A friend of mine was on an airplane once and struck up a conversation with a fellow businessman. They were talking about, well, business, and this other guy told my friend,
“No matter what kind of business you’re in, a lot of what you do depends on going into or coming out of Christmas”.
The more you think about it, it’s true. My friend had a wholesale lumber business at the time and did not think the holidays really applied to him, but he started thinking more and more about how they should. He could very easily fine tune his marketing to cash in on the money changing hands during and because of Christmas. That’s the key.
Christmas comes once a year, and it offers an opportunity to look upon your business in a fresh way. Retailers ought to see it as the same kind of thing as a Grand Opening. Even if you sell summer garden supplies wholesale, if you don’t take advantage of the buying mood Christmas affords, you really ought to have your head examined.
Years ago in retail, having a well-stocked store was crucial for the holidays. Retailers did not worry about putting everything on sale—this was the time of year when you had captive shoppers who simply had to buy something. So it was also a time of year retailers made profits.
Wal-Mart and online shopping have changed that—this is why you see so many sales going on from Black Friday (the day after Thanksgiving) up to Christmas, maybe New Year’s Day. But it is still crucial for a retailer to have the goods even if they are not making as much margin on them, because how the retailer appears during the holidays will affect return traffic for the rest of the year and into the future.
Think about the chaos that happens during this time of year. If a retailer is running out of best selling goods, if he or she is short staffed, mismanaged in any way shape or form, how do you think the customer is going to react? What will the customer think of this store in April, August, or even next holiday season? Any fool can see that being on your toes during the holidays is going to pay dividends, just as it would during a Grand Opening.
Face it: a lot of retailers ARE in a chaotic state of affairs during this season. It separates the men from the boys. If you arrive at the Super Bowl and fumble in the opening drive, throw interceptions in the second quarter, lay down on defense in the third quarter, and generally poop out because you’re out of shape in the fourth, you are not going to win. But if you’re prepared, you win both in retail and in the Super Bowl.
The holiday season is the Super Bowl. You have all year to realize this. Don’t fumble!!!
Wholesalers and Sales Reps need to be on their toes too. How? The best way is to accommodate the winners you have as accounts who are preparing properly for this time of year. And go a step beyond accommodating them, train and educate them as well.
Here are the ways how:
Marketing Materials
· Right Way: have your catalogs, brochures, whatever you use for lead generators or informational needs, ready to be sent out by September 1st. I know, you’re complaining about department stores putting Christmas decorations out before Halloween. But think about that: do you think they expect shoppers to shop that early? Not really: but they do want to tell those shoppers that they, the store, is prepared. The same thing happens with priming your accounts in September and October. If they receive a new catalog and start preparing early, they will be better prepared when the customer crunch comes in late November. A store full of customers in late November is not the time for a retailer to be doing a thorough order for your products and lines. He should be free to wait on customers and nothing else.
Smaller, fill in orders can be done in November and December, but to do those, the retailer must have an idea of what’s moving, and he/she’ll have a better idea of what’s moving if they base that on a large stock order done earlier in the fall.
· Wrong Way: catalog and brochures released December 1st. You’re playing catch-up at this point. If you get orders, they will be done with half attention, half effort on the part of the retailer. Mark your calendar in June of next year to be on time (September) for having your print materials ready.
New Products
· Right Way: similar to your marketing material, have these ready to go in September. Some industries, like fashion, show products at trade shows almost a year in advance for large chains to buy in time for the holidays (or, for that matter, other seasons). Rolling out new items early gives accounts plenty of time to order them and get a read well before Christmas.
· Wrong Way: releasing any time after November 1st. This is not the time of year for market research and moving planograms around to accommodate something new. The movie industry can get away with Dec. 24th release dates, but odds are you can’t.
Sales Calls & Meetings
· Right Way: sales calls and meetings relating to the holidays should be held well in advance. For major chains, summer, maybe September at the latest. If you are a rep selling to wholesalers, you want to prep them so they are ready to meet with their accounts at that time, so your meeting may occur in the Spring or a year in advance. However, support staffs for major chain stores generally have slow schedules in the weeks around the holidays, and if a meeting concerns matters and issues for the coming year, that could be a good time to schedule a sales call.
· Wrong Way: any time after mid November for individual stores is a bad time to impose your presence on a retailer. That’s when they should concentrate on customer service, not listening to your spiel.
Shipping Schedule
· Right Way: have plenty of order pullers and shipping staff trained to the max to handle the extra business you should be receiving. Step it up a bit—if your usual in house time is three days, make it two. Come out with a schedule and notify all your accounts and reps (and you reps notify accounts too) to get orders in by a certain date to get shipments by Christmas week. Have warehouse personnel constantly monitor what is in house—no orders piled up in the “to do” tray. If there is a stack of boxes labeled for a particular account sitting for more than one day they should know exactly why—credit issues? Awaiting prepay? It should be shipped if there is nothing holding it back.
· Wrong Way: blasé attitude like it’s just another time of year. Giving some problem issue to someone else to do—in other words, all employees, if a customer or rep calls in wondering what is taking so long for an order, don’t give it to someone else to do. As Ross Perot once said, “If you see a snake, kill it. Don’t wait for some meeting to discuss the issue or think someone else will do it.”
Since the trend of holding huge holiday sale events at retail became vogue, the December holidays for smaller retailers have come close to disappearing…but many of these independent retailers are finding the period after the holidays to be just as important, if not more so. Reason? Gift Cards is a big part of it. But as a sales rep or wholesale vendor, be aware that “the holidays” can be considered to be a longer period now…almost Halloween to Valentine’s Day.
Anything that generates foot traffic at retail should be taken seriously, and the holiday season is the most traditional event of this type. Another, more recent phenomenon of traffic generation is the “tax free weekend” many states have adopted in order to encourage sales of school supplies/apparel (Texas started this) to hurricane season preparation (as in Louisiana). Even if a retailer does not sell the goods that qualify for tax free status, they can and should join in on the fun. When you think about it, saving 8% sales tax is not a big deal—would anyone respond to an 8% sale”? Yet they do, and many retailers go beyond 8% to attract shoppers. These events have whetted the appetite of shoppers so much that neighboring states (like Oklahoma) had to stage their own “tax free weekends” because local merchants were sick of seeing migrations to Texas every year at that time.
This shows the importance of that lemming-like mindset shoppers can possess with events like this. So why treat the Christmas holiday season like it is any other time of year? You know traffic is going to increase, you know customers are going to shop (and they will shop for items for themselves as well as gifts). They will be in the mood to spend money, no matter how dire the economy, and they’ve done so for 2010 years! It’s the Super Bowl, don’t fumble!
Prepare for this season and help your accounts prepare for it. It is the most crucial traffic generating time of year and no opportunities should be wasted.
Wednesday, December 8, 2010
Friday, October 29, 2010
Reasons Reps Fail
If this economy hasn’t taught us all anything, we really are doomed for failure. Nobody, no company, (and certainly no government) can survive by continuing to spend money they don’t have, or continue to always do “business as usual”. Being in a drastically changing business has given this writer front row seats to witness just how and why businesses, companies and yes, even independent sales reps fail.
Being an independent rep is still a great way to operate your own business…be your own boss…and write your own ticket for success. But like any other vocation, one can get lazy and complacent…can get stuck in a routine and be blind to changes going on around them. Here are some of the common pitfalls my past colleagues or competitors fell prey to and are, as a result, no longer independent sales reps:
Thinking vendors are your sole source of identity: What this means is that you, as a rep, tend to think that your vendors are your reason for being and are your strong point, your main source of value. Of course, vendors you represent are your source of income. But think about it for a minute: why are you valued as a rep? It’s also because of the network of customers and relationships you have. It’s your expertise in getting product placed in accounts. Why do you think vendors ask you to rep for them in the first place? It may be because you have other vendors that compliment their product line, but it’s mostly your relationships with customers they are after.
