Staying flexible and being able to set competitive prices is fundamental to small business so the Australian Competition and Consumer Commission (ACCC) has released a fact sheet outlining small business’s and retailer’s rights to do just that.
A Competitive Advantage
The resale price maintenance provision in the Trade Practices Act protects all businesses from having other businesses dictate the prices at which they can sell their goods.
“Resale price maintenance is illegal and occurs when a supplier sets, or tries to set, a minimum price below which retailers cannot on-sell its products or brand,” explains the ACCC.
“While it is not illegal for suppliers to specify an upper price limit, they cannot use any form of persuasion, pressure or influence to induce retailers to comply with a minimum price.
“Pressure for resale price maintenance can also come from the other side of the supply chain. Other retail customers may threaten to stop buying a product unless the supplier forces their retail competitors to stop discounting it. Despite this, if a supplier tries to enforce a minimum price on a product once it has been sold to a retailer, they are breaking the law.”
Essentially, resale price maintenance is illegal because it inhibits the ability of businesses, particularly small business retailers to respond competitively to the market, and in the long run will affect customers and other businesses in the supply chain.
According the ACCC there is a number of ways suppliers may try to specify a minimum price on goods sold to retailers. For example, they may threaten to cut off supply, supply on disadvantageous terms when compared with other similar resellers, try to write a term into a contract specifying a minimum price, or they may try to state a price which is understood to be the lowest price at which the product can be sold. In these instances, retailers can take advantage of the resale price maintenance provision in the Act.
“A common response made by suppliers when retailers question resale price maintenance conduct is that maintaining a certain price is important for a product’s prestige and reputation,” says the ACCC.
“While retailers cannot be prevented from selling goods below cost for a genuine clearance sale, suppliers may be within their rights to refuse to supply goods to retailers who have sold their goods at less than cost over the previous 12 months without permission or genuine clearance reasons. These retailers may not be genuinely competing on price but are using the goods to attract customers to other products.”
For more information contact the ACCC Infocentre on 1300 302 502 or visit www.accc.gov.au
Retail Resource
Romilly Jones’s Retailing: Secrets, Tips and Techniques is the latest all-round resource for potential and existing retailers wanting to improve their bottom line.
After finding a major gap between the expectations of customers and what retailers are prepared to deliver, Jones’s book attempts to narrow this gap.
“I wrote this book with the aim of assisting retailers and anybody with an interest in the retail trade of improving their performance and making retail shopping an enjoyable experience,” he says.
“In today’s complex and ever-changing marketplace, retailing is both an art and a science. To succeed and thrive, retailers must develop and maintain a clear-cut management focus.”
Offering a host of practical insights, Jones covers a variety of topics including what makes a successful retailer, building a winning retail strategy, retail selling, finding new customers, calculating profit and loss, mark ups and discounts, inventory management, customer service, merchandising, effective retail signage, low cost retail marketing ideas, price and perception, and key performance indicators.
“To build a winning retail strategy, potential retailers should formulate a strategic business and marketing plan backed by viable, practical and easy to implement steps that lay the foundation for long term profitable growth,” says Jones.
Retailing: Secrets, Tips and Techniques is published by Martin Books. To order a copy visit www.sydneybusinesscentre.com
Calendar
Gift and Homewares Australia (GHA)
19 – 22 February 2005
Sydney Showground, Sydney Olympic Park
More than 650 exhibitors will showcase their wares from a variety of product categories at the GHA trade fair. Ranging from fashion accessories, gourmet edibles and clothing apparel to garden accessories, bridal and aromatherapy, retailers can see what’s hot in gifts and homewares.
GHA provides free coach and ferry shuttles to the venue as well as 600 free car spaces for visitors each day of the show.
Complimentary tea, coffee and water as well as plenty of seating offers a relaxed environment for retailers to do business.
GHA is a trade-only fair. For more information visit www.agha.com.au or email fairs@agha.com.au for shuttle details.
Fashion Exposed
6 – 8 March 2005
Sydney Exhibition Centre, Darling Harbour
As one of Australia’s largest all-encompassing business events for the fashion industry, Fashion Exposed will be held in Sydney for the first time, showcasing a broad range of Spring/Summer apparel from more than 400 Australian wholesalers and designers.
A boutique designer showcase, ‘preview’, will again run in conjunction with Fashion Exposed where more than 70 designers will be showcasing their Spring/Summer collections and targeting high-end fashion boutiques.
