Distribution and Retail

I have been a retailer for 30 years. I am surprised that some manufacturers are not doing their due diligence in opening up distributors.

Some retailers are disguising themselves as distributors in order to purchase their goods at a cheaper price. They are using their lower purchase price to deep discount the retail price.

This is messing with retail prices and making it harder for the existence of a traditional retailer that follows the chain of manufacturer, distributor, retailer.

It's not difficult to establish a business' credentials. I am at a loss as to why certain manufacturer's seem willing to damage the market place in such a manner. Are they lazy? not interested in good business practices? or hard up for cash?




Tuesday, July 12, 2011

Prehistoric Retailer Info and the Independant Retailer

The world of retail changes constantly and small independent retailers are struggling to keep up.  In 30 years we have gone from the hand written receipt and ledgers to the cash register to the POS.  

Instead of checking and pricing product from an invoice, we now have to enter data for the product.  Everyone who uses a POS knows that the data entry usually involves filling in 10 - 15 fields.  Heaven help you if you have a web site.  For me, I spend 15 - 20 minutes on entering an item when it is being posted all the way to the website.

This is really tough on an independent.  Now you have choices.  You can make your day longer by coming in early or staying late.  Been there.  Done that.  No thanks.  Lots of people will give you the solution.  "Hire someone".  This is not easy.  What if there is no money.  When is that individual going to do data entry?  We need the computer for the POS transactions, emails, social networking and the programs that we use.   Now we have to hand out keys.  Then you need to hire someone who can type, is grammatically correct, honest and can work independently.  If you have to check their work, you might as well have done the work yourself.

I find that too much data entry zombifies me.  I find it very hard to shut down the data to give someone a courteous welcoming hello after I have been on the computer for an hour.

Here is an opportunity that I would love to be part of but I lack the computer programming skills to do so.

What if there was a list that we could subscribe to.
One that has the MSRP, the description, the weight and size, the barcode, the image (maybe customized for the most popular POS systems.  Perhaps this program could go down the line.  Our distributor of choice could add their reorder # and their cost.  With little work we could import this information to our systems.

The resource for us in the gaming industry is the "Greater Games Industry Catalogue".  This catalogue went out of style with the dodo bird.  It needs to be buried. Usually I don't even open it and this is sad because someone paid to publish this.  My copy goes straight to recycle.

I look forward to this day when I will have more time to actually pick up the product and look at the packaging and to enjoy the customer and a coffee.

1 comment:

  1. There's a connection between this post and the top-of-the-page blog description. Let me explain.

    I work a lot with data standards and systems integration. I feel your pain. The truth is (as I'm sure you know) everyone in every tier - manufacturers/publishers, distributors, and retailers - has a system of some kind that keeps track of 90% of the fields you're describing. Maybe not the same fields, and they're all in differently formatted database systems. Some fields you can't use, because some doofus put it in as DND4-PGII instead of something meaningful like "Dungeons & Dragons Player's Guide II". And often there are no unique identifiers that you can use to ensure that product X is not the same as product Y. In short, even if you could get access to those data files, it'd take at least as much effort to normalize the formats and clean up the data as it does to manually re-enter everything.

    It's extremely hard to get everyone in an industry to agree to a standard format, if there's no direct benefit to them. Asking Fantasy Flight to conform to WotCs product data format, or vice versa, is not going to happen. Where the standardization must occur is where the products get aggregated - at the distributor. The distributor has a large number of retailers who would all be more than happy to adopt the distributor's data format if it meant substantially lower data entry. The distributor also has to keep all their products in the same system and in the same format.

    This is a terrific opportunity for the distributors to provide a value-added service to the retailers, to assist the brick-and-mortar stores with their tracking and online activities, and ensure they continue to be relevant in a world where publishers or online wholesalers can easily sell directly to their customers.

    This would mean that retailers following the classic three-tier model would have a bit of an edge on the online-only, cut-the-middle-man vendors. They'd spend less time doing data entry, leaving more time for direct customer contact and marketing and promotion ("selling"). They'd have better product and cash flow as they have a better understanding of what they need to keep in stock and what they can safely leave in the distributor's warehouse, due to up-to-date distributor stock balance numbers - no need to keep cash tied up in large number of boxes on hand, or have big clearance sales to clear out the garage for new product. Done right, this convenience more than makes up for the additional middle-man cost in increased sales, if you're an established business with an existing customer base (which, clearly, you are!).

    When I worked in computer sales - even in a very small outfit with moderate computing support - all of our distributors' databases were downloaded automatically into our own local system daily. We'd know exactly how long it'd take to get even the most arcane little doo-hickey and how much it'd cost. That was 10 years ago. If your distributors aren't doing this for you now, I'm appalled; it's a fantastic opportunity both for you and them.

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