Allowing this balance between your customer relationships and vendor relationships to go too far toward the vendor side is dangerous. About fifteen years ago many vendors in the industry I am in started using a large rep firm that was looking to expand into other territories. Vendors were presented with a choice by this rep firm: your existing rep or us. Many existing reps lost those vendors, in some cases myself included. I took two actions as a result:
· I started re-examining the other vendors I already had, and vowed to work them a bit harder now that I had more free time, and
· I looked for other new vendors in slightly different product lines that would appeal to my customer base.
Some of these new vendors worked out extremely well. Some were vendors that large rep group also had, but that they were overlooking and not working!
Other reps who’d lost these lines made appointments to meet with the vendors that fired them at subsequent trade shows to basically beg back for their jobs. This would wind up being a waste of time, because oddly enough, many of those vendors would go out of business within a few years! The jilted reps would have done much better by looking for new lines at the trade show, or attending other trade shows to look for new product lines that could appeal to their customer base.
Besides wasting time asking for their territories back, these jilted reps were also presenting themselves in a bad light. Think about it, if someone is fired at any type of business, what image does the fired employee project when they go back to the company and ask for their job again and again?
Relying too much on one big account: big accounts are desirable but to sit back and rest on one big account or a few fairly large ones is dangerous as well. In economies like this, many of these types of accounts are always looking for favorable deals, lower prices…and product that may very well be those other than yours. And let’s not forget that big account could go belly up or be sold to another company who will be now making decisions outside of your territory.
A smart move when you find yourself in a situation where your business is heavily weighed in one account is to use the earnings from the commissions earned to try to expand into other territories, other account types, picking up a few new lines that can redirect you accordingly. Get into more small accounts…and then from there you can possibly move into another big account that you’ve never had a chance to sell before.
Another tactic is to try to get other product lines into that same account—not other brands of the same type of goods, but other goods entirely. Is the account a retailer that sells a multitude of product types? Most do nowadays. Are they a distributor catering to a certain industry? They have to be diverse to make money these days, so why not take advantage of your relationship with the account by selling them something else….this leads to the next point,
Relying too much on one product type: some reps see themselves as selling only widgets or microthingies—they carry tons of lines on that one product type thinking that will last them forever and they will be able to hand it down to their grandchildren. Think again.
Reps that I was competing with or selling alongside of a decade ago when one particular type of product (in our case, t-shirts) were the big commission earner, are now gone. They are selling cars or real estate or something else. They relied too much on one particular product rather than keeping their eye out for other trends that would appeal to the same customers…and better yet, in turn allow them to do business with new types of customers.
Thirty years ago it was thought people would buy phonograph records, or at least recorded music, forever. The head of the retail chain I was working for at the time had a good analogy, and it applies to sales reps as well as it does retail. He surmised that our chain was going to get involved in selling and renting video movies, where most of our competition was resisting. He said “we sell entertainment, that’s why we’re going to try selling video, whatever it takes”.
The analogy was this: in the 1930s, the railroads passed on developing and investing in interstate truck transport. They said “We’re railroads, that’s what we do, we’re not into hauling product over highways”. Last time I looked there is really only one major corporation hauling freight by rail these days: BNSF—the letters standing for decades worth of mergers that resulted in one last standing. But there are many trucking lines hauling freight over our highways—and doing a better job of getting stuff to us because not every storefront or warehouse backs up to a set of rails.
“Record” retailers that realized they sold entertainment instead of just recorded music have survived because they got into video, then video games, and any other entertainment trend they could. Those that did not, have disappeared. It’s also interesting to note even those later retailers that picked up on video when the record stores did not, but then subsequently painted themselves into a corner by not diversifying, they too are disappearing—been to a Blockbuster lately?
Nokia started out a century ago selling toilet paper…now they are one of the world’s cell phone manufacturers! So there is a lesson here. Don’t restrict yourself as a rep that only sells one kind of product. You never know how long it will last, or even if it will last at all.
You’re only as good as your last recent sale..or the ones that will be your future sales: some reps had moments of glory then they just coast along without keeping up with trends and keeping an eye out for opportunities for the future.
If you keep hearing requests from customers for product that isn’t really out there or is being offered by a competitor that isn’t keeping up with demand, get on the phone and talk to some of your trusted vendors about the opportunity that’s being ignored.
Once you’ve landed a successful sale to an account, keep up with it. Keep looking for ways to make it better. Don’t let the product get stale. Don’t let the success go to your head.
There’s probably no better example of success gone stale than the Dallas Cowboys football team. In spite of having a talented team, they continually fall way short of the kinds of success they had 15 years ago. Seeing their frustrations on the field you can’t help but feel they just don’t have the hunger required to have a championship winning team anymore.
Spending money like a drunken sailor: if you can work out of your home, why are you renting office space? If the ad you placed is not getting any quality leads, why have you continued to advertise in that magazine or website for years? If you can get around in a smaller car, why are you driving a massive SUV? If there are 20 companies out there that offer phone, internet etc service at competitive rates why aren’t you at least renegotiating with your present provider? If hardly any of your lines bother to exhibit at a particular trade show anymore, and you have not found any new quality lines at that show in years, why do you bother flying to it and renting car and hotel room—to say nothing of spending a whole week wasting time there? Cut out the fat and quit spending money like a congressman. It’s not necessarily how much money you earn, it’s how much you keep.
Summing it all up, hopefully most reps can survive this economy and emerge even stronger when it improves. Lesson learned: Stay hungry as a rep! Grow your business by expanding your customer base as well as expanding the portfolio of lines you can sell. Keep your eyes out for new opportunities—for new things to learn and profit from.
Being an independent rep is still a great way to operate your own business…be your own boss…and write your own ticket for success. But like any other vocation, one can get lazy and complacent…can get stuck in a routine and be blind to changes going on around them. Here are some of the common pitfalls my past colleagues or competitors fell prey to and are, as a result, no longer independent sales reps:
Thinking vendors are your sole source of identity: What this means is that you, as a rep, tend to think that your vendors are your reason for being and are your strong point, your main source of value. Of course, vendors you represent are your source of income. But think about it for a minute: why are you valued as a rep? It’s also because of the network of customers and relationships you have. It’s your expertise in getting product placed in accounts. Why do you think vendors ask you to rep for them in the first place? It may be because you have other vendors that compliment their product line, but it’s mostly your relationships with customers they are after.
Allowing this balance between your customer relationships and vendor relationships to go too far toward the vendor side is dangerous. About fifteen years ago many vendors in the industry I am in started using a large rep firm that was looking to expand into other territories. Vendors were presented with a choice by this rep firm: your existing rep or us. Many existing reps lost those vendors, in some cases myself included. I took two actions as a result:
· I started re-examining the other vendors I already had, and vowed to work them a bit harder now that I had more free time, and
· I looked for other new vendors in slightly different product lines that would appeal to my customer base.
Some of these new vendors worked out extremely well. Some were vendors that large rep group also had, but that they were overlooking and not working!
Other reps who’d lost these lines made appointments to meet with the vendors that fired them at subsequent trade shows to basically beg back for their jobs. This would wind up being a waste of time, because oddly enough, many of those vendors would go out of business within a few years! The jilted reps would have done much better by looking for new lines at the trade show, or attending other trade shows to look for new product lines that could appeal to their customer base.
Besides wasting time asking for their territories back, these jilted reps were also presenting themselves in a bad light. Think about it, if someone is fired at any type of business, what image does the fired employee project when they go back to the company and ask for their job again and again?
Relying too much on one big account: big accounts are desirable but to sit back and rest on one big account or a few fairly large ones is dangerous as well. In economies like this, many of these types of accounts are always looking for favorable deals, lower prices…and product that may very well be those other than yours. And let’s not forget that big account could go belly up or be sold to another company who will be now making decisions outside of your territory.
A smart move when you find yourself in a situation where your business is heavily weighed in one account is to use the earnings from the commissions earned to try to expand into other territories, other account types, picking up a few new lines that can redirect you accordingly. Get into more small accounts…and then from there you can possibly move into another big account that you’ve never had a chance to sell before.
