Small Business BC-retail distribution-09may2012


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  • Thanks for coming-housekeeping details.15 second intro; participants introduce themselves, their product, what they want to accomplish.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; all my contact info is at retailsos.telSo, you wanna sell me your product? (resistance, skepticism, and cautious attitude) Have you ever encountered that? How did that make you feel? 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 upPurchasing methods-timing, requirements, what you need to have and know, measurements retailers useDistribution-the retail channels and the supply chain logisticsProduct-from your perspective and the retailers, pricing/merchandisingPreparation- your approach, meeting with prospects, market research, and motivators
  • Today, my goal is to help you with insights to prepare for creating and keeping your customer. The challenge is dealing with Crazy Busy overly informed people.Insights-How can I help you? Encourage discussion, ask questions-no “out of bounds”.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 financial plan.Create a “KILLER” sales & marketing plan to clearly and concisely outline your long term vision and guide your daily, weekly and monthly activities.Lay out how you’ll bring your product to market, what your target audience is, how you intend to reach and sell to it and at what price. Include info on your competitors, your strategic alliances, suppliers, product/service, promotions, and advertising. Ask participants if there is anything they would like me to cover.
  • Question to consider; “How do I become the preferred supplier of what I sell?” Think customers for life.
  • 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. Often confused with POP.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 SystemSKU 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. Their own profit centre.UPC; go to for info; sometimes referred to as bar codeQR codes; the square box with the squiggly lines; usually directs you to a website; go to to createPO; 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 overlooked?
  • Familiar with the 4 P’s of marketing? (refer to slide)...always consider the 4 P’s of within your marketing plan.However there are 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 sales 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; get productivityfrom every square inch of shelfspace & display space. Also, to understand how and why our customers shop with us.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 NET profit is.
  • Really...who is your customer?YOUR end 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 with retailers.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.).
  • Who is better at closing the sale; the prospect or you?If all business is built on relationships, then no matter your enterprize, building good relationships is your business.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.The simple truth about selling – and the secret to selling more - is that your prospects are better at the closing the sale than you are. If you’re able to lead them to it.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 first meeting is a distant memory.
  • Have you ever had... (refer to slide). Show of handsEvery retail buyer has had this feeling too.I usually get this feeling after I felt like I’ve been soldThis is why most buyers/retailers are sceptical and cautiousPeople 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 that...cuz in today's world rather you MUST show your unique VALUE proposition.Definition of Value: is a function of the bundle of perceived benefits offered at a given price.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 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.Help me understand how I benefit and how my customers benefit. Sell the applied benefits of the benefit.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.Ask; don’t tell. Stop ‘selling’ and help your customers buy.
  • One thing retailers are not thinking about is the stuff you are sellingWhat can I learn from you that will help my business do better, make more money, achieve more profit and be scalable? (this is value)Traffic = an opportunity to make a sale. Traffic = 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
  • Listing a new supplier is a hassle for retailers; especially for chain.There are over 50K products in the average grocery store & 25K products in the average IND drug store. 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.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 money to pay for it?It’s an assessment of my investment of cash and human resources = my RISK.Buyers perception of risk. What if it doesn’t sell or stops selling and I’m stuck with it?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 top two controllable assets in the business. Constantly scrutinized and measured.The other is wages and employee costs.
  • It’s easy to turn cash into inventory...the challenge is to turn inventory into cash.Quickly, Productively and Profitably.So, Inventory mgmt is the main focus of all retailers.Life blood of cash flow for the business.Help me move it; and promote it.
  • What's really going on inside the minds of those frazzled customers to cause them to keep you at a distance, brush you off, dismiss you entirely, or stick with the status quo?Several things are in play, but once you recognize how they think—and what you're doing that is bringing them to the breaking point—you can change your behaviour so that they do the opposite and pay attention to you.So, how do you do that?
