A livelihood for any wholesaler or distributor relies on getting their products into the retail environment. Cameron Bayley gathers tips from those in the know about how to get some edge over the competition.
“It’s not brain surgery, being a good wholesaler,” says Brad Glass, who distributes golfing apparel line PING for American Golf Supplies. “You’ve just got to create a point of difference between you and your competitor.”
While the time-honoured practice of hitting the pavement and selling your goods to as many retailers as possible is still as much a part of the process as ever, there are other channels that can be used to make you and your product stand out. Here are 10 ways you can maximise your wholesale deliveries.
1. Product Development
If you’re doing the hard yards to get your product into the retail space, it pays to be passionate about it, and confident that there’s a market out there for it.
Even though Chris Lambert, general manager of Russell Corp Australia, distributes well-known sporting names like Spalding and Sherrin, there are bigger names out there and plenty of competition from new names and brands, so a commitment to his products is very much a part of his role in getting retailers to take his wares. “There’s no doubt that product is key,” he says. “You’ve got to have great product development. You’ve just got to show a little bit of innovation, you’ve got to show market relevance and trend relevance as well.”
“If you don’t have a product that people want, don’t start up,” says Glass. “You’ve actually got to do some homework before you jump into the wholesale industry.”
2. Approaching Retailers
When approaching retailers, Glass says it’s not merely a case of walking in and asking how much they want, it’s letting them know you’re aware they have overheads and their own margins to make, and you can help. “I try to sell myself as a business partner, rather than a wholesaler,” he explains. “And they like that, the idea that you don’t just want to go and sell them stuff just for the sake of selling it.”
David Schwartz, who runs Shanghaied, a wholesaling company distributing a range of homewares and antiques, says your reputation is crucial to retailers. Being reliable, having a good quality product, delivering on time, are all factors wholesalers can focus on to ensure retailers will come back to them.
“Do what you say you’re going to do,” adds Glass. “Any industry in this country tends to be quite insular, they tend to be quite small, so people find out very quickly who the good guys are.”
3. Maintaining Your Client Base
It costs more and requires more effort for wholesalers to attract new customers, so holding on to your client base will save you money. Avoid the “leaky bucket syndrome”, Schwartz warns, where you pour all your customers in at the top, and then through poor management let them slowly filter away. His Shanghaied clients are entered into a database which keeps detailed records of all transactions. “Every contact we have, such as telephone or fax, is monitored,” he explains. He also makes sure if they haven’t spoken to major customers for a while, they make a conscious effort to get in contact so they have the latest information and offerings.
4. Online Retail
While big distributors with a network of representatives and a large on-the-ground presence might not use the web to distribute their goods, Glass admits smaller wholesalers and distributors can find it a useful tool.
For the Shanghaied team, it has become invaluable. “We now have a secure website that has all our product range,” says Schwartz. Current and prospective customers are given access to the full content of the site, which includes all details, descriptions, and prices of the Shanghaied catalogue. And as retailers become more comfortable ordering goods online, the website will offer them a fully functioning ordering system. “So, for those people, particularly regional people who might not see sales agents that often, they can order online,” he explains. The company advertises the website in trade publications and mass media, and for any consumers who end up at the site there’s a list of retailers that stock his products.
Lambert advises any wholesalers contemplating having an online presence to realise what commitment is involved before launching into it. “How often will you update it? How will you keep people interested? How are you going to get repeat visits? If you’re not going to answer those questions to begin with, then I don’t think you should be considering it,” he says. “Ponder what you’re doing it for and why, and how it will be managed in the long term.”
5. Customer Contact
While Schwartz is a big fan of the web for wholesaling, he knows it should only play a part in a wholesale strategy. “You can’t isolate and forget about customers who aren’t as computer literate, and who don’t feel comfortable going on the web. You need that personal contact as well.”
While Shanghaied has a small team of in-house sales representatives operating in Melbourne, to cover the rest of the country they use independent sales agents who work on commission, representing a small number of similar businesses.
Twice a year the company produces a full-colour catalogue, published to coincide with major trade fairs. “It would be lovely just to go to the website,” says Schwartz. “But for retailers to be able to talk to their staff, and sales people, a colour catalogue showing the product is very helpful.”
“The quality of your sales people is pretty crucial,” says Lambert. “You want people who are experienced and, ideally, who know the customers well. Already bringing a pre-existing relationship is worth that little bit extra.”
6. Retail Environment
Retail markets are becoming more intertwined as niche markets pop up and retailers are trying to accommodate consumers with multiple demands, as well as trying to maximise their sales per square metre. Knowing how to fit within these markets can be a challenge. “What is relevant to us is having a meaningful position in the marketplace when the world is getting smaller and all of the business segments are becoming more and more blurred,” says Lambert. “Fashion stores are putting in sports brands and sports stores are putting in a bit of surf and a bit of street.”
This can make it harder for any wholesaler and distributor to enter, he says. “So for us, we’ve got to decide what we stand for and ensure we’re damn good at it, then convince customers of it and deliver to it. That’s our biggest challenge.”
For Schwartz, this changing retail environment can also mean more opportunities for some wholesalers, such as those in the gift and homewares industry. “Nurseries used to be the sellers of fresh plants, but now with issues like the drought they’ve had to look at different retail streams. Certainly now the cafes, and gift and homeware stores, are flourishing within nurseries.”
7. Margin Trading
Margins are a big part in wholesaling, and this can be crucial in getting your products into the retailer. Schwartz admits the rising costs of freight and other business expenses means there’s always pressure on finding products which offer both consumer appeal and deliver a good margin.
Glass agrees: “You need to be conscious of what margin your average retailer needs to make
and you need to be offering them a better than average margin if you’re a fringe brand.”
8. Wholesaler Industry Help
While there’s no broad assistance available for wholesalers in general, individual industry associations can be a great help. “You’re mad not to be involved for at least the information they provide,” says Lambert, a member of the Australian Sporting Goods Association (ASGA). “The ASGA provides the only industry stats, and so you’re crazy not to subscribe and get that information.” With ASGA providing publications on various issues relevant to the industry, such as counterfeiting, it is helpful to stay abreast of industry trends.
Schwartz, a member of Gift and Homewares Australia (GHA), agrees, and says GHA offers business partnerships in areas such as freight, insurance and telecommunications, which can help members keep costs down.
And the web is a limitless source of inspiration and guidance, says Lambert, especially in researching what is happening in your industry and in others. “There are just so many different avenues for inspiration that you need to tap into.”
9. Trade Shows
Trade shows can also offer great opportunities for wholesalers, and Lambert says they can vary in relevance depending on the industry. “If you’re a start-up business in an industry where the trade fair model is important, then, absolutely, you must be there,” he says. “If you’re small or a start-up, then it probably makes sense as one of the elements of your marketing mix to be there.”
Schwartz attends three trade shows a year, and says they are instrumental in the growth of his business.
10. Sales Strategy
Covering your market and getting into newer ones requires staying on top of trends in your industry and making sure you have a point of difference. “If you’re a smaller business you certainly need to think about what you bring to the table,” says Lambert. “Be it a new technology or a new look, or a higher margin, or that sort of thing; you need to bring a meaningful commercial argument.”
Using your advertising or promotions in a way that helps increase customer traffic can be a big help in persuading retailers to take your products, he adds, rather than just saying your product will convince current customers to switch brands. “The more you can actually say ‘I’ll bring people to your door through my marketing and investing in the consumer’, then that’s a good case as well.”
This can play a big part in your overall game-plan. “Understand who you are and where you sit in the game,” he says. “Then, with a great sales strategy and approach, you’re away—simple really!”