Another tactic is to try to get other product lines into that same account—not other brands of the same type of goods, but other goods entirely. Is the account a retailer that sells a multitude of product types? Most do nowadays. Are they a distributor catering to a certain industry? They have to be diverse to make money these days, so why not take advantage of your relationship with the account by selling them something else….this leads to the next point,
Relying too much on one product type: some reps see themselves as selling only widgets or microthingies—they carry tons of lines on that one product type thinking that will last them forever and they will be able to hand it down to their grandchildren. Think again.
Reps that I was competing with or selling alongside of a decade ago when one particular type of product (in our case, t-shirts) were the big commission earner, are now gone. They are selling cars or real estate or something else. They relied too much on one particular product rather than keeping their eye out for other trends that would appeal to the same customers…and better yet, in turn allow them to do business with new types of customers.
Thirty years ago it was thought people would buy phonograph records, or at least recorded music, forever. The head of the retail chain I was working for at the time had a good analogy, and it applies to sales reps as well as it does retail. He surmised that our chain was going to get involved in selling and renting video movies, where most of our competition was resisting. He said “we sell entertainment, that’s why we’re going to try selling video, whatever it takes”.
The analogy was this: in the 1930s, the railroads passed on developing and investing in interstate truck transport. They said “We’re railroads, that’s what we do, we’re not into hauling product over highways”. Last time I looked there is really only one major corporation hauling freight by rail these days: BNSF—the letters standing for decades worth of mergers that resulted in one last standing. But there are many trucking lines hauling freight over our highways—and doing a better job of getting stuff to us because not every storefront or warehouse backs up to a set of rails.
“Record” retailers that realized they sold entertainment instead of just recorded music have survived because they got into video, then video games, and any other entertainment trend they could. Those that did not, have disappeared. It’s also interesting to note even those later retailers that picked up on video when the record stores did not, but then subsequently painted themselves into a corner by not diversifying, they too are disappearing—been to a Blockbuster lately?
Nokia started out a century ago selling toilet paper…now they are one of the world’s cell phone manufacturers! So there is a lesson here. Don’t restrict yourself as a rep that only sells one kind of product. You never know how long it will last, or even if it will last at all.
You’re only as good as your last recent sale..or the ones that will be your future sales: some reps had moments of glory then they just coast along without keeping up with trends and keeping an eye out for opportunities for the future.
If you keep hearing requests from customers for product that isn’t really out there or is being offered by a competitor that isn’t keeping up with demand, get on the phone and talk to some of your trusted vendors about the opportunity that’s being ignored.
Once you’ve landed a successful sale to an account, keep up with it. Keep looking for ways to make it better. Don’t let the product get stale. Don’t let the success go to your head.
There’s probably no better example of success gone stale than the Dallas Cowboys football team. In spite of having a talented team, they continually fall way short of the kinds of success they had 15 years ago. Seeing their frustrations on the field you can’t help but feel they just don’t have the hunger required to have a championship winning team anymore.
Spending money like a drunken sailor: if you can work out of your home, why are you renting office space? If the ad you placed is not getting any quality leads, why have you continued to advertise in that magazine or website for years? If you can get around in a smaller car, why are you driving a massive SUV? If there are 20 companies out there that offer phone, internet etc service at competitive rates why aren’t you at least renegotiating with your present provider? If hardly any of your lines bother to exhibit at a particular trade show anymore, and you have not found any new quality lines at that show in years, why do you bother flying to it and renting car and hotel room—to say nothing of spending a whole week wasting time there? Cut out the fat and quit spending money like a congressman. It’s not necessarily how much money you earn, it’s how much you keep.
Summing it all up, hopefully most reps can survive this economy and emerge even stronger when it improves. Lesson learned: Stay hungry as a rep! Grow your business by expanding your customer base as well as expanding the portfolio of lines you can sell. Keep your eyes out for new opportunities—for new things to learn and profit from.
Thursday, August 5, 2010
Is This The End Of Brick And Mortar Retail?
This week, two bits of news hit the streets—actually, most people got the news hitting their screens, since that’s where they get their news now…and that’s a good clue as to the theme this article will take.
The two news items were these:
· Amazon announced that book download sales (i.e. for their Kindle or other electronic readers) surpassed sales of hardback books on Amazon.com
· Barnes & Noble Booksellers, with 720 brick and mortar locations, has announced it’s up for sale, citing the crossroads it finds itself at with the rising prominence of electronic books mentioned above…
We can learn a lot from the failure of most music retailers who did not adequately prepare themselves for the decline and demise of physical recorded music products…and from what may be B&N’s smart move to get out while the getting’s good.
Retailers will be the main beneficiaries of such lessons but those that support or make a living from dealing with retailers, can learn from these events as well.
It doesn’t matter what type of retailer we are talking about. Many brick and mortar retailers have online versions of their stores, and that’s good…but for those that don’t, they need to realize: Online retailers pose a threat to any brick and mortar location. Lucky will be those who work for a brick and mortar location in a company that also has a strong web presence…and they can switch their job over to that division of their corporation. But for those smaller businesses out there with no web presence or a weak presence online, this needs to be addressed.
Think about it: What makes someone shop at any particular store? There are a variety of reasons, but throughout history the biggest three reasons have always been:
· Location
· Selection
· Price
…and you know what Mr. Brick&Mortar Retailer? The web nails you to the wall in all three!
Location has always been dominant in these three factors. The biggest cliché in retail success formulas is “Location, Location, Location”. If your store was convenient to drive-/ride-/walk- to from the customer’s home or business, or between the two, your store had a distinct advantage. But now, the web beats you all the time, because the customer doesn’t even leave his house to shop!
Selection and price battle back and forth for second/third place. The selection on any web retail location is always superb—look at Amazon vs. just about anybody in whatever it is they sell. Price is the same way, the web can keep costs low and pass that savings along to the customer even if the customer has to pay a shipping and handling fee.
So what’s next, you wonder? Miles of empty storefronts? Possibly…but look around at the types of stores that seem to attract traffic. Notice anything?
For example, there seems to be a plethora of independent coffee shops even in the wake of the expansion and contraction of Starbucks. Almost all of these indies seem to be doing well. But nearly all of them host events like live music and open mic night almost daily. Starbucks didn’t do this as much. They sold exclusive CDs…but so what? Is that going to get you the customer out of the house, particularly when Starbucks usually sold the CDs on their web store as well?
Large specialty retailers like Michaels and Lowes hold seminars and classes on how to scrapbook, how to lay tile, any type of activity involving the product they sell, whether it’s hobby/craft related or having to do with home improvement. These events may not result in a customer actually buying anything at that time, but so what? It’s a form of marketing that a business must do to build its customer base.
Existing retailers must learn how to trick up their business by making their LOCATION a place to go, a destination to be yearned for by the customer. Retail Stores of the future will have to do a better job of enticing the customer out from behind his computer, into his garage, into his car and to drive several miles to get to that location! I’m not saying you have to hold “Ladies Night” like the local pickup bar does every Tuesday night…but as a theory, that’s not a bad idea when you think about it: Give single ladies heavily discounted or free drinks /food and that will entice more single guys who pay full price….plus, do it on the slowest night of the week.
This may mean more retailers are open later at night or longer hours on weekends to accommodate…so be it. If they try to trick up their SELECTION they run the risk of overstocking themselves and killing their turn on inventory and preventing open-to-buy dollars being available when they really need it, like the holidays.
If they try to trick up their PRICES they will slash their profit margins and go the way of many failed businesses in the past that thought PRICE was all that mattered to the customer. A smaller chain or independent retailer simply cannot compete on price with the likes of Wal-Mart, and whenever they attempt, they lose.
Support services and suppliers for retailers, such as sales reps, would be wise to keep an eye out for such opportunities to accommodate the “tricking up” of LOCATION. Don’t just push more SELECTIONs at “better” PRICES, because that will only result in the failure of the brick and mortar retailer to continue in business, or to continue to be a lucrative account.
If Support picks up new product lines or engages in joint venture with other companies that can accommodate just that kind of help to make the location a more desirable one, that will endear them to the retailer and expand upon the role from being a salesman/customer to teacher/student. We all remember good teachers with far more fondness than we do good salesmen, don’t we?