  • Overwhelmed people can't take in, sort through, or make senseof massive amounts of information, or multiple variables for a major change initiative. When they sense that the effort required will make their lives even more complicated, they call it quits even if the change would have been good for them.Busy decision makers don't have time for things that aren't urgent. They may limp along with all sorts of makeshift solutions and workarounds. Their current inefficient way of doing things may even drain massive amounts of money from their pocketbooks or their company. Despite all that—and the fact that it makes sense to change—they don't do it. It's too much work.
  • Nothing is more off-putting to busy people than the thought of a risky decision that could turn into a quagmire, require additional effort for approval, or put their careers at stake. Even a small whiff of risk is enough to prevent many customers from taking any action—or cause them to do business with another company.Most products and services look pretty similar these days—especially to busy people. Even if you have a marketplace lead, customers believe it's only temporary and that competitors will soon catch up. When customers can't differentiate, they default to price as a key factor.Suffer no fools gladly means; Not tolerant of stupidity or incompetence in other people.In every conversation and interaction, frazzled customers ask themselves, "Does she know what he's talking about? How much work has he done in this field? If they detect insecurity, knowledge gaps, or BS, they won't want anything to do with the seller or their company.None of the above things should come as a shock to you. We all think like that when we are overwhelmed with work and responsibilities. It's a normal human reaction, but it still makes selling tough. And in a challenging economy, that type of thinking is exacerbated as your prospects struggle with even greater workloads and fear of job loss.
  • Keep it simple. Everything. As much as possible. Write short emails. Cut unnecessary material from proposals. Show them how you'll make it easy for them. Give them fewer decisions.Demonstrate strong biz case and show prospects the value they'll get from making a change. Help them see how they'll achieve their primary business objectives.Minimize the risk. Demonstrate your personal competence upfront. Talk about experiences with similar customers. Propose smaller initial contracts or deals.If you aren't prepared, you aren't credible. In fact, you're just like every other self-serving salesperson. Make sure every meeting with you is well worth their time. Prepare a sales and marketing plan, understand the market, your product and demonstrate the “market match”.When you do those things, you will be irresistible. And that's exactly what you want.
  • 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)Unlike previous recessions, the latest one shifted consumer behaviour permanently. Customers today expect much more for even less, and they will quickly buy on price if a business does not demonstrate value in every sense of the word. Improving the customer experience is one of the most effective and enduring ways a business can demonstrate that value. That’s why delivering a compelling customer experience has become an important competitive battleground.Focus on making a difference, not getting a sale. Act and talk as if they are already your customer.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.).
  • Your customer (buyer) wants to know what’s in this for me and my customer?Focus on these benefits;These are valuable ideas to articulate and ask questions about. Practice this and get great at it to engage and build a relationship to position yourself as a trusted advisor.Today, in the information age, it’s a challenge dealing with the overly informed customer. 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 know, like and trust. When your prospect views you as a trusted resource, rather than a self-serving sales person the resistance drops.A great resource for using questions is; Jeffery Gitomer’s Little Red Book of Selling or his earlier book The Sales Bible. will help you with formulating valuable open-ended questions that engage conversation to help pull your prospect rather than pushing for the sale at all costs.
  • What are the motivators...or why they buy.Profit = a combination of money and time.Will the product turnover; can it be replenished quickly and reliably. This is a key objective on every 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.
  • 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.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.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.
  • 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. Make me feel safe you will survive.The position you hold in your customers mind determines all reactions and interactions with you.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.Always remember while you are qualifying them; they are qualifying you. Know, like, trust.
  • Buying is a hard job especially at chain retail. For category managers to know their category inside and out takes time to research. 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 or find new items. 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 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. Then 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 online media like Twitter, Facebook, Google Ads, or Foursquare? Help me with a Groupon.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.
  • Let’s take a moment to recap…Here is a strategy to approach retailers that will lead to new clients.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?Don't present merchandise to a buyer that is completely out of sync with their company's direction or target market.Make your presentation as concise and focused as possible, instead of trying to show "everything under the sun”.Don’t show everything you have at once. Too many choices confuses the buyer.Avoid the trap of overselling; don’t over do it. Watch for buying signals; and “Don’t push on an open door.”
