC = universal product code QR = quick response code PO = purchase order GMROI = Gross Margin Return On Investment CRM = Customer Relationship Management retailSOS.ca | Gerry Spitzner 6
  • 7.  EDI = Electronic Data Interchange EFT = Electronic Funds Transfer EDLP = Everyday Low Pricing OTB = Open-to-Buy POG = Plan-o-gram RDA = Retail Display Allowance retailSOS.ca | Gerry Spitzner 7
  • 8. This packet of thought starters isjust that; a starting point. Let yourmind wander and consider what youcan do to help retailers minimizerisks and maximize profitability. retailSOS.ca | Gerry Spitzner 8
  • 9.  The 4 P’s of marketing ◦ Product, Price, Place and Position 7 P formula for marketing success ◦ Promotion, Productivity and “Profit-unities” How will this product generate incremental sales? And repeat. retailSOS.ca | Gerry Spitzner 9
  • 10.  What’s the difference between your customers and your consumers ? retailSOS.ca | Gerry Spitzner 10
  • 11.  How to sell or why retailers buy; which do you prefer to learn? Whoare people more likely to believe; themselves or you? Who is better at closing the sale; the potential retail customer or you? retailSOS.ca | Gerry Spitzner 11
  • 12.  Have you ever had buyers remorse? retailSOS.ca | Gerry Spitzner 12
  • 13.  Show me the value; or I’ll show you the door. What is value in the 21st century? ◦ A function of the bundle of perceived benefits offered at a given price. ◦ Sell the applied benefits of the benefit you and your product offer. retailSOS.ca | Gerry Spitzner 13
  • 14. Do you sometimes wish you couldjust read your buyer’s mind?Ask; don’t tell.Stop ‘selling’ and help yourcustomers buy. retailSOS.ca | Gerry Spitzner 14
  • 15.  Top line sales and cash flow Customer traffic Customer profitability Staff productivity Return on investment; ROI retailSOS.ca | Gerry Spitzner 15
  • 16.  Do we really need that? ◦ does your product fit my current market mix, ◦ do I have the space to merchandise it, ◦ do I have the cash flow (money) to pay for it? retailSOS.ca | Gerry Spitzner 16
  • 17.  Inventory is the retail gamble It’s easy to turn cash into inventory...the challenge is to turn inventory into cash. retailSOS.ca | Gerry Spitzner 17
  • 18.  Make yourself irresistible to crazy-busy customers retailSOS.ca | Gerry Spitzner 18
  • 19.  Complexity brings them to a screeching halt They subscribe to the “ If it ain’t broke, don’t fix it “ philosophy retailSOS.ca | Gerry Spitzner 19
  • 20.  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. retailSOS.ca | Gerry Spitzner 20
  • 21.  Make your presentation in terms of the retailer, your customer. retailSOS.ca | Gerry Spitzner 21
  • 22.  How they benefit, how they profit, and how they produce will provide value. retailSOS.ca | Gerry Spitzner 22
  • 23.  Keep things simple Demonstrate strong biz case Minimize the risk Prepare, prepare, prepare retailSOS.ca | Gerry Spitzner 23
  • 24. Taking a look at the initialpurchasing process from the buyer’sperspective offers invaluableinsight to consider in your ownselling process. retailSOS.ca | Gerry Spitzner 24
  • 25.  Profit; make money or save time Want products that turn over at a price that will make them money Theywant to know the repeat purchase potential, and can it be replenished quickly and reliably. retailSOS.ca | Gerry Spitzner 25
  • 26.  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 ◦ Increased impulse sales = increased average sale per customer retailSOS.ca | Gerry Spitzner 26
  • 27. In addition to mentally preparing forthe meeting, heres a list of some ofthe things a retail buyer may expectto see at your presentation. retailSOS.ca | Gerry Spitzner 27
  • 28.  What your biz background is Your Financial means Number of years in business Geographical limitations ◦ What area can you physically cover and ship to? Always remember while you are qualifying them; they are qualifying you. Know, like, trust. retailSOS.ca | Gerry Spitzner 28
  • 29.  Do not expect the retail buyer to know everything about the product category. ◦ Come in with some facts & market research. ◦ Sales trends in the category, consumer research. ◦ Trend watching; help me with what’s hot. ◦ Tell me about something new or up and coming. ◦ What’s happening in the marketplace? retailSOS.ca | Gerry Spitzner 29
  • 30.  You need to know my customers. I do. Do your market research ahead of meeting me and then ask me. retailSOS.ca | Gerry Spitzner 30
  • 31. I need to know your Advertising and promotions plan. How you are going to educate my customers about your product and get them to try it in my store?I dont have these answers for your product, you do. Or you should. retailSOS.ca | Gerry Spitzner 31
  • 32.  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. Your supply chain to the MFR. becomes part of my supply chain and I care what it is. retailSOS.ca | Gerry Spitzner 32
