Why is Vendor Management Important?

Dock Workers Loading A Delivery Truck For many small retailers, there are two types of vendors. Maglie Houston Rockets There are vendors who are even smaller than you are and seem to be completely disorganized and underfinanced. ray ban femme pas cher Joe Montana College Jerseys They seem to have little understanding of customer service and what you need, and when you take the time to lay it out for them in plain English, they will quickly explain why it can’t be done. nike air max 2017 femme noir

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  • If only they could deliver merchandise as quickly and consistently as they deliver excuses. Unfortunately, the one thing these vendors almost always have, in addition to excuses, is a killer item or line that you simply can’t live without. asics gel lyte 5 mujer verdes Or so you think. Air Max 2014
    asics gel kinsei mujer They may try to tell you that they are a brand you must have, but if that was the case they wouldn’t be a smaller vendor, they’d be a larger vendor. Then there are vendors that are larger than you. new balance flagship store milano gel lyte 3 Nike Air Max 2017 Heren grijs They usually have a brand name that they say you can’t live without, and are constantly reminding you of that. Canotta Boston Celtics Whether you can live without their products may be another thing altogether. New Balance 1600 hombre adidas riot 5 femme Their idea of customer service is that you will do it their way — their minimum lead times, their minimum order quantities, their payment terms, their returns policies. Andre Ethier Authentic Jersey New Balance Goedkoop Larger vendors will spend a lot of money building their brand. nike air max 2017 dames Building a brand has a lot of benefits, the most obvious being that it helps pull sales through the sales channels. Comprar Nike Air Max Baratas But just as importantly, it helps the vendor manage their inventory. Maglie Orlando Magic How so? Branding enables a vendor to build market leverage with their customers. If you need a particular vendor’s goods more than he needs you as a customer, he can dictate the terms of sale, including early booking programs, minimum quantities, and return policies. In this way, a vendor can stuff the channel, forcing inventory off of his books and on to yours. Whether the vendor is a manufacturer or an importer, he can manage his source of supply to his advantage, in order to minimize his costs, not necessarily to maximize his service to you. In any supply chain, inventory will pool with the weakest member of the chain.

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  • goedkoop nike air max 2017 So, with all that in mind, here are a few thoughts on managing your vendors:

    1. Your relationships with your vendors must be mutually profitable. Canotte New York Knicks Kanken Pas Cher It has to be a win-win. Nike Schoenen Goedkoop If it’s not, the terms of the relationship must be renegotiated. hogan outlet adidas gazelle femme haute You can be sure that if the relationship were not profitable for your vendors, you’d be hearing from them. If it’s not profitable for you, they need to hear from you.
    2. The profitability of your vendor relationships cannot be measured purely in gross profit percentage or gross profit dollars. Purdue Boilermakers Nike Air Max 2016 męskie Chaussure Asics Gel Noosa Tri 11
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    4. The true profitability of each vendor is measured in gross profit return on inventory investment.

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    8. What type of inventory investment do you have to sustain? How long are their lead times? How reliably do they ship on time? How consistent is the product quality? How frequently do they misship you?

    9. The only reason you are doing business with any given vendor is that you have been able to develop a market demand for their products in your store. carpe asics running cumulus The vendor may have spent bundles of money building their brand in the marketplace, but you have proven that customers will buy their products in your store. free run 5.0 rosso uomo In your store! And the proof is in your purchase orders to the vendor. The vendor doesn’t want to lose your account. Canotte Chicago Bulls You are a proven account in their eyes.
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    11. If they lost your business and had to find another account to replace you, they have no assurance that they’ll be able to do as much business with that new account as they’ve been able to do with you, despite their marketing budget. buy ffxiv gil kanken baratas Clemson Tigers Nike Heren And they know it! When you’re negotiating with a branded vendor, don’t be shy about insisting on what you need. fjällräven kånken big Most of the time you’ll get it!

    12. A small vendor who can’t perform is a small vendor who is likely to get even smaller. nike air presto hombre Whatever marketing initiatives they might have made to build a brand has likely been completely undercut by their operational failures, so their brand probably has a lot less value in the market than they’d like to think it has. Denard Robinson – Michigan Wolverines What is special about their item or line? Can you get it elsewhere? When you are negotiating with a smaller vendor, don’t settle for less than you need. Make it clear that you want to do business with them, that they are the vendor-of-record, but if they can’t deliver what you need you know other vendors who can. Kanken Big new balance 577 damskie
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    14. And, if necessary, don’t be afraid to move the business.

    15. Understand the difference between vendors who are pre-selling an item or a line before they manufacture or import it, and vendors who have goods on the floor or in the pipeline. Vendors who are pre-selling want to sell most, if not all, of an item or line before they have to commit to manufacturing or importing it in order to minimize their risk. Zapatillas Nike Air Max Baratas Avec Asics A noble thing, but if you give them a purchase order for an item they end up not manufacturing or importing because they didn’t take enough other orders, you’ll end up not getting the goods, while tying up your open-to-buy dollars in a dead purchase order and not being able to buy other goods. nike pas cher Nick Chubb Georgia Football Jerseys When you are negotiating to buy goods that are being per-sold, ask how much has been already purchased by other customers, and how much more needs to be purchased before the vendor will commit to manufacturing or importing it.
    16. If you are working with small vendors, perhaps even a home-based business, your costs of doing business with them will likely be higher than with other vendors. Fjallraven Kanken Sale For that reason alone, it’s probably a good idea to limit the percentage of business you send the way of these vendors. Still, there needs to be a compelling reason to deal with them at all, and that reason will probably have a lot to do with the intrinsic value of their products. If that’s the case, then be sure that you offset the higher cost of doing business with a higher than usual margin on their items.

    By proactively establishing your expectations, and holding each and every vendor to them, you’ll have the time and energy to focus on the really important things, like working with your customers and growing your business.

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