An example? How about the supplier of mugs, coffee makers and store fixtures for your typical coffeehouse becoming suppliers (and better yet, installers) of sound and audio equipment? Or, at least joint-venturing with a music store that does just that kind of installation? In return, that coffee-equipment supplier might be able to get some references from the audio technician of some of the churches, schools, offices, theaters he has serviced…and when this writer last checked, coffee machines are used a lot in all of those places-- so much so that the standard store-bought models often break down.
More and more, the retailer of the future will be providing a service, an entertainment if you will. If you have a retail store you should already have some way to sell online either by your own site or partnered up with Amazon or another web powerhouse. But you must make your store a better location/destination. If you are in any sort of retail support business, find ways to help keep your customers on this trend.
The two news items were these:
· Amazon announced that book download sales (i.e. for their Kindle or other electronic readers) surpassed sales of hardback books on Amazon.com
· Barnes & Noble Booksellers, with 720 brick and mortar locations, has announced it’s up for sale, citing the crossroads it finds itself at with the rising prominence of electronic books mentioned above…
We can learn a lot from the failure of most music retailers who did not adequately prepare themselves for the decline and demise of physical recorded music products…and from what may be B&N’s smart move to get out while the getting’s good.
Retailers will be the main beneficiaries of such lessons but those that support or make a living from dealing with retailers, can learn from these events as well.
It doesn’t matter what type of retailer we are talking about. Many brick and mortar retailers have online versions of their stores, and that’s good…but for those that don’t, they need to realize: Online retailers pose a threat to any brick and mortar location. Lucky will be those who work for a brick and mortar location in a company that also has a strong web presence…and they can switch their job over to that division of their corporation. But for those smaller businesses out there with no web presence or a weak presence online, this needs to be addressed.
Think about it: What makes someone shop at any particular store? There are a variety of reasons, but throughout history the biggest three reasons have always been:
· Location
· Selection
· Price
…and you know what Mr. Brick&Mortar Retailer? The web nails you to the wall in all three!
Location has always been dominant in these three factors. The biggest cliché in retail success formulas is “Location, Location, Location”. If your store was convenient to drive-/ride-/walk- to from the customer’s home or business, or between the two, your store had a distinct advantage. But now, the web beats you all the time, because the customer doesn’t even leave his house to shop!
Selection and price battle back and forth for second/third place. The selection on any web retail location is always superb—look at Amazon vs. just about anybody in whatever it is they sell. Price is the same way, the web can keep costs low and pass that savings along to the customer even if the customer has to pay a shipping and handling fee.
So what’s next, you wonder? Miles of empty storefronts? Possibly…but look around at the types of stores that seem to attract traffic. Notice anything?
For example, there seems to be a plethora of independent coffee shops even in the wake of the expansion and contraction of Starbucks. Almost all of these indies seem to be doing well. But nearly all of them host events like live music and open mic night almost daily. Starbucks didn’t do this as much. They sold exclusive CDs…but so what? Is that going to get you the customer out of the house, particularly when Starbucks usually sold the CDs on their web store as well?
Large specialty retailers like Michaels and Lowes hold seminars and classes on how to scrapbook, how to lay tile, any type of activity involving the product they sell, whether it’s hobby/craft related or having to do with home improvement. These events may not result in a customer actually buying anything at that time, but so what? It’s a form of marketing that a business must do to build its customer base.
Existing retailers must learn how to trick up their business by making their LOCATION a place to go, a destination to be yearned for by the customer. Retail Stores of the future will have to do a better job of enticing the customer out from behind his computer, into his garage, into his car and to drive several miles to get to that location! I’m not saying you have to hold “Ladies Night” like the local pickup bar does every Tuesday night…but as a theory, that’s not a bad idea when you think about it: Give single ladies heavily discounted or free drinks /food and that will entice more single guys who pay full price….plus, do it on the slowest night of the week.
This may mean more retailers are open later at night or longer hours on weekends to accommodate…so be it. If they try to trick up their SELECTION they run the risk of overstocking themselves and killing their turn on inventory and preventing open-to-buy dollars being available when they really need it, like the holidays.
If they try to trick up their PRICES they will slash their profit margins and go the way of many failed businesses in the past that thought PRICE was all that mattered to the customer. A smaller chain or independent retailer simply cannot compete on price with the likes of Wal-Mart, and whenever they attempt, they lose.
Support services and suppliers for retailers, such as sales reps, would be wise to keep an eye out for such opportunities to accommodate the “tricking up” of LOCATION. Don’t just push more SELECTIONs at “better” PRICES, because that will only result in the failure of the brick and mortar retailer to continue in business, or to continue to be a lucrative account.
If Support picks up new product lines or engages in joint venture with other companies that can accommodate just that kind of help to make the location a more desirable one, that will endear them to the retailer and expand upon the role from being a salesman/customer to teacher/student. We all remember good teachers with far more fondness than we do good salesmen, don’t we?
An example? How about the supplier of mugs, coffee makers and store fixtures for your typical coffeehouse becoming suppliers (and better yet, installers) of sound and audio equipment? Or, at least joint-venturing with a music store that does just that kind of installation? In return, that coffee-equipment supplier might be able to get some references from the audio technician of some of the churches, schools, offices, theaters he has serviced…and when this writer last checked, coffee machines are used a lot in all of those places-- so much so that the standard store-bought models often break down.
More and more, the retailer of the future will be providing a service, an entertainment if you will. If you have a retail store you should already have some way to sell online either by your own site or partnered up with Amazon or another web powerhouse. But you must make your store a better location/destination. If you are in any sort of retail support business, find ways to help keep your customers on this trend.
Friday, July 9, 2010
BIGGER Is Better--Oh, Really???
If bigger is better, why is it the dinosaurs are no longer around, but the small rodents, insects and microbes they shared the world with are?
We live in an age where big government bails out big businesses and banks that are “too big to fail”. Any idiot can tell you these bailouts just postpone the inevitable—that these businesses will go back to their failed way of doing things, will keep making mistakes and they will fail again, but who will be there to bail them out? Big government can change laws and pass bills that temporarily prolong the vital signs of these dinosaurs but they can’t change the laws of mathematics. They can’t spend money they don’t have or can’t get without thoroughly antagonizing the electorate…and they can’t print more money without suffering even more disastrous consequences in the form of inflation.
“B-b-but what are we supposed to do?” Let ‘em fail, I suggest. Let the cream rise to the top and let’s grow in a positive manner. General Motors would have been better off to fail, sell off divisions that they could (are you telling me Corvette couldn’t stand on it’s own alone as a brand when Ferrari can?) and let people who feel they can make things work right in a downsized world do what they must. Smaller, leaner, more efficient and able to turn a profit.
There’s ample evidence that the bigger a company gets, the more it chums up with the government. And there’s ample evidence the government is lousy at running most of what they attempt to run. Listening to members of Congress and other bureaucrats (most of whom have never balanced a budget or run a business profitably) grill executives from Wall Street and Toyota is laughable when you think about it deep and hard.
So what does this have to do with independent sales reps?
Let’s take vendor relationships for starters. An indie rep will try to add as many lines as he/she can, but with the realization the top 20% or so will account for about 80% of their income. So while it might seem that the rep is trying to be “bigger is better”, they know full well they can’t fully represent each and every line in their portfolio.
Vendors and reps should discuss things beforehand to get an idea as to how much business they can do together. The line a rep is taking on may be a huge potential source of commissions, or it may be a line the rep feels can only go into a few targeted accounts. It’s important to think about this on both sides. It’s important too that the small vendor realize that his line may be on a “reserve” status…but that the possibility may come someday when they have a product the rep can really cut loose with. Relationships may be forged that will pan out later. So long as the vendor can keep expenses low in the rep relationship (which is easy nowadays with websites and high quality images available online), the wait for the relationship to strike gold is worth it.
No matter how many lines a rep has, there will always be a select few that are, what the rep will feel, are the strongest. These may have popular trendy items, good perennial sellers, or the vendor may just provide a decent commission structure and have a great reputation for service. Ideally, these favored vendors will combine all of these attributes: “current hits”, great day-to-day bestsellers, timely and fair commissions and service that a rep doesn’t have to sweat over later on. It should be understood too that such a vendor would be morally well grounded and not have a reputation for backstabbing or otherwise ruining the relationship with the rep. If the vendor feels the need to end the relationship it will be done in a professional and open manner.