  • 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.Interpret it as a question.Develop an approach to every common objection you will encounter in today’s reality; get them out early in your contact; then work on ways to help your buyer overcome them.The buyer is dealing with limited shelf space, open to buy budgets, limited cash and the ability to test new products.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.Prepare thoroughly prior to selling, presentation, and 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 themselves with the most specific needs of the customer is the one who builds the highest level of trust and the best sales relationship.
  • Every time you interact with your prospects, they're evaluating you and asking themselves: "Is this a person (company) I want to work with on a long-term basis?" To be most effective in sales today, it's imperative to drop your "sales" mentality and start working with your prospects as if they've already hired you. When you do, it shifts your relationship to a whole new level from the start. So many people are afraid to give away their ideas before a purchase is made or a contract is signed. But often that's the best way to win the business. What would you do for a customer that you'd never think about doing for a prospect? Are you holding back something because you're afraid they'll steal it? Are you approaching your meetings as a chance to really "strut your stuff" or are you getting to work? For many sellers, this is a new concept. Think about how you can be more forthcoming-even before you start working together. It's worth it. Break.....15 minutes
  • Logistics means how will you get your product to the receiving door of the store. It is better known as the supply chain.The Retail distribution channel is the main category and type of store.
  • These are the 3 main 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 to ship?However decide your logistics after you’ve decided your target customer.
  • Likely your product will fit into one or more of these channels.These are retail industry sub-categories; your target customers. Generally they fall into one of six categories;ExamplesThe Bay, Sears, Army & NavyZellers, Target, Wal-Mart, Costco, Home Depot, The Brick Micheals, Indigo Books &Music, and Dollar StoresThe Shopping network; E-bay; Amazon; ZapposSafeway, Save-On Foods; London Drugs, ShoppersC-store; ie. 7-11, Macs, Town Pantry, Esso-On the Run, Petro Canada; all serviced by the same wholesaler; Core-Mark
  • Within each category there are basically 3 types.Chains i.e.. Future Shop, Starbucks, Cdn Tire, SDM; explain the difference between chain, banner and IND’s;Pharmasave, Home Hardware are banners. 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, banner or IND, there are potentially lots of retailers to focus on within categories.Who exactly is your ideal customer?Another way to ask this question is, who is the retailer and why will they buy from you? Who is your end consumer? Where and why does he or she buy?Pick your customer carefully; i.e. WalMart, RCSS, SDM- do you really want to be there? Why?Pick one channel and one type 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 master 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. Reduce the risk of a large quantity. Which is value to the buyer.
  • Agents (sometimes called brokers) are also intermediaries who work between suppliers and retailers (or in B2B channels), but their agreements are different, in that they do not take ownership of the products they sell. They are independent sales representatives who typically work on commission based on sales volume, and they can sell to wholesalers as well as retailers. In B2B arrangements, this means they sell to distributors and end users.There is a cost for using an agent, broker or wholesaler’s sales team.Called a Professional Agent or Brokers fee, could be a royalty or % of sales.Wholesalers upcharge; typically a % of your cost and add it to the cost.Some wholesalers have their own sales dept. that you may be able to “tap into” for representation.However; the cost may be worth it for you, since they have the connections and can get referrals that may help you engineer an initial success story or testimonial.If you get a professional agent, broker or wholesaler make sure they really understand your biz.
  • You should be able to tell me this when we meet. But don’t necessarily take it as an objection.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? A match to my marketing mix.Being unlike anything else on my shelf is not enough.Being different alone; doesn't equal desirable; and desire is what moves the customer.Desire…means that people want it and need it and can use it and can afford it and are willing to buy it; NOW.
  • 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 (retail buyers and end consumers) 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 what is called a “pull” product. Magic combo!If I have to help you create a market; I’ll expect a better price (or terms of payment).
  • Retailers always 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 consumer demand (a pull product)?Future proof; will your product (or category) be around in a month? In a year? What is the barrier to entry for competition?Is it a long term or short term product?(length of life cycle). A new product progresses through a sequence of stages from introduction to growth, maturity, and decline. This sequence is known as the product life cycle and is associated with changes in the marketing situation, thus impacting the marketing strategy and the marketing mix.
