The topic of the work of suppliers and wholesalers has been repeatedly raised on the pages of our magazine by Alexander Borodin, an expert in the sale of children's shoes, the manager of the Mila company.
In an interview with SR, Alexander told why difficulties arise, what are the mistakes in the work of suppliers with wholesale companies, and offered his own solution to the problem.
Alexander, what difficulties arise now in wholesale trade?
It's sad, but there are almost no wholesalers on the market now. Basically, these are small-scale wholesale firms that lose sales every season.
Since the beginning of the 2010s, it has become increasingly noticeable that there are too many children's shoes on the market. Manufacturers and importers produce and import more and more models. The market is oversaturated. There was a surplus.
Wholesale firms could no longer cope with increasing volumes, and many suppliers decided to ship goods to retail stores on their own.
As an example: a wholesaler could sell 100 pairs of the same model in a region. The manufacturer decided to increase the volume. Went to his customer (moved to low distribution level) and sold him 10 more. At first glance, total sales should increase to 110 pairs. But the buyer took 10 pairs from the supplier, he will not take another 10 pairs from the wholesaler.
Wholesaler sales will drop to 90 pairs. Total sales, it would seem, will remain the same. But in fact, total sales will also fall. This follows from one of the main laws of marketing: "The lower the level of distribution, the lower the sales."
It would be nice to stop here, but the situation repeats itself and gains momentum from season to season. There is a transformation of the market - wholesalers begin to leave the market, manufacturers - to take the place of wholesalers.
Is there any solution?
There is not a single supplier on the market that would keep the shipment rate at its level and did not try to intercept the target audience of wholesalers and retail stores. After all, many are present on the marketplaces. And, in fact, they turn the stores of their own customers into fitting rooms.
As soon as this process begins, it becomes more difficult to work with such a supplier, and the volumes fall to the minimum. Collaboration becomes uninteresting and, most often, simply ends.
When is the best time for a wholesaler to trade a brand name? Only at the initial stage of cooperation, when the supplier uses a wholesaler to bring his brand to the market. Then the services of the wholesaler are unclaimed.
Therefore, there is only one conclusion - to continuously look for and find new suppliers, new interesting products. And maintain the breadth and completeness of the range.
Our company has found a solution to the problem, we are one of the few who continue to successfully trade in wholesale. Let me tell you more about how we do it.
The idea of the Junited trademark arose, in fact, this is the idea of a large wholesaler. Its essence is that a large wholesaler, under no pretext, will be able to contact the target audience of the wholesaler.
We asked ourselves: how to do it? And they realized that the answer lies on the surface: it is necessary to determine the shipping rate.
To expand on this concept, I will give a simple example, just multiply by 10:
A consumer in a retail store buys one pair of shoes. Its shipping rate is 1 pair.
A retail store buys goods in 1 box, 10 times more.
The wholesaler, according to this logic, must purchase at least 10 boxes at a time from his supplier.
Obviously, the higher the shipment rate, the lower the price. This allows you to share risks, logistics costs and keep the trade margin at an optimal level. And, therefore, to get the maximum profit.
Today, all suppliers ship goods to wholesalers with a shipment rate of 1 box. The supplier becomes a wholesaler. And can only rely on the volume of sales of the wholesale company.
But if the supplier in the contract indicates that his shipment rate is higher than yours, then everything will fall into place. The supplier will forever become a partner, not a competitor, of the wholesaler. And will be able to build a long-term relationship with him.
Are there any bonuses for new partners?
Yes, but we understand that wholesalers need time to see and evaluate the prospects of a solution. And time to check the relationship with the supplier. Therefore, we invite new partners to carry out market research: we will provide the entire Junited collection with a 1-box inventory per model, with payment deferred until the end of the respective season. For school shoes, this is August 15, for winter dutiks - October 15. We will take care of delivery to the terminal of the transport company in your city. The new partner will be able to expand its assortment with a supplier who will not trade directly with your customers.
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