When you’re a supplier or manufacturer trying to keep your business growing at a healthy rate, negotiating with retailers isn’t always as easy as you’d like. Obviously, it’s in every retailer’s best interests to run on the highest profit margins possible while putting in the least amount of work. This can often make it hard to ensure you’re getting the most out of the relationship. However, here are a few ways to ensure you’re not getting screw balled!
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Settle on Returns
Before signing anything and tying yourself into a trade agreement, make sure that you can guarantee an agreement on any returns. By and large, retailers will want to return any of the products which they can’t sell themselves, or that their customers have a problem with. This can often be pretty hard to protect yourself from for obvious reasons. Having said that, if you’re using a wholesaler they may be able to handle at least some of these returns for a minor margin increase. This will also mean that they’ll do everything in their power to keep returns to a minimum.
The Devil’s in the Details
To ensure the best possible relationship with the retailers you supply to, you need to have the final sign-off on all the different marketing materials, including point of sale information and staff training materials, about your product. Give a strong impression that you won’t tolerate any kind of misrepresentation of your product to the end customer. When looking through this kind of marketing material, make sure it all has the unique selling propositions and that the retailer hasn’t crow-barred in any kind of rootless tech specs (this happens more than you’d believe!). It doesn’t matter if you’re dealing in a commonplace food item or a specialized component like the Tedea Huntleigh 1042, having some sway over the way it’s being represented by the retailer is essential to a long, prosperous relationship.
If it’s at all appropriate, see if you can do anything to help the staff at the retail outlet to understand, and in turn market the product. Your customer will probably allow you to send them some literature to include in their staff training pack, or even send a rep from your company to give a briefing on the product if it’s necessary. There are retailers in certain niches who will allow sales incentives to their individual team members. However, this is often an expensive and bureaucratic feature, as the retailers are going to be making their own money from it!
See if you and your buyer can come to an agreement on them not reducing the price unless they have a product that’s somehow exclusive. Of course, you can’t really enforce this without breaking the law. Still, if it becomes apparent that they want to lower the price on your product, let them do so out of their own business’s margin. Even when the retailer says they want a lower price for the extra margin, it’s almost always a sign that they want to lower the street price!