  • 33.  Objections and roadblocks ◦ Objections are signposts that lead you step-by- step toward closing the sale. Understand your customers situation ◦ Help me move product and make money; frame your sale this way. ◦ The buyer is dealing with limited shelf space retailSOS.ca | Gerry Spitzner 33
  • 34.  Shop the store ahead of time Understand the strategic positioning of the store Keep things simple; make your presentation short and snappy Don’t show everything you have at once. Too many choices confuses the buyer. retailSOS.ca | Gerry Spitzner 34
  • 35.  The answer is no... If they feel pressure from you, If they feel like youre trying too hard to be liked, If they dont think you understand their business, If they think you’re focused on what’s in it for you, If they get overwhelmed by what youre saying. retailSOS.ca | Gerry Spitzner 35
  • 36. What you say and how you deliveryour “pitch” will make all thedifference... retailSOS.ca | Gerry Spitzner 36
  • 37.  Where else are you selling this product? ◦ What makes it sell? ◦ What problem does it solve?Ineed to know why your product will be wanted by my customers. ◦ Is there a “market match” to my market? ◦ What does it ultimately help my customers achieve? retailSOS.ca | Gerry Spitzner 37
  • 38.  Is there a need or a market? Or both? A need alone does not = a market; Desire does And desire is the sweet spot where the market is. retailSOS.ca | Gerry Spitzner 38
  • 39.  Push or pull product? What is the barrier to entry? Is your product future proof? What is the life cycle of product? retailSOS.ca | Gerry Spitzner 39
  • 40.  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. retailSOS.ca | Gerry Spitzner 40
  • 41.  A retailer’s shelf space is their commodity. Add interest and ‘excitement’ to their stores with new products and value. Will this item make my store more appealing? retailSOS.ca | Gerry Spitzner 41
  • 42.  Mustbe easily understood by store staff and consumers. How & Who will educate my customers? What retail price can I get for this product? retailSOS.ca | Gerry Spitzner 42
  • 43.  The retail pricing approach depends on the product and the buyer. Some look at product first; ◦ then see if they can ‘carry’ the price Others look at cost first; ◦ they are judging what the selling price would be and if a fit to their market or match in a category. retailSOS.ca | Gerry Spitzner 43
  • 44. Setting the right price for yourproducts and services requiresbalancing merchandising, pricing,placement, packaging, andpromotion. retailSOS.ca | Gerry Spitzner 44
  • 45.  Know your competition Do not compromise on your price Know your taxes; HST to PST/GST Wholesaler upcharges Brokers fees Include all your costs retailSOS.ca | Gerry Spitzner 45
  • 46.  Mark up & margin. What’s the difference? All of these terms can get confused in the conversation. ◦ Gross profit percent; GP% ◦ Gross profit dollars; GP$ ◦ Gross margin percent; GM% ◦ Gross margin dollars; GM$ retailSOS.ca | Gerry Spitzner 46
  • 47.  Tamper proof packaging Display racks and trays Display packages with a window Off shelf areas for new mix Must fit on shelf in section or category it is going to be merchandised in retailSOS.ca | Gerry Spitzner 47
  • 48.  Plan-o-grams & compliance Package size/dimensions Photos UPC code UPC code that stays on package Packaging is effective and worthy of shelf space retailSOS.ca | Gerry Spitzner 48
  • 49. Retail distribution channels consistof some combination of producersor manufacturers, agents or brokers,wholesalers or distributors,transportation, importers, andretailers. retailSOS.ca | Gerry Spitzner 49
  • 50.  Three main supply chain channels... ◦ What is your cost to ship to your customer? Wholesalers Direct Store Delivery; DSD Self Distributors; Chain retailSOS.ca | Gerry Spitzner 50
  • 51.  Department stores Mass & Big Box Specialty & Discount Catalogue & Internet Grocery & Drug Stores Convenience stores retailSOS.ca | Gerry Spitzner 51
  • 52.  Within each retail category; 3 types ◦ Chain ◦ Banner stores ◦ Independent stores Who exactly is your ideal customer? ◦ Who is your end consumer? ◦ Where and why does he or she buy? retailSOS.ca | Gerry Spitzner 52
  • 53.  Is the product WMS friendly? Case and product UPC Dealing with concealed damages Case pack; smaller MOM’s? Logistics or transportation charges; how are they determined? retailSOS.ca | Gerry Spitzner 53
  • 54.  Consider using a professional agent, broker or wholesaler. ◦ When you don’t have your own sales team or sales is not your strong point . ◦ There is a cost; however they have connections and already established relationships. ◦ Some wholesalers have their own sales dept. that you may be able to “tap into” for representation. retailSOS.ca | Gerry Spitzner 54
  • 55. A successful marketing plan doesnthave to be complex or lengthy, butshould contain enough informationto help you establish, direct andcoordinate your marketing efforts. retailSOS.ca | Gerry Spitzner 55
