Accounts Receivable Factoring: Definition, Benefits, Cost, How It Works
Whether you’re a new or established business, you know that having access to working capital is key to help keep your business running smoothly. You
Breaking into the world of retail can be a challenging experience. Planning ahead and building your network will be important factors in driving your success.
Breaking into the world of retail can be a challenging experience. Large retailers might grapple with over-saturation, debt, and intense online competition. Some of these same challenges apply to smaller retail businesses as well. In fact, in research conducted by Square, 72% of business owners concur that small businesses face more challenges today than they did five years ago. In the same way, retail vendors face many of the same obstacles.
Planning ahead and building your network will be important factors in driving your success.
In layman’s terms, a vendor is an individual or a company that offers a service or makes goods available to another company. A Coca-Cola bottler is a vendor to the local grocery store. A manufacturer who produces goods to sell to wholesalers are vendors to retailers. In the same way, a vegetable street vendor selling in downtown business districts is a vendor to customers.
Just like business owners, vendors need guts and grit to compete and succeed. There is no one type of person for the job, as most skills can be learned. However, most vendors are self-driven people who understand the basic principles of sales.
As a potential vendor, one of the most important things you can do is get to know the industry you represent. It’s not only vital that you know the industry, but also the produce, product, or products you’re selling. It’s fundamental that you can explain the industry’s potential for growth, the general state of the industry, and how your business model fits into the landscape.
Industry analysis is part of basic pricing options, market guidelines, and good management. Most of the people who successfully become retail vendors already have relevant business experience, sometimes as employees themselves. Understanding the industry and becoming a successful vendor means looking for a detailed list of features that includes:
The more you know about your industry, the more advantage and you will have.
Business goals are the actionable steps you need to take to grow as a retail vendor. Without goals, there is no measure of success. Of course, you can set high-flung goals that you have no way of meeting, or you can set reasonable goals—a step process—that will prove a successful outcome.
Are your goals bound by time? Business goals should be bound by time. Your goals may be specific, measurable, achievable, and relevant, but if you haven’t set a timeframe for reaching your goals, you may never get there. Ask yourself, do you want to reach your business goals in a month, a year, or in five years?
Production capacity, quality control, distribution logistics…these are all aspects of the business that you must carefully consider before letting a retailer know you’re ready for their order. If you cannot get the product on the shelves, or a faulty product is returned, you could irreparably damage a once-in-a-lifetime relationship. Your competition is waiting right outside the door.
One of the most common challenges that can cripple and sink a burgeoning company is financial difficulties. If you don’t have enough money to produce your product or even keep the lights on, you’re in trouble.
Avoid financial worries by planning for cash reserves or by having supply chain financing or invoice financing partners that can help you bridge any cash flow gaps you might experience between the time you fill an order and get paid.
Your relationships can either elevate your product to mass adoption, or add you to the long list of failed products. If you want to be the next iPod and avoid the fate of the Zune, you’d best start schmoozing with those who are most influential.
The purchasing managers of retailers are the ones to woo, and LinkedIn is one of the easiest and most effective ways to do so.
For every retailer that you want to form a relationship with, search LinkedIn and connect with its respective product managers. Prepare a short pitch that will impress them while keeping you and your products on their radar. Even if you’re not ready to make a sale yet, it will be much easier to approach the right people if they already have an idea of who you are. Better yet, walk into the retail establishment and introduce yourself. Taking the time for a face-to-face meeting can imply you mean business.
To make sure that you don’t falter when it comes time to fulfill those orders, make sure you are familiar with the retailer’s vendor portal. Vendor Portals help suppliers learn vital product information, pricing strategies, periodic updates, and much more. Each portal is a bit different so it pays to take the time to learn a portal well.
Another element for retail vendors to capitalize on is open vendor days. Many retailers hold these events to connect with new vendors, share information, and develop personal relationships. Take the time to prepare small presentations and product demos to show the retailer why they need to take you seriously and how well prepared you are for their business.
Before heading to the event, always prepare. Most major retailers provide an outline of requirements for vendors on their websites. For example, check out Home Depot’s guide:
If you are a new vendor, creating relationships with retailers will be one of your greatest challenges. Keep this is at the forefront of your strategy, but also be aware of where small vendors typically fail. Keep your company growing by seeking new retailer relationships, while soundly managing your finances to ensure your retailer vendor relationship is healthy, as well as lucrative.
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