  • In the end…all buyers do things for their own reasons, not the sellers' reasons. This is only a partial list; add TV advertising, coupon drops and other traditional marketing initiatives by mfrs.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? It at least means it doesn’t duplicate what I already have.Uniqueness means individuality, exclusivity, distinctiveness combined.Focus on these as benefits for the retailers.Also, 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 so they can explain it.If it’s a more complex product...what’s your plan to educate my staff?
  • 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.How retail prices are set is critical to your Sales & Marketing Plan. 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. Negotiate; If you will do… then I will do... That way each party gains.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; factor this into your COG’sCalculate and include things like shipping, packaging, cost of replacing damages, etc
  • 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.To price products, you need to get familiar with pricing structures, especially the difference between margin and markup.Markup and (gross-profit) margin on a single product, or group of products, are often confused. The reason for this is that when expressed as a percentage, margin is always figured as a percentage of the selling price, while markup is traditionally figured as a percentage of the seller's cost.Mark up is % of profit on cost and margin is % of profit on selling price.GM$ sometimes referred to as GP DollarsTalk Dollars; nothing else matters. I take this to the bank not percentages. Refer and use the handout for further explanation.
  • Understanding the retail merchandising environment is critical.Chain retailers might ask for anti theft tags to be installed inside the packaging at your cost. Theft & Loss prevention.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 at the shelf or point of decision to buy.
  • Chains more than IND practice sophisticated category management; they will require this stuffChain merchandising is compliant to POG’S. Explain POG’s. IND’s more flexible.POG’s include package size and photographs. Chain retailers expect you to provide them.Does your product fit on any shelf? If not; it’s gonna be merchandised on the bottom or top shelf or out of section.Demonstrate how the retail footprint for your product packaging is effective and worthy of shelf space. i.e. 12 packs of soda pop can be stacked 4 different ways, books can be cover or spine, 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, re-sealable confection products, cling wrap refills.
  • Look at additional items to consider for your sales and marketing plan.
  • 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). Frame this as a convenience fee.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 Chain: 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.
  • 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; to new customers for I’m offering...Or consider offering exclusivity in a certain area or postal code for a period of time.
  • If you decide to become the retailer; then start with www.internetretailer.comStay current and learn how to use all the new social media technologies as part of your marketing strategy; using twitter, facebook, your personal blog, and you tube, etc. To get your product noticed out there.Online promos are most successful if end consumers felt they were given exclusive offers. The treasure hunt.Customized phone apps with exclusive offers. Coupons can be downloaded to customers phone. Groupon, Swarm Jam, Deal Tickers. Scan the QR code instore for instant info and exclusive offers. Foursquare special offers.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. Does work for some; i.e. Artists, test markets. Put a time limit on it.
  • Stumbling block...for importers.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 and are cutthroat. They won’t loose a minute of sleep cutting you out. So be CAREFUL what info and contacts you share.
  • Last two years; SKU rationalizationSKU reduction; Even if they are profitable items were eliminated; as a shelf management strategy.Retailers were making space to hold core mix with high turns; slower moving sku’s were removed or assortment reduced.In the process of rationalization many retailers eliminated specialty, niche and destination items. Not a good strategy for the medium and long term; the result, stores are looking exactly alike with the same mix and very few points of differentiation.Profit erosion from impulse items that made money.Retailers realized they’ve gone too far. So now they are looking for “local”, unique or imported profitable products to add to their mix to keep customers engaged and in the store longer. Especially products that appeal to the “treasure hunt” for consumers.
  • Chain retailers are always looking for unique niche products because they like to act like small retailers to differentiate themselves from other chains. IND’s look for products not in the chain stores because they don’t like to compete on price.However, for adding new mix; both types have challenges; Large retailers have big overheads and move slow; small retail have issues with access to capital for inventory and cash flow.Although, small IND retail seems to have the advantage right now because they can move fast on new mix.Right now; IND retailers just simply want to buy less more often and they want new mix to differentiate themselves from chain.If you can solve the IND challenge of buying less more often; you will differentiate yourself from your competition. This is value.
