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May 18, 2017

Spirit of Shared Benefits Yields Greater Profits for Retailers, Vendors


By Robbie Brown

You Reap What You Sow

You’ve heard the phrases “you reap what you sow” and “you sleep in the bed you make,” and what they simply mean is that what you get and what you gain is largely a result of your efforts to obtain the objective.

In my work with retailers, I often hear comments such as, “My competitors seem to get all the good close-outs,” “I can’t compete with the big boys” or “I seldom hear from my rep.” In some cases, the complaints may be totally legitimate, but in other instances the seeming absence of opportunity is the result of a degraded relationship with the vendor or the vendor rep.

As a consultant and former retailer who has attended hundreds of trade shows and witnessed the interaction between thousands of reps and their retail customers, I can attest to the tarnished treatment that too often exists between the two. Considering that both vendors and retailers have a vested interest in the mutual success of one another, I find that the lack of professional service from some reps and lack of civility from some dealers makes little sense.

Expressed very pointedly, there is a high cost to a retailer treating a vendor rep or a rep treating the retailer as a second-class citizen. Such professional indiscretions, inclusive of poor communication, do nothing to foster sales and profits.

If a retailer treats a vendor or his rep with indifference, disrespect and without appreciation, they will likely miss out on advantageous purchases or special treatment the vendor may offer. Moreover, the rookie rep that was ignored may one day be the sales manager of a hot new line the retailer may desperately want. The sales manager will remember his ill treatment: You sleep in the bed you make.

You might also like: Retailers and Vendors — Profit Partners

Retailers treating their reps in a respectful manner, though, just isn’t enough. The retailer should reach out to the rep and consciously work to create a working relationship that will produce synergies. The door swings in both directions, of course. Vendors and their representatives must do more than simply ask the retailer to buy their lines. There are plenty of vendors and products to buy, so the smart vendor strives to be a standout in terms of service, communication, pricing, promotion, delivery and especially programs that are tailored to help the individual retailer compete and excel.

So what should a dealer do for the vendor and their rep (and thereby help themselves)? Begin by making the rep your friend. A business built on friendship is more enduring and profitable. Yes, as a retailer you should be willing to negotiate hard for everything, but do so with fairness and a sense of quid pro quo. When asking for concessions, co-ops, free goods, stock rotation or participation in a promotion, clearly justify and explain how the vendor will benefit as well.

Communication is Key

Retailers should be honest in communicating their needs and point of view, but they also must appreciate and acknowledge the vendor’s perspective. Doing so demonstrates your respect for the mutual relationship. If you as a retailer approach all subjects and demands from the perspective of your benefit alone, your vendors and reps will usually hold back where they can. The reverse is also true. Difficult vendors will not get the full support from their retail customers.

One of the most effective means of growing your business is to ask your vendors, “How can I increase my business with you?” This simple question can produce new interest from the rep and will lead to a dialog about sales growth. Not surprising, good deals, good discussions and productive promotions will begin to happen.

While retailers sometimes view beating down vendor reps as a sport and chuckle over how much they squeezed out of a specific vendor, in the long haul I believe these kinds of retailers are too short-sighted. Again, I want to be very clear: As a retailer you must negotiate hard and smartly with your vendors, but doing so with a spirit of shared benefit will yield greater profits for both of you. Retailers likewise are entitled to first-class treatment from their vendor reps, but the smart retailer will start the process and cultivate the relationship by treating their reps with first-class respect and open, frequent dialog. You reap what you sow.

About the Author

Robbie Brown has an extensive background in retailing, wholesaling, distribution service industries and consulting.  He has been CEO of numerous companies in the shooting sports industry, including several retail chains and distribution companies. Brown consults for businesses of all sizes in both the merchandise and service industries, as well as for a variety of corporations, industry groups and trade associations. He is a frequent round-table moderator and speaker before industry trade shows, conventions and other corporate groups, and he has published more than 300 business-related articles in various trade magazines, delivered hundreds of speeches and served as a business advisor to many CEOs both inside and outside of the firearms industry.

Also see: Retail Operations for New Retailers

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