Are Your Vendors the Good Guys or the Bad Guys?

In order to make sales (and profits) you need merchandise to sell. At the same time, you also need vendors from whom you purchase goods and, in some cases, enjoy support in marketing, promotions and problem resolution. Your vendors can be a valuable asset, but in other cases, they can be a major source of frustration and a potential impediment to sales.

But how can that be? Vendors are the good guys, the guys in the white hats. They provide the primary component for sales . . . inventory. But, like so much in business, it depends on the vendor, their policies, their pricing, their reps and their willingness to view your business as an important element of their own success.

In so many instances, the retailer has the option of purchasing merchandise from multiple vendors selling similar goods. The retailer can be equally successful selling either from vendor No. 1 or vendor No. 2. The best suppliers are those who don’t simply hand you “your program” but rather spend time with the dealer to understand their needs and marketing plans for the forth coming season.

The question both the retailer and vendor should be asking one another is “how can we work best together so as to profitably sell more inventory? The dealer should be speaking to the rep or sales manager and stating “we would like to sell more of your products; it’s good stuff. Now, how can we (the retailer) sell more of your merchandise?”

If the vendor says “just buy more,” that’s the wrong advice. The dealer should drive the conversation by asking questions about their product mix, price points and internal promotional offerings. Secondarily, the retailer should clearly itemize their needs from that vendor such as scheduled ship dates, promotional goods, closeouts, possibly unique make ups, markdown money if needed and point of purchase displays.

If you want a stronger relationship with any specific vendor then the dealer must be willing to supply a “quid pro quo” aka “tit for tat.” If you want more from your vendors, then be willing to give more in return.

Some suppliers can be very difficult, particularly if they have the current hot line. Their perceived position is “here is the deal . . . take it or leave it” or “you may buy the line provided that your opening order is $15,000 or more with shipping at our discretion.”

If the line in question is a must for your store, then you have little bargaining options. In these cases, just roll over and do the best you can. But fortunately, for most categories,  you have vendor options.

If both the reps and dealers appreciate that they both stand in the same bath tub together, they mutually stand to gain from their relationship. It is insufficient for the retailer to just treat the reps respectfully. The retailer should reach out to the rep and consciously work at creating a working relationship that will produce synergies.

By the same token, the door swings in both directions. Vendors and their representatives must do more than simply ask the retailer to buy their line. There are plenty of vendors and products to buy; the smart vendor strives to be a standout in terms of service, communication, pricing, promotion, delivery and programs that are tailored to help the individual retailer compete and excel.

While some retailers view beating up vendor reps as a contact sport and gloat over how much they squeezed out of a specific vendor, in the long haul they may be short sighted. Again, I wish to be very clear; retailers must negotiate hard and smart with their vendors but doing so with a spirit of shared benefit will yield greater profits for both the retailer and the vendor, provided the vendor practices the same attitude of common goal.

I would counsel dealers and vendors alike to put on fresh eyes in viewing their suppliers and dealers. In doing so, sales and profit growth will become the likely outcome for both parties.

Make it so!