  • 56.  Endure long receivable cycle Provide dating Provide prompt pay discount Payment by credit card Even risk not being paid retailSOS.ca | Gerry Spitzner 56
  • 57.  Provide a listing allowance Prepay freight; delivery to door Clear up damages and returns Have a plan for recall Sign a vendor agreement retailSOS.ca | Gerry Spitzner 57
  • 58.  Use a wholesaler or broker that specializes in your product category Referrals are the way to go Value in a short term incentive Becoming the retailer & go online The use of online business media Carefully consider consignment retailSOS.ca | Gerry Spitzner 58
  • 59.  There is a stumbling block...for importers. National chain retailers have their own import department. Why do they need you? retailSOS.ca | Gerry Spitzner 59
  • 60. Now what or what now? …Your outlook is a matter of yourpositive attitude and willingnessto help. retailSOS.ca | Gerry Spitzner 60
  • 61.  How can you?... Help them make money Save them time Make them feel safe Make them feel special retailSOS.ca | Gerry Spitzner 61
  • 62.  Confidence is the #1 factor ◦ in determining what, from who and where retailers buy... quality is #2, service is #3 selection is #4 and price is #5 retailSOS.ca | Gerry Spitzner 62
  • 63.  The approach to IND’s and Banners is different than approach to chain... Chain retailers like to act like small retailers IND and Banner retailers look for products not in chains retailSOS.ca | Gerry Spitzner 63
  • 64.  Just because you are new, doesn’t mean you are not worth the chance. Retailersneed new mix to create, engage and keep customers. Increase impulse sales and profit retailSOS.ca | Gerry Spitzner 64
  • 65.  Decide first if you want to approach IND’s, banner or chain retailers. Then determine your exact ideal retail customer and method of distribution. retailSOS.ca | Gerry Spitzner 65
  • 66.  Start a sales & marketing plan. Understand your target market and it’s buying motivators. ◦ Retailer (your customer) and end consumers Who, what, where, how and why? retailSOS.ca | Gerry Spitzner 66
  • 67.  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. ◦ Consider the applied benefits of the benefit. ◦ Your UVP should include what you bring to the table. retailSOS.ca | Gerry Spitzner 67
  • 68.  Retailers are looking for new products to differentiate their stores... ◦ They don’t have time to find them; ◦ They need you to help them find the products and then help them “move” the inventory... This is your opportunity! retailSOS.ca | Gerry Spitzner 68
  • 69.  Your evaluation is appreciated... Want a copy of this presentation with my speakers notes? E-mail me; gerry@retailSOS.ca retailSOS.ca | Gerry Spitzner 69
  • 70.  Follow Twitter: @passion4retail Connect LinkedIn: Gerry Spitzner Web: retailSOS.ca Blog: gerryspitzner.com Email: gerry@retailsos.ca Online Biz Card: gerryspitzner.tel Online Biz Card: retailSOS.tel retailSOS.ca | Gerry Spitzner 70
  • 71.  retailSOS.ca is a Vancouver-based retail consultancy guiding small business owners to create, engage and keep great customers by doing the right thing really well. Gerry Spitzner works as a management consultant supporting retail and small business owners to achieve results by aligning their vision and implementing marketing strategy with operational execution. Drawing on 35+ years experience in multi-site retail operations, independent store ownership and the wholesale supply-chain; Gerry brings the leadership, knowledge and market awareness of ownership and business development to retail and small business owners to achieve growth objectives. retailSOS.ca | Gerry Spitzner 71
  • 72.  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* For wholesalers; use Google key words; *wholesale (your product category i.e. clothing) vancouver bc* retailSOS.ca | Gerry Spitzner 72
  • 73.  WalMart Vendor agreement: http://www.walmartstores.com/Suppliers/248.aspx Canadian Tire vendor agreement: http://corp.canadiantire.ca/EN/JoinOurTeam/Suppliers/Pages/Suppli erRequirements.aspx Target vendor agreement: http://img1.targetimg1.com/wcsstore/marketing/ca/company/image s/canada/pdf/Vendor_Online_Agreement.pdf Home Depot vendor agreement: https://homedepotlink.homedepot.com/en- us/Related%20Documents/Canada%20Supplier%20Terms%20and%2 0Conditions02-04.pdf retailSOS.ca | Gerry Spitzner 73
  • 74.  For QR codes: www.qrstuff.com For bar code info; www.gs1ca.org Retail associations: Shelfspace - The Association for Independent Retailers http://www.shelfspace.ca/ Retail Council of Canada: www.retailcouncil.org NRF - National Retail Federation; Global retail http://www.nrf.com/ retailSOS.ca | Gerry Spitzner 74
  • 75.  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 retailSOS.ca | Gerry Spitzner 75
  • 76.  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 retailSOS.ca | Gerry Spitzner 76
  • 77.  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 retailSOS.ca | Gerry Spitzner 77