Often we feel that everyone is against us in our business. Customers demand lower prices, the cost of goods increase and many other hurdles are thrown at us in the race to success.
Well, you are not alone! Your vendor partners feel much of the same challenges and they want you to be successful. The more you sell the more they sell.
One of the most common areas where you and your vendor partner can work together is in close out buyouts. In this type of deal, you can get product up to 90% off regular cost. These are normally time sensitive and you need to make sure that the retail assigned to the product will move briskly through your registers while also creating excitement. No one person can tell you what the retails and reasonable margin should be. However, a good rule of thumb is if whatever retail is chosen excites you and your staff to purchase an item, it will most likely excite your customers to purchase it as well.
An additional way to generate some income is through partnering with your vendors on brand advertisement. Most companies want their name in your store. They have an advertisement budget that can help you pay for items such as billboards, coolers, promotions and incentives. Good retailers know this needs to be a win win situation, and vendors need to make profits too. When you allow a vendor to partner with you in a partnership that improves their business as well as yours, additional opportunities will come your way.
A huge but often over-looked area where a vendor can help your business is through innovation. When companies introduce new items usually there is an advertisement budget associated with this. Often, you can get paid to try these new product as well as receive additional benefits such as free initial or post fills. What many retailers like about free fills is that they have a 100% margin. If the item sells successfully, you can incorporate it in your set and if it's not selling, mark it down and sell it through. Either way it is pure profit.
As I written about before, you should talk to your representative and share with them what is important to your operation. If it is rebates, ask what kind of rebates you can get by buying and selling their items. Rebates could be easy money for what you are already doing. Discuss this with all of your reps, ask them about their programs and how you can join. Not every vendor will be available to help with everything, but some will be able to help with something.
Remember that opportunities such as these come to those retailers that are partnering with their vendors to drive profitability for both organizations.
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Editor’s Note: Schulte is teaching an educational session on how to harness the power of vendors at The NATSO Show 2013. Learn more about his session, Manage Your Vendors, on The NATSO Show education page. - AT |
Photo Credit: Ira Wexler/NATSO
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