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.