SUPPLY & DEMAND PART 2
HOW WHOLESALERS SMOOTH OVER THE PEAKS AND TROUGHS VICKY NUTTALL DIRECTOR OF GIMA
This year, the industry has been debating the many challenges faced by the supply chain. Suppliers are feeling the pressure as retailers stick to a ‘little and often’ approach to their inventories, with the supporting infrastructure and working week stretched to its limits. An open dialogue between retailers and suppliers is still required to release some of this pressure, but results will of course take time and effort from all parties. The wholesale route, however, is one that offers a valuable and popular alternative. Here we find out more about the role of the wholesaler and why it can make a significant difference to the way we work as an industry. Earlier this year we mentioned the issues surrounding holding stock and the ‘enough to fill the shelves’ concept. It’s a solution that is arguably most relevant to wholesalers – with the benefits for retailers extending beyond simply improving stockturn and controlling their cash. The ability to more easily introduce new products, to take a chance
on something new and to widen ranges allows retailers to more accurately match the ever broadening expectations of customers. In turn, with more products on offer, competition is increased amongst suppliers, which can result in an improved margin for the retailer or extra value for the consumer. Distributors that buy in bulk not only tend to buy it at a cheaper rate, they can also help to control supply and repeat the same promotional prices at a constant rate. For suppliers, many benefits only surface under scrutiny of the process. Charlie Lacey, CEO of Decco, currently has 35 reps on the road. “When you add our own salesforce to those already working for the supplier – it gives a huge increase in coverage. “We make sure the customer is carrying the right range, ensure promotional activity is in place, making sure stock is replenished and generally represent manufacturers in more places than they are able to get to. But more than that, we also offer marketing support that benefits suppliers and retailers
alike. We create targeted consumer demand for products in our Fair and Square consumer promotions – which provide a 16-page professional, quality leaflet for which we arrange distribution through Royal Mail to households in their area. This sort of quality of marketing material is simply not available for most independent businesses to produce on their own.” David Hibbert, Managing Director of Stax – a GIMA member – says that the hunt for margins can lead to unforeseen problems, particularly when attempting to control more of the supply chain. “Anybody can order a container from China. The problem is, once you’ve paid for the shipment, there’s also insurance, carriage, and then making sure it arrives at the right time. You also have an additional problem when you do make your money back selling the items – how do you stock up on just one line? “That’s where we come in, as a consistent source of product and allowing for better margins than having gone through the
There were lots of great new products at Glee this year, and GIMA believes a good wholesale network is essential in turning them into the bestsellers of tomorrow.
22 November 2017
process of sourcing direct from overseas.” When it comes to technology, modern online ordering systems are helping to add more effectiveness within the supply chain. For example, Decco has a 24-hour resource with category management, 24-hour stock level information, in addition to details on pricing and the latest promotions. Stax is different as it sells direct to trade professionals as well as retail partners, but they also employ a vast online ordering portal that provides stock information and full access to credit account details showing statements and ability to download copy VAT invoices. Interestingly, if you are a manufacturer looking to work with wholesalers with online ordering systems such as these, the advice is to concentrate on providing complete product information in a clear format which has become a major factor in the process of getting listed. Many thanks to David and Charlie for their candid insight into the unique role of the wholesaler – many of you are of course already dealing with them and are fully aware of the benefits. But despite the reduction in numbers of wholesalers over recent years, GIMA believes their role to be as relevant as it has always been. As we continue to encounter the unique peaks and troughs of our industry, it is essential that we are aware of the different ways of smoothing them over. 4GIMA is here to hear the thoughts and experiences of its members, and would also love to hear from non-members also. Please share your experiences by emailing email@example.com