  • 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 from a recent study; relationships are 2 of top 3 and they are perceived benefits.So often, people assume ‘price’ is the only way to compete but it’s usually not the most important.When you understand the 4 “currencies” in peoples lives, there are 100’s of ways to compete and WIN.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 if not done up front.Give value first, don’t add it later.
  • Recap the opportunities...Do you see the difficulty in the opportunity or the opportunity in the difficulty?Chain is a longer selling cycle; IND is shorter.But Chain is a big bang; IND is smaller pop.Both tend to work in the biz rather than on the bizThere are stumbling blocks and lots to consider but no matter what…Retailers are always looking for new products to differentiate their mix, add ‘excitement’ to their stores, create an impulse sale and add profit to their average sale.Large or small, chain or IND, the profit opportunity exists for every type of retailer that has exciting product and delivers a real focused experience of new and localized mix to their customers.Help them find the products and then help them “move” the inventory. This your opportunity.
  • Who do you want to approach? (focus on one or the other).The dominant relationship at chain retail is with brand suppliers. The dominant relationship at IND is with independent suppliers and wholesalers. Today, chain retailers rarely consider a product that hasn’t been tested and proven in a local market small retailer. However there are exceptions.Since, all chain retailers practice some form of Category Management it’s tough to crack the ‘line up’; so you ought to have a market demand product with proven sales history in some market in a similar type of store.Depending on your product; I suggest; start with small IND or Banner first to build a local market; then go to chain retailers.Once you’ve determined your retail channel; (Ind’s, chain or banner) then decide how you will get your product to your customers door?Figure out what it will cost...can you make money? Otherwise what’s the point.
  • The strategic marketing plan is probably the most important document you will create throughout your marketing efforts. It establishes a roadmap for your sales and marketing planning, to maximize your resources. It quite simply is a must do. Start a simple Sales & Marketing Plan as a blueprint.Who is your ideal CONSUMER; Who is your ideal customer? What motivates them? Where do consumers buy your type of product? Why do they need it or use it?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.
  • Continuously evaluate and re-evaluate your value proposition so it keeps up with a quick changing world and stays real current.The market place is ever changing and evolving.Focus your value proposition on benefits not just features.Remember value is the bundle of perceivedbenefits offered at a given price.What are the applied benefits of the benefit.
  • Thanks for coming. I hope I’ve helped you.Without your opinion, mine doesn't matter. Your participation in this short online survey assists me in developing great programs and services for you in the future.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 ONLINEEVALUATIONSYour written comments are always appreciated either on the seminar evaluation or by direct email to me.Want a copy of my speakers notes; email me.Or just let me know how you’re doing.And if it’s a fit for you; How can I be of service to you, right now?
  • Small Business BC-retail distribution-09may2012

    1. 1. Small Business BC Gerry Spitzner | Find me: May 9, 2012
    2. 2.  Thoughtstarters Purchasing methods Distribution Product Preparation | Gerry Spitzner 3
    3. 3.  Insights for creating and keeping your customer Your sales & marketing plan Your questions How can I be of service to you, right now? | Gerry Spitzner 4
    4. 4.  How to approach retailers Why and how they buy Retail distribution channels What buyers look for in a supplier What buyers look for in a product | Gerry Spitzner 5
    5. 5.  AR = Accounts Receivable POS= point of sale POP= point of purchase WMS= warehouse mgmt system SKU= stock keeping unit MOM= minimum order multiple CPG= consumer package good | Gerry Spitzner 6
    6. 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 | Gerry Spitzner 7