Here’s where the lure of “bigger is better” starts to threaten the rep—and any business. What if the rep has many lines, but tends to pay attention to a favored few that he or she thinks are great just because they are “big”? They have a lot of trendy product to sell, but they just so happen to be lousy at aspects like paying commissions and service.
In this case, the rep is writing orders mostly for those lines, yet waiting longer to get paid (if at all) and since the service is terrible, may only be getting paid for 40% of his work, since that is the fill-rate potential on these supposed “bigger is better” vendors. This happens quite a lot in many businesses.
Jonathan Knee, in his book Curse Of The Mogul discusses many of the mergers that have happened in the last several decades with media related companies. While many of these mergers looked great in theory and their CEOs (or “moguls”) promised the moon, very rarely did these new mega mergers make money for their shareholders, or provide better products or service to customers. The moguls and their close friends and colleagues (who you just know happen to hover around our nation’s capitol) are the only ones who make money in these deals because, in forming the merger, they specifically structure pay for executives with huge bonuses whether the company is profitable or not. A great example of such a failed venture was AOL/Time-Warner.
Remember the popular book The Peter Principle (Lawrence Peter & Raymond Hull, 1969)? This was the theory that in most businesses individuals would advance through the ranks but eventually hit their “level of incompetence”—in other words, they’d reach a point at which their limitations would become evident. From there they’d either get demoted or they’d remain in that position and cause everyone around them to work harder to compensate for the individual’s incompetence. Sound kind of like what we have today, on a grand scale, from President Obama on down…doesn’t it?
But not down all the way. There are many small businesses and sales reps out there that know their limitations and live within their means. A rep can take on many lines, but the beauty of being an independent sales rep is that he or she can use the weapons (vendor relationships) at their disposal and apply them in order to maximize their business at any particular time.
A rep that focuses too much on being “bigger is better”, by focusing in on dominating one particular product type, or on vendors who outwardly appear superior but are lacking in certain areas, will almost assuredly fail over the long haul. Focusing in on “small” or (as a better way to put it), lean and fit, means the rep can change course quickly. He can react to positive trends or little disasters that would otherwise go unnoticed or cripple a big lumbering dinosaur who would either take too long to react, or won’t be able to react at all because they are so entrenched.
In one of the Dirty Harry films, Clint Eastwood, after outwitting one of his foes and watching as that foe gets blasted to Kingdom Come, mumbles “A man’s got to know his limitations”. This is advice we as a society better start heeding…and it’s great advice for reps and the vendors they work with.
We live in an age where big government bails out big businesses and banks that are “too big to fail”. Any idiot can tell you these bailouts just postpone the inevitable—that these businesses will go back to their failed way of doing things, will keep making mistakes and they will fail again, but who will be there to bail them out? Big government can change laws and pass bills that temporarily prolong the vital signs of these dinosaurs but they can’t change the laws of mathematics. They can’t spend money they don’t have or can’t get without thoroughly antagonizing the electorate…and they can’t print more money without suffering even more disastrous consequences in the form of inflation.
“B-b-but what are we supposed to do?” Let ‘em fail, I suggest. Let the cream rise to the top and let’s grow in a positive manner. General Motors would have been better off to fail, sell off divisions that they could (are you telling me Corvette couldn’t stand on it’s own alone as a brand when Ferrari can?) and let people who feel they can make things work right in a downsized world do what they must. Smaller, leaner, more efficient and able to turn a profit.
There’s ample evidence that the bigger a company gets, the more it chums up with the government. And there’s ample evidence the government is lousy at running most of what they attempt to run. Listening to members of Congress and other bureaucrats (most of whom have never balanced a budget or run a business profitably) grill executives from Wall Street and Toyota is laughable when you think about it deep and hard.
So what does this have to do with independent sales reps?
Let’s take vendor relationships for starters. An indie rep will try to add as many lines as he/she can, but with the realization the top 20% or so will account for about 80% of their income. So while it might seem that the rep is trying to be “bigger is better”, they know full well they can’t fully represent each and every line in their portfolio.
Vendors and reps should discuss things beforehand to get an idea as to how much business they can do together. The line a rep is taking on may be a huge potential source of commissions, or it may be a line the rep feels can only go into a few targeted accounts. It’s important to think about this on both sides. It’s important too that the small vendor realize that his line may be on a “reserve” status…but that the possibility may come someday when they have a product the rep can really cut loose with. Relationships may be forged that will pan out later. So long as the vendor can keep expenses low in the rep relationship (which is easy nowadays with websites and high quality images available online), the wait for the relationship to strike gold is worth it.
No matter how many lines a rep has, there will always be a select few that are, what the rep will feel, are the strongest. These may have popular trendy items, good perennial sellers, or the vendor may just provide a decent commission structure and have a great reputation for service. Ideally, these favored vendors will combine all of these attributes: “current hits”, great day-to-day bestsellers, timely and fair commissions and service that a rep doesn’t have to sweat over later on. It should be understood too that such a vendor would be morally well grounded and not have a reputation for backstabbing or otherwise ruining the relationship with the rep. If the vendor feels the need to end the relationship it will be done in a professional and open manner.
Here’s where the lure of “bigger is better” starts to threaten the rep—and any business. What if the rep has many lines, but tends to pay attention to a favored few that he or she thinks are great just because they are “big”? They have a lot of trendy product to sell, but they just so happen to be lousy at aspects like paying commissions and service.
In this case, the rep is writing orders mostly for those lines, yet waiting longer to get paid (if at all) and since the service is terrible, may only be getting paid for 40% of his work, since that is the fill-rate potential on these supposed “bigger is better” vendors. This happens quite a lot in many businesses.
Jonathan Knee, in his book Curse Of The Mogul discusses many of the mergers that have happened in the last several decades with media related companies. While many of these mergers looked great in theory and their CEOs (or “moguls”) promised the moon, very rarely did these new mega mergers make money for their shareholders, or provide better products or service to customers. The moguls and their close friends and colleagues (who you just know happen to hover around our nation’s capitol) are the only ones who make money in these deals because, in forming the merger, they specifically structure pay for executives with huge bonuses whether the company is profitable or not. A great example of such a failed venture was AOL/Time-Warner.
Remember the popular book The Peter Principle (Lawrence Peter & Raymond Hull, 1969)? This was the theory that in most businesses individuals would advance through the ranks but eventually hit their “level of incompetence”—in other words, they’d reach a point at which their limitations would become evident. From there they’d either get demoted or they’d remain in that position and cause everyone around them to work harder to compensate for the individual’s incompetence. Sound kind of like what we have today, on a grand scale, from President Obama on down…doesn’t it?
But not down all the way. There are many small businesses and sales reps out there that know their limitations and live within their means. A rep can take on many lines, but the beauty of being an independent sales rep is that he or she can use the weapons (vendor relationships) at their disposal and apply them in order to maximize their business at any particular time.
A rep that focuses too much on being “bigger is better”, by focusing in on dominating one particular product type, or on vendors who outwardly appear superior but are lacking in certain areas, will almost assuredly fail over the long haul. Focusing in on “small” or (as a better way to put it), lean and fit, means the rep can change course quickly. He can react to positive trends or little disasters that would otherwise go unnoticed or cripple a big lumbering dinosaur who would either take too long to react, or won’t be able to react at all because they are so entrenched.
In one of the Dirty Harry films, Clint Eastwood, after outwitting one of his foes and watching as that foe gets blasted to Kingdom Come, mumbles “A man’s got to know his limitations”. This is advice we as a society better start heeding…and it’s great advice for reps and the vendors they work with.
Tuesday, May 11, 2010
Trade Show Do’s And Don’ts—How To Max Your Potential At Conventions
In a past blog we discussed how to find new leads. We didn’t touch upon trade shows, so we’ll do that here. Trade Shows, Conventions, Confabs, whatever you want to call them, can be a good way to find new leads/prospects/customers. They can also help an independent sales rep find more vendors to sell for….as well as other business opportunities.
