Seeking Strong Vendor Partners

By Vesta Hartman Garcia

Retailing is a full-contact sport. The difference between eeking by and flourishing can often be in the hands of your vendors. New retailers find themselves feeling their way, guided by instinct and chance tips from old-timers, and usually unsure of what to expect from trading partners. Sometimes you have no choice but to work with a vendor, as when your customers expect to see a particular brand on your shelf. But often you will be choosing between multiple vendors in a category, and should be looking for certain points of differentiation that work to strengthen your position in the market.

You are not at the mercy of your vendors' policies. There are almost always other companies eager to become your vendor partner. Before you allocate precious floor space, ask the following questions and make sure you feel good about the answers you receive.

Customer Service

Is there a dedicated wholesale support staff? Your vendors should be easy to contact by phone, fax, and email. They should be ready and willing to support your needs in a timely manner, and with enthusiasm. You should feel that your vendors are working to ensure your success, as much as their own.

Feedback / Collaboration

Do they solicit your input on products? How? If there is no systematized way for you to collaborate on the products, service, and direction of the company, it is unlikely that your feedback is either desired or reliably implemented.

Availability / Delivery

Can they deliver what you need? On what timeline? Be sure that your vendors have the production capacity to meet your needs in a way that makes sense for your size and market. Your sales will suffer if hot product is unavailable when you reorder, or if minimums are so high as to be prohibitive.

Packaging

Is the packaging designed to drive sales at the point of purchase? The better the presentation of products, the less pressure there is on your sales staff. They can use all the help they can get to connect your customers with the right solutions.

Support Materials

Will they support your marketing efforts? Manufacturers focused on your success will provide professional product photos, POP materials, merchandising suggestions, and talking points. High quality vendor partners educate their resellers who educate consumers. Everyone wins.

Payment

Are there flexible payment terms? With many vendors now accepting charge and credit cards, payment terms aren't as critical as they once were. But the more options you have in method and timing of invoice payment, the more control you will have over your own cash flow.

Sales Channels

Does the vendor sell direct to consumers? Your strongest partner relationship will be with a manufacturer who is not competing with you for retail customers. You need to know that marketing dollars are being spent driving business your way, rather than toward the manufacturer's stores or website. In the internet age, every retail customer who purchases from the manufacturer is a retail customer lost to a reseller.

Pricing/Margin

Are you being offered realistic margins? Poor pricing policies can be a sign that the manufacturer is trying to slip wholesalers into their retail pricing structure. In general, manufacturers focused on wholesale distribution will build in margins that best serve their wholesale customers.

Brand Protection

Is the brand protected by the manufacturer? If you cast around and find current product being dumped on the market at rock bottom prices, there is a good chance that the manufacturer is not very choosey about opening reseller accounts. This will ultimately hurt your ability to move product at fair prices.

Guarantee

Does the vendor stand behind their product? A manufacturer's willingness to support their product is directly related to your ability to support their product. Your customers expect to receive high quality products with strong guarantees. You're the one they'll blame if they don't.

No relationship is perfect. But what matters most is that your vendors are focused on your success as a retailer. It may seem obvious to you that your success ensures your vendors' success. But I've seen too many manufacturers hamstring their resellers to recommend blind faith.

Editorial provided by Vesta Hartman Garcia. Vesta is president and founder of Ellaroo, a manufacturer of a range of baby carriers and bags (www.ellaroo.com). Having been pressed into manufacturing to meet her needs as a retailer, when she owned and operated Peppermint.com, she has strong opinions about both sides of the retailer/vendor relationship.