    7. 7.  DSD = Direct Store Distribution EDI = Electronic Data Interchange EDLP = Everyday Low Pricing OTB = Open-to-Buy POG = Plan-o-gram RDA = Retail Display Allowance | Gerry Spitzner 8
    8. 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. | Gerry Spitzner 9
    9. 9.  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? | Gerry Spitzner 10
    10. 10.  What‟s the difference between your customers and your consumers ? | Gerry Spitzner 11
    11. 11.  How to sell or why retailers buy; which do you prefer to learn? Who are your prospects more likely to believe; themselves or you? | Gerry Spitzner 12
    12. 12.  Ever had buyers remorse? | Gerry Spitzner 13
    13. 13.  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. | Gerry Spitzner 14
    14. 14. Do you sometimes wish you couldjust read your buyer‟s mind? | Gerry Spitzner 15
    15. 15.  Top line sales and cash flow Customer traffic Customer profitability Staff productivity Return on investment; ROI | Gerry Spitzner 16
    16. 16.  Do we really need that? | Gerry Spitzner 17
    17. 17.  Inventory is the retail gamble Help me move it; and promote it. | Gerry Spitzner 18
    18. 18.  Make yourself irresistible to crazy-busy customers | Gerry Spitzner 19
    19. 19.  Complexity brings them to a screeching halt They subscribe to the „ If it ain‟t broke, don‟t fix it ‟ philosophy | Gerry Spitzner 20
    20. 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. | Gerry Spitzner 21
    21. 21.  Keep things simple Demonstrate strong biz case Minimize the risk Prepare, prepare, prepare | Gerry Spitzner 22
    22. 22.  Make your presentation in terms of the customer. | Gerry Spitzner 23
    23. 23.  How they benefit, how theyprofit, and how they produce will provide value. | Gerry Spitzner 24
    24. 24. Taking a look at the initialpurchasing process from the buyer‟sperspective offers invaluableinsight to consider in your ownselling process. | Gerry Spitzner 25
    25. 25.  Profit; make money or save time Want to find something (new) that turns over at a price that will make them money | Gerry Spitzner 26
    26. 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 Increases impulse sales = increase average sale/customer | Gerry Spitzner 27
    27. 27.  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. | Gerry Spitzner 28
    28. 28.  Trend watching; help me with what‟s hot. Tell me about something new or up and coming. | Gerry Spitzner 29
    29. 29.  You need to know my customers. I do. Ask me. | Gerry Spitzner 30
    30. 30.  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? | Gerry Spitzner 31
    31. 31.  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. | Gerry Spitzner 32
    32. 32.  Shop the store ahead of time Understand the strategic positioning of the store Keep things simple; make your presentation short and snappy | Gerry Spitzner 33
    33. 33.  Objections and roadblocks Understand customers situation Help me move product and make money; frame your sale this way. | Gerry Spitzner 34
    34. 34.  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 get overwhelmed by what youre saying. | Gerry Spitzner 35
    35. 35. Retail distribution channels consistof some combination of producersor manufacturers, agents orbrokers, wholesalers ordistributors, importers, andretailers. | Gerry Spitzner 36
    36. 36.  3 Main supply chain channels... ◦ What is your cost to ship to your customer? Wholesalers DSD; (Direct Store Delivery) Chain; Self Distributors | Gerry Spitzner 37
    37. 37.  Department stores Mass & Big Box Specialty & Discount Catalogue & Internet Grocery & Drug Stores Convenience stores | Gerry Spitzner 38
    38. 38.  Within each category; 3 types Chain Banner stores Independent stores | Gerry Spitzner 39
    39. 39.  Is the product WMS friendly? Case and product UPC Dealing with concealed damages Case pack | Gerry Spitzner 40
    40. 40.  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 Spitzner 41
    41. 41. What you say and how you deliveryour “pitch” will make all thedifference... | Gerry Spitzner 42
    42. 42.  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”? | Gerry Spitzner 43
    43. 43.  Is there a need or a market? Or both? A need alone does not = a market; desire does | Gerry Spitzner 44
    44. 44.  Push or pull product? Is your product future proof? What is the life cycle of product? | Gerry Spitzner 45
    45. 45.  Taste, health, ingredients, appear ance, 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 | Gerry Spitzner 46