You may attend a trade show that has a number of your vendors exhibiting. If you can offer your help by working their booth/booths for a shift or two, this may allow you to write some business during the show, perhaps find new customers. But anyone who thinks the value of a trade show is just in the business one can write-- there and then at that show-- is missing the point and not maximizing the potential a show can present.
The main purpose of a trade show is to make contacts and establish relationships and reputations. Better industry trade shows make a point of making that happen. Lousy trade shows make that difficult, or a hassle.
Let’s say you’re attending a show and have five lines that are exhibiting. You have booth duty at all five of them. During that time you can write orders…but be sure you are clear as to how much commission you make on show orders. If orders written are for customers in your usual territory, the vendor may give you all the commission. If not, they may split it to cover cost of the booth. If you write orders for customers outside your normal territory, you may have to split commission with the rep that handles that region. Whatever new leads you can keep (via follow-up work) after the show is over and beyond, try to get them. Remember the bold print in the beginning of the last paragraph.
You should reserve some time at such a show for you to be free to wander around and make connections with other potential vendors. Be sure to bring updated résumés with you. Many vendors openly advertise if they need reps. Unless you are sure as to their reputation, be wary of jumping into any relationship right there and then at the trade show. You want to check them out just as they would check you. Tell them you’ll talk after you all get back home.
You may find an opportunity to exhibit a variety of lines by renting a booth yourself at a show, or perhaps sharing a booth with a line that doesn’t mind splitting space with some of your other lines. This may present you with maximum potential in obtaining leads and prospective customers. It may limit your ability to wander the show to find new vendors…so tell your booth mates you will need a break or two each day to check out the rest of the show. Before you take such a break, see if you can study a printed show guide or online directory to scope out vendors whose product lines look interesting.
If you are renting your own booth, take advantage with any advertising or press release potential that you can. Prospective vendors, customers, other potential business relationships may come about because of this. That opportunity may be something you as a rep never even imagined, but the other party reading your press release or ad may think: “This is just the guy we need”, and give you a call with a proposal.
Be sure to bring plenty of business cards, brochures, handouts, whatever you can that can give a short synopsis of what you do. Hand these out to all passers-by and booth visitors…but do so at a price. The price for your handout? Their business card. And be sure their card has their phone, email, all applicable current contact info. You’d hate to get home and find out you can’t do any follow-up with this person.
Make your booth layout inviting, allowing customers to come in and look at the samples you have on display. In other words, tables or other furnishings should not block the front of the booth,. Once a prospect is in your booth, you may find they are easier to talk to; it allows you both to open up. From such beginnings, relationships develop. Remember that bold type in paragraph #3!
At many large trade shows, the industry’s heavy hitters will have enormous booths that may be completely enclosed, with a gatekeeper or guard-type person at the entrance. If you don’t have an appointment here, tough luck. What purpose does all that serve? If they are only at the show to meet with previous engagements, why attend the show? Those booths cost a lot of money—tens of thousands. They could do just as well sending reps, either in-house or independent, out on the road with a bunch of sherpas to lug their new product samples along, and visit those accounts’ home offices.
You may find shows that have a preponderance of such exhibitors may show a lot of foot traffic, but how much of this foot traffic are true potential customers? Are they retailers looking to grow their business? Or are they other industry types who want to do joint ventures or other “inside deals”? Nothing against the latter, but those kinds of relationships may be very limited and they may not include you as a rep.
There are vendors and reps that attend a trade show to write a bunch of orders, then ship them sometime after they get home, then gear up for the next show where the process is repeated. Sometimes those orders take months to ship, and you may find a lot of the samples exhibited at the show were not produced as part of the regular line at all, they were there only to gauge customer interest. If they did not get enough interest, they were not manufactured. This doesn’t sit well with customers that did order those items.
This bait and switch type practice is like a diet of doughnuts. They fill you up, give you a rush…but in the long run end up clogging arteries and killing you.
A trade show doesn’t end at the close of the last day. That moment is a beginning; to go back home and start establishing a steady relationship with as many of the contacts you made as you can. You are adding to your customer base—serve them well after the show and they will look forward to seeing you again the next show. Who knows? They may recommend you to people they know, those people attend the next show, and the process will repeat. This is the kind of repetition process you want, because it will eventually generate business all year long—between shows as well as during shows.
You may attend a trade show that has a number of your vendors exhibiting. If you can offer your help by working their booth/booths for a shift or two, this may allow you to write some business during the show, perhaps find new customers. But anyone who thinks the value of a trade show is just in the business one can write-- there and then at that show-- is missing the point and not maximizing the potential a show can present.
The main purpose of a trade show is to make contacts and establish relationships and reputations. Better industry trade shows make a point of making that happen. Lousy trade shows make that difficult, or a hassle.
Let’s say you’re attending a show and have five lines that are exhibiting. You have booth duty at all five of them. During that time you can write orders…but be sure you are clear as to how much commission you make on show orders. If orders written are for customers in your usual territory, the vendor may give you all the commission. If not, they may split it to cover cost of the booth. If you write orders for customers outside your normal territory, you may have to split commission with the rep that handles that region. Whatever new leads you can keep (via follow-up work) after the show is over and beyond, try to get them. Remember the bold print in the beginning of the last paragraph.
You should reserve some time at such a show for you to be free to wander around and make connections with other potential vendors. Be sure to bring updated résumés with you. Many vendors openly advertise if they need reps. Unless you are sure as to their reputation, be wary of jumping into any relationship right there and then at the trade show. You want to check them out just as they would check you. Tell them you’ll talk after you all get back home.
You may find an opportunity to exhibit a variety of lines by renting a booth yourself at a show, or perhaps sharing a booth with a line that doesn’t mind splitting space with some of your other lines. This may present you with maximum potential in obtaining leads and prospective customers. It may limit your ability to wander the show to find new vendors…so tell your booth mates you will need a break or two each day to check out the rest of the show. Before you take such a break, see if you can study a printed show guide or online directory to scope out vendors whose product lines look interesting.
If you are renting your own booth, take advantage with any advertising or press release potential that you can. Prospective vendors, customers, other potential business relationships may come about because of this. That opportunity may be something you as a rep never even imagined, but the other party reading your press release or ad may think: “This is just the guy we need”, and give you a call with a proposal.
Be sure to bring plenty of business cards, brochures, handouts, whatever you can that can give a short synopsis of what you do. Hand these out to all passers-by and booth visitors…but do so at a price. The price for your handout? Their business card. And be sure their card has their phone, email, all applicable current contact info. You’d hate to get home and find out you can’t do any follow-up with this person.
Make your booth layout inviting, allowing customers to come in and look at the samples you have on display. In other words, tables or other furnishings should not block the front of the booth,. Once a prospect is in your booth, you may find they are easier to talk to; it allows you both to open up. From such beginnings, relationships develop. Remember that bold type in paragraph #3!
At many large trade shows, the industry’s heavy hitters will have enormous booths that may be completely enclosed, with a gatekeeper or guard-type person at the entrance. If you don’t have an appointment here, tough luck. What purpose does all that serve? If they are only at the show to meet with previous engagements, why attend the show? Those booths cost a lot of money—tens of thousands. They could do just as well sending reps, either in-house or independent, out on the road with a bunch of sherpas to lug their new product samples along, and visit those accounts’ home offices.
You may find shows that have a preponderance of such exhibitors may show a lot of foot traffic, but how much of this foot traffic are true potential customers? Are they retailers looking to grow their business? Or are they other industry types who want to do joint ventures or other “inside deals”? Nothing against the latter, but those kinds of relationships may be very limited and they may not include you as a rep.
There are vendors and reps that attend a trade show to write a bunch of orders, then ship them sometime after they get home, then gear up for the next show where the process is repeated. Sometimes those orders take months to ship, and you may find a lot of the samples exhibited at the show were not produced as part of the regular line at all, they were there only to gauge customer interest. If they did not get enough interest, they were not manufactured. This doesn’t sit well with customers that did order those items.
This bait and switch type practice is like a diet of doughnuts. They fill you up, give you a rush…but in the long run end up clogging arteries and killing you.
