Retailer Relationships

3 Times You Should Say "NO!" To A Retail Distribution Deal

I wish more vendors/brands were willing to say “no” to retail buyers because the deal didn’t benefit them.

For the ones who did say no to me and stated their reasons, I respected and admired it. One reason I would hear would be because the brand was afraid of deteriorating their brand and angering their more premium retailers. Obviously I’d try to work with them to come up with a solution that would preserve their brand equity and my plans for them in my assortment, but if we couldn’t reach a win-win agreement, I understood the reasons why and never faulted them for it.

I WISH more small vendors said “no” to me. Here are some occasions when vendors SHOULD have said no, but didn’t.

1) Vendors who were in no financial position to be doing business with a major retailer. For example, those who agreed to sell to Target but had to stretch themselves to fund production. Or those who could not handle the cash hold we placed on new vendors. Yes, retailers hold back some of your invoice payment (amount varies, but it can be as low as $5,000 or as high as in the tens of thousands) to cover chargebacks or other fees.

2) Vendors who would have to take a substantial hit on their margins and/or lower their wholesale costs much lower than they had planned. Desperation does strange things to people, include making concessions that would hurt their profitability and long-term sustainability. Stick with the margins you budgeted for yourself at the onset of your business. Rarely does it make sense to lower your wholesale costs too much. Because that margin will already be eroded by the unexpected costs of doing business with that retailer. So to start off with a deflated margin only hurts you long term.

3) Vendors who have an untested supply chain and/or little manufacturing experience at high volumes. Many vendors said “yes” to me and hoped for the best when production time rolled around. Hope is not a strategy. I’ve seen many vendors flop because they couldn’t get inventory to DCs in time because they failed to foresee certain hiccups, resulting in penalty fees for late delivery. Or other vendors would learn that their factories couldn’t produce consistent quality product at high volume levels and when those vendors failed quality testing, I’d kick them out of the assortment, leaving them with unsalable inventory. Nothing incurs more wrath from a buyer than poor execution.

So don’t be afraid to say no to retail buyers. It is not closing a door, but rather, a step towards building a long term relationship.

They’ll respect your sound business judgment and think more favorably of you as a future business partner. Credibility is in short supply in the vendor community. Saying “no” can build more credibility than you realize.

Update: December 2021 - Another time to say “no” to retail distribution is if you have not built enough traction on DTC first. By DTC, I mean your own e-commerce store (i.e., Shopify) and not a 3rd party e-commerce site or marketplace. DTC is a great way to establish proof of concept, as well as to collect performance metrics to give you confidence that your brand and products will sell well in the larger stage of retail. De-risk your brand and product line first on DTC before moving into retail.

How This Little Brand Made A BIG Impression With Target Senior Executives (Plus, 3 Actions That Earned Us A Future Commitment)

Last week, I attended meetings at Target for an organic skin care brand (different client from my Walmart trip).

This brand began selling to Target in April 2015. And they first brought me on with the request:

“Can you work with our sales rep to make sure we perform well at Target? And help us grow our shelf space?”

Their request stemmed from concerns that sales were too slow and they were afraid they would not be renewed for 2016. We immediately began digging into sales and coming up with a plan of action.

Simultaneously, Target invited this brand to submit for their big 2016 merchandising and marketing initiative, Made to Matter. This lengthy process included multiple rounds of consideration. Approximately 100 brands would be whittled down to just over 30 brands over several months.

Flash forward to mid-July. This brand scheduled two meetings at Target HQ:

  1. A line review with the category buyer and,
  2. Made to Matter final round pitch presentation to a cross-functional committee of 15+ executives.

How I Got An Order From Walmart in 20 Minutes (True Story!)

Last week, I was in Bentonville, Arkansas.

Have you ever been there? I haven't. And I was excited to go. Walmart and Sam's Club are headquartered in Bentonville and give the town its storied history.

