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?
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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Small Business BC-retail distribution-26 nov2012

  1. 1. Small Business BC Gerry Spitzner | Find me: November 26, 2012
  2. 2.  Thoughtstarters Purchasing methods Distribution Product Preparation | Gerry Spitzner 2
  3. 3.  Insights for creating, engaging and keeping your customer Inputs and considerations to your business plan Your questions Anything you would like to cover? | Gerry Spitzner 3
  4. 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 | Gerry Spitzner 4
  5. 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 | Gerry Spitzner 5
  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 6
  7. 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 | Gerry Spitzner 7
  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 8
  9. 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. | Gerry Spitzner 9
  10. 10.  What’s the difference between your customers and your consumers ? | Gerry Spitzner 10
  11. 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? | Gerry Spitzner 11
  12. 12.  Have you ever had buyers remorse? | Gerry Spitzner 12
  13. 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. | Gerry Spitzner 13
  14. 14. Do you sometimes wish you couldjust read your buyer’s mind?Ask; don’t tell.Stop ‘selling’ and help yourcustomers buy. | Gerry Spitzner 14
  15. 15.  Top line sales and cash flow Customer traffic Customer profitability Staff productivity Return on investment; ROI | Gerry Spitzner 15
  16. 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? | Gerry Spitzner 16
  17. 17.  Inventory is the retail gamble It’s easy to turn cash into inventory...the challenge is to turn inventory into cash. | Gerry Spitzner 17
  18. 18.  Make yourself irresistible to crazy-busy customers | Gerry Spitzner 18
  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 19
  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 20
  21. 21.  Make your presentation in terms of the retailer, your customer. | Gerry Spitzner 21
  22. 22.  How they benefit, how they profit, and how they produce will provide value. | Gerry Spitzner 22
  23. 23.  Keep things simple Demonstrate strong biz case Minimize the risk Prepare, prepare, prepare | Gerry Spitzner 23
  24. 24. Taking a look at the initialpurchasing process from the buyer’sperspective offers invaluableinsight to consider in your ownselling process. | Gerry Spitzner 24
  25. 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. | Gerry Spitzner 25
  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 ◦ Increased impulse sales = increased average sale per customer | Gerry Spitzner 26
  27. 27. In addition to mentally preparing forthe meeting, heres a list of some ofthe things a retail buyer may expectto see at your presentation. | Gerry Spitzner 27
  28. 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. | Gerry Spitzner 28
  29. 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? | Gerry Spitzner 29
  30. 30.  You need to know my customers. I do. Do your market research ahead of meeting me and then ask me. | Gerry Spitzner 30
  31. 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. | Gerry Spitzner 31
  32. 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. | Gerry Spitzner 32
  33. 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 | Gerry Spitzner 33
  34. 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. | Gerry Spitzner 34
  35. 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. | Gerry Spitzner 35
  36. 36. What you say and how you deliveryour “pitch” will make all thedifference... | Gerry Spitzner 36
  37. 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? | Gerry Spitzner 37
  38. 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. | Gerry Spitzner 38
  39. 39.  Push or pull product? What is the barrier to entry? Is your product future proof? What is the life cycle of product? | Gerry Spitzner 39
  40. 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. | Gerry Spitzner 40
  41. 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? | Gerry Spitzner 41
  42. 42.  Mustbe easily understood by store staff and consumers. How & Who will educate my customers? What retail price can I get for this product? | Gerry Spitzner 42
  43. 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. | Gerry Spitzner 43
  44. 44. Setting the right price for yourproducts and services requiresbalancing merchandising, pricing,placement, packaging, andpromotion. | Gerry Spitzner 44
  45. 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 | Gerry Spitzner 45
  46. 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$ | Gerry Spitzner 46
  47. 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 | Gerry Spitzner 47
  48. 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 | Gerry Spitzner 48
  49. 49. Retail distribution channels consistof some combination of producersor manufacturers, agents or brokers,wholesalers or distributors,transportation, importers, andretailers. | Gerry Spitzner 49
  50. 50.  Three main supply chain channels... ◦ What is your cost to ship to your customer? Wholesalers Direct Store Delivery; DSD Self Distributors; Chain | Gerry Spitzner 50
  51. 51.  Department stores Mass & Big Box Specialty & Discount Catalogue & Internet Grocery & Drug Stores Convenience stores | Gerry Spitzner 51
  52. 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? | Gerry Spitzner 52
  53. 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? | Gerry Spitzner 53
  54. 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. | Gerry Spitzner 54
  55. 55. 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
  56. 56.  Endure long receivable cycle Provide dating Provide prompt pay discount Payment by credit card Even risk not being paid | Gerry Spitzner 56
  57. 57.  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
  58. 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 | Gerry Spitzner 58
  59. 59.  There is a stumbling block...for importers. National chain retailers have their own import department. Why do they need you? | Gerry Spitzner 59
  60. 60. Now what or what now? …Your outlook is a matter of yourpositive attitude and willingnessto help. | Gerry Spitzner 60
  61. 61.  How can you?... Help them make money Save them time Make them feel safe Make them feel special | Gerry Spitzner 61
  62. 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 | Gerry Spitzner 62
  63. 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 | Gerry Spitzner 63
  64. 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 | Gerry Spitzner 64
  65. 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. | Gerry Spitzner 65
  66. 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? | Gerry Spitzner 66
  67. 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. | Gerry Spitzner 67
  68. 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! | Gerry Spitzner 68
  69. 69.  Your evaluation is appreciated... Want a copy of this presentation with my speakers notes? E-mail me; | Gerry Spitzner 69
  70. 70.  Follow Twitter: @passion4retail Connect LinkedIn: Gerry Spitzner Web: Blog: Email: Online Biz Card: Online Biz Card: | Gerry Spitzner 70
  71. 71.  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. | Gerry Spitzner 71
  72. 72.  For mfr agents info: 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* | Gerry Spitzner 72
  73. 73.  WalMart Vendor agreement: Canadian Tire vendor agreement: erRequirements.aspx Target vendor agreement: s/canada/pdf/Vendor_Online_Agreement.pdf Home Depot vendor agreement: us/Related%20Documents/Canada%20Supplier%20Terms%20and%2 0Conditions02-04.pdf | Gerry Spitzner 73
  74. 74.  For QR codes: For bar code info; Retail associations: Shelfspace - The Association for Independent Retailers Retail Council of Canada: NRF - National Retail Federation; Global retail | Gerry Spitzner 74
  75. 75.  Sales questions: Sales and personal development: Retail, sales & marketing and small business: Retail, sales & marketing and small business: | Gerry Spitzner 75
  76. 76.  Sales & Marketing: Trends: Trends: Trends: Pricing and margin definition: | Gerry Spitzner 76
  77. 77.  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 77