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The FIFA World Cup has seen wholesalers in football-crazy countries like the UK help retailers score more sales with promotional support themed around the prestigious tournament. The task of promoting manufacturers’ items is typically handled by distributors. Which brings us to the question: how is a wholesaler different from a broker/sales rep?
Creating your supply chain with wholesalers or broker/sales reps
When you are ready to get your products on convenience store shelves, you may consider a wholesaler or broker/sales rep. Each entity supports your sales efforts in different ways.
A Convenience store product sales rep/broker maintains a business relationship with you – the manufacturer – and acts as an active partner in selling your products. When you sign a contract with a sales rep/broker, you have to factor in his fees in your retail prices as the sales rep/broker may cost 5-7% of the retail price you have set. If you think this is a bit expensive, consider the service you receive in return. If you think this is expensive, think of the retailer network that is at your disposal. You also benefit from the active promotional initiatives the sales rep/broker takes on to present a compelling case of your product before retailers. A good source to check out is www.checkstandprogram.com. These guys are brokers, but with a twist, they can get your product into anywhere from 200 – 5,000 convenience stores immediately!
A wholesaler buys your products in large quantities directly from distributors or manufacturers. Wholesalers fulfill retailers’ requirements and have a more passive role in selling your products. You don’t pay them a commission or fee to get your products on convenience store shelves. Understandably, they don’t serve you actively in the way distributors do. Wholesalers concern themselves with supplying products to retailers at wholesale prices a little higher than the prices at which they acquired them. They may get discounts from distributors or manufacturers on high-volume purchases.
The value of a supply chain
The evolution of the supply chain has occurred because it is the most profitable way for manufacturers to convert raw materials into goods for the consumer market, and for consumers to buy the goods at low prices. Every participant in the supply chain offers a certain value.
Retailers can ignore distributor or wholesalers and go directly to the manufacturer. But they will miss out on the services of these entities, which in turn will lower the benefits they receive especially with regard to cost. Your large volume lots (intended for sale) are more than what retailers can handle. Not only will they need a huge retail space for storage, selling huge volumes of your product in a short time could become a huge challenge. A distributor’s warehouse facilities for storage and a wholesalers’ needs-based provision of your products works out better for retailers. A wholesaler takes care of the logistics, efficiently delivering your products to retailers. A one-off transportation of your products directly from your facility to the convenience store will no doubt be a logistical nightmare for the retailer.
Retailers will also need to compete with other retailers to get the manufacturer’s business, adding to marketing and outreach costs. In a nutshell, retailers find that sticking with convenience store wholesalers makes better business sense than going directly to the manufacturer.
Can you sell directly to convenience store wholesalers?
The supply chain for all companies is not the same. Typically, it looks like this :
Manufacturer ————-> Wholesaler —————-> Retailer —————-> Consumer
The entities in the supply chain may also operate in different ways, and may be referred to by a different name. For instance, some may call themselves wholesalers-distributors and offer promotional support, warehousing, transportation and more. They may send their representatives to retailers and communicate the price, quality and special offers you’re offering. Some also act as business partners by handling customer service for the manufacturer.
Different types of wholesalers exist. Merchant wholesalers are independently-owned businesses taking title to goods and taking on risks related to ownership. They resell products to retailers, other wholesalers or business customers. General-merchandise wholesalers have a wide mix of products but a limited assortment of products within the lines; general-line wholesalers carry few product lines but have a comprehensive depth within the lines; rack jobbers are full-service wholesalers who own and maintain display racks in convenience stores and supermarkets.
Getting the P.O
Whether you decide to take an order from a distributor/wholesaler, go about the process carefully. If you fail to make an informed decision, you may find yourself being short-changed or not get as lucrative a deal than if you had done your due diligence a little better.
Tell them about return policies, volume discounts and time to process orders. Be ready to negotiate pricing, delivery schedules, minimum order quantities and more. Make sure that whatever has been agreed upon is documented.
How to find convenience store wholesalers?
Locating c store wholesalers may not be a tall order if you know how to go about it. Here are some options you can explore:
1. A directory of convenience store wholesalers can give you all the information in one place.
Take a look at “c-store distributors directory” over at http://www.cstoredistributors.com.
2.The internet is the go-to destination to look up pretty much everything, and that includes convenience store wholesalers. You can search by product or zip code to find local or nationwide suppliers, but it is very difficult to get e-mails like the directory above.
3. If you have the time for it, attend a few trade shows where members of your industry gather to do business. You can look online to identify trade shows by location and industry.
4. Go through the classifieds and ads sections of trade magazines for wholesalers in your industry.
5. Inquire with your local Chamber of Commerce on local wholesalers operating out of your industry. You can also put in a word at a Small Business Development Center (SBDC). Talking to business acquaintances and seeking recommendations from knowledgeable people in your industry (non-competitors) may also be helpful.
6. You can consider letting a convenience store broker do the job for you. Look online, check the Yellow Pages and trade journals, or ask around for experienced brokers who can connect you with wholesalers in your industry.