    46. 46.  Look for items that are different; not the same; uniqueness Must be easily understood by store staff and consumers | Gerry Spitzner 47
    47. 47.  Add interest and excitement to their stores with new products What retail price can I get for this product? | Gerry Spitzner 48
    48. 48.  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 | Gerry Spitzner 49
    49. 49. Setting the right price for yourproducts and services requiresbalancingmerchandising, pricing, placement,packaging, and promotion. | Gerry Spitzner 50
    50. 50.  Do not compromise on your price Know your competition Know your taxes Wholesaler upcharges Brokers fees Include all your costs | Gerry Spitzner 51
    51. 51.  Mark up and margin Gross profit percent; GP% Gross profit dollars; GP$ Gross margin percent; GM% Gross margin dollars; GM$ | Gerry Spitzner 52
    52. 52.  Tamper proof packaging UPC code that stays on package Display racks and trays Display packages with a window Off shelf areas for new mix | Gerry Spitzner 53
    53. 53.  Plan-o-grams & compliance Package size/dimensions Photos Must fit on a shelf in the section or category it is merchandised in | Gerry Spitzner 54
    54. 54. A successful marketing plan doesnthave to be complex or lengthy, butshould contain enough informationto help you establish, direct andcoordinate your marketing efforts. | Gerry Spitzner 55
    55. 55.  Endure long receivable cycle Provide dating Provide prompt pay discount Payment by credit card Even risk not being paid | Gerry Spitzner 56
    56. 56.  Provide a listing allowance Prepay freight; delivery to door Clear up damages and returns Have a plan for recall Sign a vendor agreement | Gerry Spitzner 57
    57. 57.  Use a wholesaler or broker that specializes in your product Referrals are the way to go Value in a short term incentive | Gerry Spitzner 58
    58. 58.  Becoming the retailer & go online The use of online business media Carefully consider consignment | Gerry Spitzner 59
    59. 59.  National chain retailers have their own import department Why do they need you? | Gerry Spitzner 60
    60. 60. Now what or what now? …Your outlook is a matter of yourpositive attitude and willingnessto help. | Gerry Spitzner 61
    61. 61.  Retailers need new mix to create, engage and keep customers. Increase impulse sales and profit | Gerry Spitzner 62
    62. 62.  Chain retailers like to act like small retailers IND retailers look for unique products not in chains | Gerry Spitzner 63
    63. 63.  How can you?... Help them make money Save them time Make them feel safe Make them feel special | Gerry Spitzner 64
    64. 64.  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 | Gerry Spitzner 65
    65. 65.  Retailers are looking for new products to differentiate their stores... They don‟t have time to find them; this is your opportunity! | Gerry Spitzner 66
    66. 66.  Decide first if you want to approach IND‟s or chain retailers. Then determine your exact retail target and method of distribution. | Gerry Spitzner 67
    67. 67.  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? | Gerry Spitzner 68
    68. 68.  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 | Gerry Spitzner 69
    69. 69.  Your evaluation is appreciated Want a copy of this presentation with my speakers notes? E-mail me; | Gerry Spitzner 70
    70. 70.  Follow Twitter: @passion4retail Connect LinkedIn: Gerry Spitzner Web: Email: Online Biz Card: Online Biz Card: | Gerry Spitzner 71
    71. 71.  For bar code info; For mfr agents info: urers%20agents%20representatives.html For list of mfr agents; Google key words; *manufacturers agents vancouver bc*; or *{food brokers} vancouver bc* | Gerry Spitzner 72
    72. 72.  For QR codes: For wholesalers; use Google key words; *wholesale (your product category i.e. clothing) vancouver bc* Retail associations: Shelfspace or Retail Council of Canada: | Gerry Spitzner 73
    73. 73.  Sales questions: Sales and personal development: Retail, sales & marketing and small business: Retail, sales & marketing and small business: | Gerry Spitzner 74
    74. 74.  Sales & Marketing: Trends: Trends: Trends: Pricing and margin definition: | Gerry Spitzner 75
    75. 75.  Little Red Book of Selling; by Jeffrey Gitomer The Sales Bible; by Jeffrey Gitomer Be Different or Be Dead; by Roy Osing Unmarketing: by Scott Stratten Enchantment: by Guy Kawasaki | Gerry Spitzner 76