A trade show doesn’t end at the close of the last day. That moment is a beginning; to go back home and start establishing a steady relationship with as many of the contacts you made as you can. You are adding to your customer base—serve them well after the show and they will look forward to seeing you again the next show. Who knows? They may recommend you to people they know, those people attend the next show, and the process will repeat. This is the kind of repetition process you want, because it will eventually generate business all year long—between shows as well as during shows.
Thursday, March 25, 2010
“Buyer” & “Sales Rep” = Loaded Terms
Time was, a buyer was a person who was an expert at the product he or she purchased for their company, website or store…and the salesman or saleswoman (sales rep) was someone who offered what was available from their company, possibly whittling down the selections to the best fit for the sale, and using persuasive tactics to drive the sale home.
Is that still the case? Not necessarily….
These attributes are still important for buyers and sellers to possess, but in today’s world it goes beyond that. In some cases the roles have reversed a little so that the buyer must also know how to “sell” the rest of his or her company on the way to move the product to their accounts, or consumers on the street. The sales rep has to know how to select the products the buyer is eventually going to cut a purchase order for…in other words, the rep becomes the buyer.
But with more large corporations adapting sophisticated systems that integrate purchasing, warehousing, distributing, re-stocking, and eventual sales on the floor or on a website, the buyer has to be an expert on all that. Therefore, the buyer delegates the “purchasing” part to the sales rep.
The buyer has to be familiar with
· Warehousing—should the items purchased be stocked in a distribution center or are they better candidates to be drop shipped to the point of sale? If warehoused, they should be packaged in a way that makes it cost effective for their order pullers to process.
· Distribution—one distribution center or more?
· Re-stocking—what are the minimums for reorders, and what’s the turn time they can expect in order to avoid empty shelves anywhere in the pipeline.
· How is the product packaged for sale? Does it conform to the buyer’s retail planogram or merchandising layout? If it is an online web-based sale, can the sales rep get his or her vendor to drop ship it directly to the customer who bought the item on the buyer’s company’s website?
Things like UPC codes and EDI (electronic data interchange) could tie all this together. This is where the computer systems from the buyer’s company and the rep’s company “talk” to each other and coordinate purchasing, distribution, re-orders, shipping notification, invoicing and payment.
You might notice how some companies will shift purchasing professionals within their company from one department to another. Some buyer who specializes in young men’s apparel may be transferred over to purchasing stationery and gift items for a few years, and then from there to purchasing shoes. Reason? Training for eventual upper management within the company is a likely explanation. Preventing too much of an “old boy network” may be another, albeit cynical, reason.
The purchasing professional, if they are smart, may take advantage this variety of experience and education and use it if they ever have to find work with another company…or perhaps leaving their job to do be a sales rep him- or herself!
One unfortunate outcome of this “rep becomes buyer” trend is that it is harder to enable a new innovative product to be offered first time to a large account’s buyer. The buyers don’t want to take chances unless the sale can be guaranteed somehow…and even that presents logistical challenges if the rep suggests the account send all the unsold items back to the vendor. Try coordinating that with multitudes of store personnel!
However, more progressive buyers (and companies they work for) may suggest a certain innovation to a company that can carry it off. But, these companies are few and far between on both sides of the equation.
Smaller independent accounts may be the ones willing to take risks on untried products…but don’t be surprised if they start adapting a more cautious stance like their bigger counterparts going into the future.
So if you, as a sales rep, think that the buyer will easily sort through information and pick winning items like a pro, think again. That could very well be your job. If you have enough smaller accounts, or even other big ones, that have given you a good picture of what items sell for your line, that is important knowledge that the buyer may not have. He or she, as a buyer, wants you to be the buyer so he or she can do all the other stuff they are expected to do.
Is that still the case? Not necessarily….
These attributes are still important for buyers and sellers to possess, but in today’s world it goes beyond that. In some cases the roles have reversed a little so that the buyer must also know how to “sell” the rest of his or her company on the way to move the product to their accounts, or consumers on the street. The sales rep has to know how to select the products the buyer is eventually going to cut a purchase order for…in other words, the rep becomes the buyer.
But with more large corporations adapting sophisticated systems that integrate purchasing, warehousing, distributing, re-stocking, and eventual sales on the floor or on a website, the buyer has to be an expert on all that. Therefore, the buyer delegates the “purchasing” part to the sales rep.
The buyer has to be familiar with
· Warehousing—should the items purchased be stocked in a distribution center or are they better candidates to be drop shipped to the point of sale? If warehoused, they should be packaged in a way that makes it cost effective for their order pullers to process.
· Distribution—one distribution center or more?
· Re-stocking—what are the minimums for reorders, and what’s the turn time they can expect in order to avoid empty shelves anywhere in the pipeline.
· How is the product packaged for sale? Does it conform to the buyer’s retail planogram or merchandising layout? If it is an online web-based sale, can the sales rep get his or her vendor to drop ship it directly to the customer who bought the item on the buyer’s company’s website?
Things like UPC codes and EDI (electronic data interchange) could tie all this together. This is where the computer systems from the buyer’s company and the rep’s company “talk” to each other and coordinate purchasing, distribution, re-orders, shipping notification, invoicing and payment.
You might notice how some companies will shift purchasing professionals within their company from one department to another. Some buyer who specializes in young men’s apparel may be transferred over to purchasing stationery and gift items for a few years, and then from there to purchasing shoes. Reason? Training for eventual upper management within the company is a likely explanation. Preventing too much of an “old boy network” may be another, albeit cynical, reason.
The purchasing professional, if they are smart, may take advantage this variety of experience and education and use it if they ever have to find work with another company…or perhaps leaving their job to do be a sales rep him- or herself!
One unfortunate outcome of this “rep becomes buyer” trend is that it is harder to enable a new innovative product to be offered first time to a large account’s buyer. The buyers don’t want to take chances unless the sale can be guaranteed somehow…and even that presents logistical challenges if the rep suggests the account send all the unsold items back to the vendor. Try coordinating that with multitudes of store personnel!
However, more progressive buyers (and companies they work for) may suggest a certain innovation to a company that can carry it off. But, these companies are few and far between on both sides of the equation.
Smaller independent accounts may be the ones willing to take risks on untried products…but don’t be surprised if they start adapting a more cautious stance like their bigger counterparts going into the future.
So if you, as a sales rep, think that the buyer will easily sort through information and pick winning items like a pro, think again. That could very well be your job. If you have enough smaller accounts, or even other big ones, that have given you a good picture of what items sell for your line, that is important knowledge that the buyer may not have. He or she, as a buyer, wants you to be the buyer so he or she can do all the other stuff they are expected to do.
Thursday, January 28, 2010
Looking For New Markets To Sell? Go Shopping!
Economies change and a rep might find entire customer bases disappearing. The last 20 years have seen more changes in retail, buying traditions and markets than anything that had been seen in the previous 100 years.
Home computing and the internet is the reason, of course—consumers able to buy stuff at home via their desktop…but also because technology so radically changed the way things are consumed. Listening to music and taking snapshots are two examples where retailers set up to handle those activities—CD/Record stores and Film Processing centers, are no longer needed.
It’s important for a rep to constantly be adding lines, making relationships with new vendors. Even if the product a new vendor carries is not especially attractive to the rep right now, it may very well be in a year or so. This will enable the rep to morph into similar industries to those that he or she has now, but that are a bit more stable and will last longer than the markets threatened by change.
Make a point of shopping around…look at other retailers and think how they may use products you sell. Look online too—can that website add to their product offerings with any of your lines?
Shop beyond your immediate industry, or learn from other industries you sell to, to prepare yourself for the pitfalls you may encounter with that new category of wholesale customer you may be trying to win over. An example of this follows…
The licensed products industry, particularly in music related licenses, has lost a tremendous amount of account base in the last decade due to the decline in sales of CDs and other forms of recorded music. Listeners download or rely upon Amazon.com for their needs. So, where to turn?