For more information visit www.fashionexposed.com or www.preview.net.au
Crime Stoppers
Shoplifting costs Australian businesses around $810 million a year, according to the Australian Institute of Criminology (AIC).
In a recent report, Preventing Retail Theft, the AIC suggests the following measures businesses can take to reduce the risk of shoplifting:
Consider store layout and presentation—racks, shelves and other displays should not be cluttered and should be kept tidy where practical. Orderly displays make it clearer when merchandise has been removed. They should be of a suitable height so they don’t block sales assistants’ views of the store.
Exits should be visible to staff.
Merchandise, particularly more expensive or desirable items, should not be placed too close to exits. These should be displayed in locked cabinets, in empty boxes or dummy items should be displayed instead.
Use electronic or ink tags and take measures to secure tag-removal devices.
Ensure staff are vigilante. Display a sign in a prominent location stating bag checks may be conducted, however remember these need to be voluntary.
Card Fraud Prevention
The National Retail Association recently published tips for retailers to protect against credit card fraud. It suggests retailers should consider the following:
Take extra precautions to validate orders
Be wary of orders that come from free email services
Be wary of international orders—try to validate the order before shipping to another country
Be wary of larger orders—fraudsters don’t care about how much it costs because it’s not their card
Contact your financial institution immediately if you suspect fraudulent activity
Ask for more identification if you are suspicious
Be wary of a customer who wants to use multiple cards
Check the security features on the card
Know your merchant agreement with your bank
Train your staff effectively and as far as possible, limit the number of staff who handle cards, such as selected permanent staff
Keep security in mind when purchasing point of sale equipment
Don’t be rushed or intimidated
Don’t accept a mobile phone as a contact number
Don’t divulge customer information to anyone
For more tips on preventing crime on your business, a crime prevention kit, Small Business: is your business secure? is available online at www.crimeprevention.gov.au
Heaven On Earth
Retail suppliers can rejoice thanks to a new breed of
retail service provider, Retail Angels. The brainchild of Lexie Henderson-Lancett and Gillian Corban, Retail Angels is proving to be the saving grace of suppliers and the department stores they stock across Australia.
Through their work with stationery company, Corban and Blair (Henderson-Lancett as sales manager and Corban as owner), the duo saw selling in department stores was not living up to it’s potential. They found a gap in the flow of information between suppliers and department stores, with product information for sales staff being somewhat limited. The result was under performing sales, impeded by the lack of knowledge available to floor staff.
Retail Angels work on behalf of suppliers to get past this information lapse and improve the sales within large stores like David Jones and Myer. The company acts as a kind of sales representative contractor, providing product knowledge that may be missed out on in larger stores due to a lack of communication between the buyers and the sales assistants. Angels visit stores Australia-wide armed with information about the supplier’s products, sales figures and training techniques for sales staff to implement when pitching to customers.
Starting with Corban and Blair as their first supplier two years ago, Henderson-Lancett and Corban were impressed at the boost they achieved in their sales figures. Retail Angels continues to grow, with eight staff across Australia, most of which are mothers wanting to keep abreast of the working world, and seven current suppliers.
Although normal sales representative tasks such as stock filling and merchandising are taken care of, training is also an important part of the package that Retail Angels provide for suppliers. In-store sales staff are taught how to recognise different customer types and appropriate methods of selling to these consumers. In addition to this, Angels show how to interpret the sales results and how sales can be boosted even further.
Aside from the merchandising and training the Angels provide, Henderson-Lancett believes it’s important for employees to establish a rapport with the floor staff and give them any support they may need with regards to the product. “We want to acknowledge that they have a very important role to play in our product. We’re not just taking over their role,” she says.
Henderson-Lancett also believes the balance achieved between the supplier and the department store is attributed to the level of professional communication they have managed to achieve in interactions between both parties. Angels have become an intermediary between supplier and store, with both groups preferring to resolve issues through Retail Angels rather than deal with each other directly.
Having filled a gap in the market, the duo plan to evolve by adding to their list of services, including offering coaching to sales and department heads, as well as building their client base.
With her market research background Henderson-Lancett is also keen to look more closely at the behaviour of supplier’s products, such as who is buying them and in what stores. She believes that by building on their current success they will be able to offer more beneficial services to their clients. “We will provide them more opportunities to expand their knowledge on how their product is performing in the marketplace,” she explains.
