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Business Insights from Andrea Hill

Your approach to and appreciation for vendor relationships plays a vital role in your success. Retailers who actively build product channels reap the rewards.

Nurture Vendor Relationships for Retail Success

17 January 2014

Software & Service Links

The links below are for services offered by Andrea Hill's companies (StrategyWerx, Werx.Marketing, MentorWerx, ProsperWerx), or for affiliate offers for which we may receive a commission or goods for referrals. We only offer recommendations for programs and services we truly believe in at the Werx Brands. If we're recommending it, we're using it.

When you're seated at a restaurant, hungry, enthusiastic about eating, you don't turn away the wait staff, right? You might ask for a few minutes to decide, but you don't put them off indefinitely.

When you go to the salon for a haircut or a blow-out, and they call your
name, you don't tell them to wait a while so you can finish a few tasks on your phone, do you?

When your pipes have burst and you've been waiting for the plumber for 36 hours, and he finally shows up at the door, do you send him away because you were just getting ready to serve dinner? No. You welcome him in.

Know Your Needs

Of course each of these examples is obvious. When we have a strong need, we don't ignore, put off, or avoid the provider of the goods or services who will fulfill that need. We schedule the time, we keep the appointment, or we clear the schedule to make sure these needs are met.

By definition, a retailer is a merchant who sells goods at retail.  Unless that retailer makes all the goods he sells, he needs to acquire them from somewhere. One can not merchandise with nothing, right? Of course, the retailer also must have someone to sell those goods to; the consumer. What I have observed is that most retailers in the jewelry specialty retail space are far more focused on who they sell the goods to than on from whom they acquire goods, and this leads to a serious lack of balance in the business.

The partnership between retailer and manufacturer/designer/distributor is one of the most important partnerships a retailer can have. Together the retailer and supplier create opportunities for the retailer to merchandise goods that consumers want to buy. Furthermore, the retailer should always be cultivating relationships and opportunities to learn about new, different, unique goods, because that is how the retailer can differentiate himself from other retailers and create ongoing excitement for his customers.

In too many situations, the retailer views the supplier as a nuisance, an interruption, or even an adversary, and not as the partner the supplier can and should be. There is a tendency to think in terms of "managing" vendor relationships and not "cultivating" vendor relationships.  But the best retailers - the most effective merchants with the most devoted clientele and the strongest growth trajectories - are building strong vendor relationships with current suppliers and actively seeking new vendors. When a vendor shows up unannounced, these successful retailers take at least a few minutes to see what is on offer. The small risk is wasting the 10 minutes it takes to recognize the products don't fit with the retailer's Merchandising Point of View. The huge risk is missing out on a merchandise opportunity that could have been dynamite.

Weak retailers feel relieved when merchandise sells, simply glad that it is gone. Successful retailers remain in contact with their vendors, placing immediate reorders to replace sold goods, but also responding to inquiries about current inventory positions and collaborating with their vendor partners to keep the merchandise offering fresh and balanced.

We all understand that the designers and manufacturers of jewelry need the retailers to carry the lion's share of the consumer sales. But I'm not sure we're all as clear that the retailers need the vendors just as much.  When the vendor relationship is undervalued, the result is the same as sending the waiter away instead of ordering, sitting in the waiting room of the salon instead of heading to the stylist's station, or sending the plumber away when he finally arrives.

Take a moment to evaluate your relationships with your vendors. If they are not as strong as they could be, invest in them personally or - if they're not the right partners to work with - find vendors with whom you can have a more productive, more profitable relationship. Stronger vendor relationships will help you meet the product needs of your business. This is vital, because those needs are very real and will ultimately determine your success.