By: Todd A. McCormick, Owner of Keystone Climbing Consultants
Do you take advantage of a gas rewards program with your local grocery store? If you can get cheaper gas, why not?! Most vendors also have “rewards” that you can take advantage of, but of course, it looks different than a key fob that you scan before getting gas. If you aren’t taking advantage of these rewards, then you aren’t getting the most bang for your buck in your retail shop. Let’s look at the most common ones.
This means no minimum order quantity. The advantage of this is if you’re in a pinch and you need to order just one or two things from a vendor, you can! Some vendors impose minimum order quantities to make a delivery to your shop worthwhile. I work with a particular beverage distributor that has a $250 or 20 case minimum order quantity. They deliver for free, so that’s nice, but I can’t just order a few cases of something if I’m in a pinch. Companies that offer no MOQ are giving you an incredible amount of flexibility with when you place an order and how big they are. Take advantage of it when you need to!
Some vendors offer free shipping if you can hit a certain order threshold. Shipping eats into your margins, so pay attention to companies that offer this and whenever possible, get that free shipping!! Some vendors will offer free shipping on back orders. This is an incentive for you to keep items on back order, it guarantees them a future sale of those items, and helps them plan out the production of that item if they know they already have a certain amount allocated to some customers. I take advantage of this whenever I can, it just means having a system in place to keep track of your back orders if your POS software doesn’t have a PO tracking component. It’s never great to have an item on back order, forget about it, and place it on order again. Then when more than what you wanted shows up, you must figure out what to do with the extras! The simple way to avoid that is to just keep your orders organized.
Terms and Dating
The terms of an invoice simply states how you agree to pay. Are you paying by credit card, by check/ACH, in advance, COD, or getting dating. Some retailers prefer to pre-pay with a credit card when there’s no credit card fee. If you are good about taking advantage of a credit card rewards program, have at it! Other retailers prefer dating, which is usually worded as something like Net 30, which means you have 30 days to pay your invoice from the time the invoice is issued to you. If you have a discount negotiated in your terms, then it might be worded something like 4% 30/Net 31, which means if you pay within 30 days then you can subtract 4% from the subtotal (the discount rarely ever applies to S&H or added fees), and if your payment is after 30 days then you owe the full amount. If you are operating at 3 turns per year and have Net 120 terms (this is uncommon, usually terms are Net 30, Net 60, or at best Net 90), then you are turning your inventory before you have to pay for it. This is great because it’s keeping money in your bank account for longer until needing to pay for product that you’ve already sold. Cash is king.
Money Back Guarantee
It’s an important part of a retail shop to keep trying new products: it helps keep your displays fresh, it keeps your customers interest, and it allows you to try products that might experiment with new knowledge or technologies. I understand the hesitation, though, sometimes it can be a challenge to decide which new products you should try. Often vendors will offer a money back guarantee, and when they do this totally alleviates any heart palpitations you may get from trying out a new product. It removes all the risk! Want to try a new product? Go for it! If it doesn’t work out, just send it back to the vendor and get a refund. If a company offers a money back guarantee it’s also a nice feeling to know that they believe in their products enough that they are willing to take them back if they don’t work for your shop.
Swag for Events
Many companies will offer swag packages for events that you may host throughout the year. This promo product can help market that company, but also helps you bring some hype to your events. Usually it’s a certain percentage of what you purchased from them over the past year. For example, maybe you spent $10,000 with a company and they’ll give you 5% worth of goods at retail cost for events. Now you have an event coming up and you can help promote that event by posting on social media that you’ve got $500 worth of prizes to give away from company X.
One of the best ways to sell products is to have staff using the products you sell. Not only will they recommend products that they use themselves to your customers but your customers will also see them using the products and it’ll give the customers confidence in buying those products. Many companies offer pro-deals, sometimes through third party sites, sometimes directly through them. The pro-deals give your staff a chance to buy the products you sell in your shop at a great discount, usually around wholesale price. Get your staff decked out in the gear you sell and watch sales of those products soar!
Whether it’s a gas reward program at your local grocery store, a companion fare program with your favorite airline, or a toy with your kids’ meal… we all love added benefits! Take advantage of these benefits with the vendors you work with to make your retail shop as profitable as possible. Don’t be afraid to reach out to your vendors with questions about any of these benefits. They need YOU to be as successful as possible so that they can also be successful, what’s good for you is probably good for them too!