I was there to lead the pitch to Walmart and Sam's Club for a client. It was such an interesting and positive experience that I knew I had to share it with you! Whether or not you intend to sell to Walmart or Sam's Club, this experience is still worth reading about. 

I'll start with the meetings. We had 3 Walmart meetings and 2 Sam's Club meetings. We met with both the Senior Buyers and Buyers for our categories. Within 20 minutes of our first meeting with a Walmart Sr. Buyer, we received a commitment for Feb 2016. My client laughs when she tells this story, but the commitment came so fast I didn't believe it. I actually asked the Sr. Buyer to clarify, "So when did you say you will be making decisions for the February assortment?". His response, "I just did. Your brand is in our assortment." OH! 

Trade Show Resource Roundup!

HERE IS A ROUND-UP OF RESOURCES TO HELP YOU CONTINUE YOUR MOMENTUM AFTER THE TRADE SHOW.

 

QUESTION: HOW DO I FOLLOW-UP WITH BUYERS POST-SHOW? 

Answer: Templates for follow-up emails and letters of introduction: http://www.retail-path.com/letters/

 

QUESTION: HOW DO I MAKE SURE I GET PURCHASE ORDERS AFTER THE SHOW?

Answer: http://buyerly.wordpress.com/2014/09/07/trade-show-faq-a-retail-buyer-came-by-my-booth-how-do-i-convert-that-into-a-purchase-order/

 

 

Lessons learned from West Coast Port Delays

As of today (Sunday, 2/22) West Coast ports are expected to come back to life. The backlog will reportedly take up to 8 weeks to clear. So the impact to importers and retailers will be felt long after the labor contract dispute ends.

While all my clients who import felt the pinch (more like 'crush'), some felt it more than others.

The companies that minimized the impact of port closures did so because they could:

  • Divert boats on water to the gulf coast ports (or be ready to pull that lever)
  • Leverage their safety stock in domestic warehouses (one client always keep 6 months of supply on hand)
  • Air ship some inventory as needed
  • Leverage their early (and heavier) orders placed in anticipation of Chinese New Year to fill the unexpected holes due to the port closure.

If I Have New Products Coming Out, When Should I Tell My Buyer

Don’t wait until your product is finished before telling your buyer you have new products in the pipeline. Take your buyer along as a partner during the development cycle. Get his/her feedback on the product positioning, packaging, pricing and styles before you place the first production order. Show your buyer a prototype – whether it is a CAD or mock-up. See if they are excited, lukewarm or hate it. And then find out why. (Tip: Buyerly.com is a resource for doing “market research” with retail buyers.)

Getting buyers on board earlier makes the subsequent sell-in process much easier since they have advised which changes would excite them and make your product “retail ready” in their stores. And I guarantee you that the idea you developed will have overlooked something critical to buyers.

I get the following question a lot. But what if they steal my idea? First of all, if you are already a vendor of theirs, they won’t steal it. Second of all, which scenario is better

I've Landed On A Retailer's Shelf, How Often Should I Check In With Them

Once you’ve landed on the shelf of a retailer, you should be actively managing your sales based on either a sell-through goal or sales expectations communicated to you by the buyer. And when things are looking good, you let them know and praise them (and consequently, yourself). When things are looking slow, you reach out with a recommendation for how you can help them improve sales. 

I Just Received an Order. What Do I Need To Do Now To Stay (And Expand My Brand) On Retailers' Shelves?

Yay! You got a new order! Celebrate and pat yourself on the back. Enjoy the moment, because now the real work begins.

Here are a few areas you will need to quickly focus on:

What is the Best Way To Manage Brick And Mortar Retailers Concerns About Online Retailers

Retailers are focused on developing their omni-channel strategies to stem their bleed of sales to online retailers such as Amazon. As companies selling to brick & mortar, you need to be sensitive to these concerns and offer assortment items that don’t undermine retailer’s efforts to defend their turf. Study up on this topic. Retailers have moved beyond “multichannel” and are now focused on omni-channel as the latest “hot” topic.