Musical Instrument retail seems to be a good choice. The community constantly cries out they are in need of better margins, which licensed apparel, printed goods, accessories, collectibles provide. The problem is this: most of these retailers are not well-schooled in boutique-type merchandising techniques. So the challenge to the rep is not just to sell them some line or a few lines, that will sit there wasting away among a mass of guitars, amps, keyboards, cables and effects boxes…the challenge is to educate them as well on techniques in setting up a boutique area in their stores.
There is no better way to do this than the rep to share success stories with these musical instrument retailers. Look at some of your other retail accounts—the good ones. What do they do right? What have they tried that turned out to be wrong? What fixtures were most effective? What kind of employee are they looking for who can take care of that department? How labor intensive is it, and what are some ways to make it as little labor intensive as possible?
Luckily most of us in the licensing industry will come across a product sporting a tried and true brand or logo, and in my own case, this would be Harley Davidson. This is the perfect role model for musical instrument stores to follow; indeed I had one particular musical instrument retailer even tell me as much.
Thirty or forty years ago, the typical Harley Dealer sold motorcycles, did repairs, had a shop with some custom parts like exhaust pipes, gas caps, mirrors. Their motorclothes offerings may have just been a few leather jackets. In other words, the customer base was limited to riders and owners of Harley Davidson motorcycles.
Now, look at the typical HD Dealer today. The motorclothes department is a huge boutique that appeals to many beyond that biker customer base. It’s also, by the way, where the dealership makes the best margins of any product sold under its roof. There are apparel items and gifts for men, women and kids who may never ride a Harley their entire lives. What started out as leather jackets, then tee shirts, developed into an entire new variety of industries just to supply these motorclothes departments.
Many musical instrument retail stores today resemble the Harley dealer from 1970…there is little product in the store that will appeal to anyone beyond the musician. And the product that is there is low-margin by their own admission! The rep should share with the musical instrument dealer the things that a good Harley dealership does.
This musical instrument retailer is losing, and will continue to lose, customers in several ways if they continue just doing what they always have done by only courting musicians. Even if "musicians" is a category that grows among the population, that does not ensure this retailer's sales will grow along with it, and besides, he's leaving it to chance if or if not that category grows.
First of all, the starter musician—that 12 year old kid buying his first guitar—is likely to buy at Wal-Mart or Best Buy now. His mom is going to do the shopping and odds are she'll go the least expensive route. Or mom may buy it online, but point is, there are a lot more places to buy than there was years ago.
Another customer the dealer is losing or seeing less of is the collector. Time was that local musical instrument retailer could take in used guitars for trade and resale, and his local store was the place to look for vintage instruments. Ebay has outperformed that task. Not only that, but there may be other retailers thousands of miles away with kickass websites that compete for the same customer.
So to re-grow his customer base it makes sense for the musical instrument dealer to boutique his store with apparel, gifts, accessories and so on…to become a music related overall destination instead of just an instrument store for musicians. That girl who comes in with her rocker boyfriend and sits on a speaker cabinet filing her nails while her weekend warrior tests some new axe should be made into a customer. Offer her some cute shirts, jewelry items, whatever, but quit being a lounge for her!
Who knows? The new boutique customer just may decide to take up an instrument due to their experience in the store boutique…but they may never have visited the store to begin with had the new boutique area not been there. Or they may've come away with a negative impression like "Oh yeah the place I file my nails while Johnny Rockstar ignores me".
So get out and shop, and encourage your customers and prospects to do same. You’ll learn a lot as an independent sales rep…and you’ll be able to teach others. Ask anyone who their favorite teachers were and you’re likely to get a long list….ask anyone who their favorite salesman was and it will be a short list….
Home computing and the internet is the reason, of course—consumers able to buy stuff at home via their desktop…but also because technology so radically changed the way things are consumed. Listening to music and taking snapshots are two examples where retailers set up to handle those activities—CD/Record stores and Film Processing centers, are no longer needed.
It’s important for a rep to constantly be adding lines, making relationships with new vendors. Even if the product a new vendor carries is not especially attractive to the rep right now, it may very well be in a year or so. This will enable the rep to morph into similar industries to those that he or she has now, but that are a bit more stable and will last longer than the markets threatened by change.
Make a point of shopping around…look at other retailers and think how they may use products you sell. Look online too—can that website add to their product offerings with any of your lines?
Shop beyond your immediate industry, or learn from other industries you sell to, to prepare yourself for the pitfalls you may encounter with that new category of wholesale customer you may be trying to win over. An example of this follows…
The licensed products industry, particularly in music related licenses, has lost a tremendous amount of account base in the last decade due to the decline in sales of CDs and other forms of recorded music. Listeners download or rely upon Amazon.com for their needs. So, where to turn?
Musical Instrument retail seems to be a good choice. The community constantly cries out they are in need of better margins, which licensed apparel, printed goods, accessories, collectibles provide. The problem is this: most of these retailers are not well-schooled in boutique-type merchandising techniques. So the challenge to the rep is not just to sell them some line or a few lines, that will sit there wasting away among a mass of guitars, amps, keyboards, cables and effects boxes…the challenge is to educate them as well on techniques in setting up a boutique area in their stores.
There is no better way to do this than the rep to share success stories with these musical instrument retailers. Look at some of your other retail accounts—the good ones. What do they do right? What have they tried that turned out to be wrong? What fixtures were most effective? What kind of employee are they looking for who can take care of that department? How labor intensive is it, and what are some ways to make it as little labor intensive as possible?
Luckily most of us in the licensing industry will come across a product sporting a tried and true brand or logo, and in my own case, this would be Harley Davidson. This is the perfect role model for musical instrument stores to follow; indeed I had one particular musical instrument retailer even tell me as much.
Thirty or forty years ago, the typical Harley Dealer sold motorcycles, did repairs, had a shop with some custom parts like exhaust pipes, gas caps, mirrors. Their motorclothes offerings may have just been a few leather jackets. In other words, the customer base was limited to riders and owners of Harley Davidson motorcycles.
Now, look at the typical HD Dealer today. The motorclothes department is a huge boutique that appeals to many beyond that biker customer base. It’s also, by the way, where the dealership makes the best margins of any product sold under its roof. There are apparel items and gifts for men, women and kids who may never ride a Harley their entire lives. What started out as leather jackets, then tee shirts, developed into an entire new variety of industries just to supply these motorclothes departments.
Many musical instrument retail stores today resemble the Harley dealer from 1970…there is little product in the store that will appeal to anyone beyond the musician. And the product that is there is low-margin by their own admission! The rep should share with the musical instrument dealer the things that a good Harley dealership does.
This musical instrument retailer is losing, and will continue to lose, customers in several ways if they continue just doing what they always have done by only courting musicians. Even if "musicians" is a category that grows among the population, that does not ensure this retailer's sales will grow along with it, and besides, he's leaving it to chance if or if not that category grows.
First of all, the starter musician—that 12 year old kid buying his first guitar—is likely to buy at Wal-Mart or Best Buy now. His mom is going to do the shopping and odds are she'll go the least expensive route. Or mom may buy it online, but point is, there are a lot more places to buy than there was years ago.
Another customer the dealer is losing or seeing less of is the collector. Time was that local musical instrument retailer could take in used guitars for trade and resale, and his local store was the place to look for vintage instruments. Ebay has outperformed that task. Not only that, but there may be other retailers thousands of miles away with kickass websites that compete for the same customer.
So to re-grow his customer base it makes sense for the musical instrument dealer to boutique his store with apparel, gifts, accessories and so on…to become a music related overall destination instead of just an instrument store for musicians. That girl who comes in with her rocker boyfriend and sits on a speaker cabinet filing her nails while her weekend warrior tests some new axe should be made into a customer. Offer her some cute shirts, jewelry items, whatever, but quit being a lounge for her!
Who knows? The new boutique customer just may decide to take up an instrument due to their experience in the store boutique…but they may never have visited the store to begin with had the new boutique area not been there. Or they may've come away with a negative impression like "Oh yeah the place I file my nails while Johnny Rockstar ignores me".
So get out and shop, and encourage your customers and prospects to do same. You’ll learn a lot as an independent sales rep…and you’ll be able to teach others. Ask anyone who their favorite teachers were and you’re likely to get a long list….ask anyone who their favorite salesman was and it will be a short list….
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