Buying Groups

• Evaluate all buying groups as they all work differently

• Talk to the main marketing contact and/or a member of the committee

Buying groups have been a highly successful feature of the floor retailing scene in the last decade or so, giving independents the extra edge they need to compete effectively with the retail park chains.

More than 1000 retailers are now members of one of the several buying groups which operate in our sector and the numbers are slowly, but steadily growing.

While the benefits of bulk buying power are self-evident, the resistance to the buying group concept among nonmembers appears to be centred on fears of surrendering some control to a committee – and most particularly compromising long-established relationships and negotiated terms with current suppliers.

The bottom line is the bottom line. A retailer selling across a broad range of products is likely to improve margins within a buying group – but you don’t need a leap of faith to join up. Ask the buying groups for answers...

Increase margins

• Group purchases to get beneficial rates

• Rebates

• Exclusive higher-margin products

• Special promotions

One of the key reasons to join a buying group is to benefit from the discounts they negotiate as a bulk buyer from manufacturers. The way discounts and rebates are passed on to members varies between groups so make sure it’s absolutely clear how this will be done. You’ll need to work out how this compares with discounts you have already negotiated locally with preferred suppliers.

Access professional services

• Business and financial services

• IT and internet support

• Training and workshops

• Professional bodies

Some buying groups offer an excellent range of other services which may be valuable to your business. Financial services include invoice factoring, credit, loans and insurance. Some of the more sophisticated groups offering marketing packages, software systems to help you run your business operations and customised websites ready to use. Relationships with professional and training organisations can also offer discounts.

• Get a list of members and call up two or three for a ‘real-world’ view

• Establish your territorial exclusivity – where’s the next nearest member of each buying group

• Ensure you understand the financial arrangements, any fees that would relate to your membership, how the bills are paid and whether your fees are refundable if it doesn’t work out. Ask the buying group for a consultation to estimate your potential savings

• Review all the extra benefits and services to see what you would actually use

• Check out the product ranges offered including the own-label options and the UK/European mix

• Ensure you understand any rules that may limit your flexibility to run your business the way you want

Increase sales

• Best of both worlds’ proposition

• Wider ranges and exclusive products

• POS, displays and merchandising support

Your customers will like the proposition that you are independent but with the buying power of a group –this gives them (and you) the ‘best of both worlds’ with personal service and competitive pricing. Most groups will also offer you ‘own label’ ranges and support with pointof-sale, merchandising and displays. Central stockholding may also be on offer.

• Members-only exhibitions with preferred manufacturers

• Regular meetings and supplier presentations

• Regional workshops

• Helpline www.beautifulflooring.co.uk

A lot of retailers enjoy the buying group environment of being independent but not alone out there on the High Street. Groups hold regular meetings and some have their own trade shows, regional meetings and workshops to help you develop your business. The network gives you someone to call when you need advice on, for example, an unusual installation, a technical consumer complaint, legal issue or business dilemma.

Contact: Carl Harris Tel: 01892 549050 charris31@sky.com www.flooringone.co.uk

Peter Karra Tel: 0121 683 1426 peter.karra@flooringone.co.uk

Metro Group www.carpet1st.co.uk

Contact: Jill Coward Tel: 01204 393539 jillcoward@carpet1st.co.uk www.smg-group.co.uk

Contact: Mike Reed Tel: 0118 932 3832 info@smg-group.co.uk

Associated Carpet Group www.acgcarpets.com

Contact: Jon Richardson Tel: 01942 825520 jon@acgcarpets.com