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Making Collaboration A Win-Win Deal

By Sean Blanks, Marketing Director, cartridgesave.co.uk

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Some people believe that to succeed in retail you must be a tough negotiator who is able to drive a hard bargain with every supplier you meet. In my experience, however, working collaboratively with suppliers, rather than brow-beating them into submission, will help you generate greater savings. Savings that you can pass down to your customers to help you maintain your competitive edge.

Here are my top tips for making collaboration a win-win for all involved:

It’s good to share.

If you have good, insightful data, the best thing you can do is share this with your suppliers. It will provide you both with a fantastic platform to discuss the traffic their products receive, how their bottom line could be impacted by revealing the volume they could be shipping and the impact a discount period could have on sales.

Don’t be afraid to share. After all, you are both motivated by the desire to sell more. By putting your supplier in an informed position, you are able to start a constructive discussion on the best tactics to realise this.

Theoretical models are good in practice.

Suppliers won’t renegotiate prices if they think the only benefit is a larger profit margin for you. A theoretical model is an ideal way to demonstrate the profits available to all.

Theoretical models can take time to work up. However, bear in mind that what you are creating is an opportunity to boost sales and get ahead of the competition. So it’s time well invested!

I’d recommend focusing on small changes rather than anything grand and sweeping. For instance, given traffic stats and abandoned baskets to your site, if your supplier offered a five per cent price reduction, what impact would this have on volume sales? By getting this down on paper, you can show the opportunities that exist, just a few clicks away.

Show you care.

Be realistic in what you propose and be sensitive to the margins and brand image of your supplier. Don’t suggest a ‘fire sale’ approach as the only way to drive increased sales. It’s insulting and is the fastest way to destroying a good relationship.

This is collaboration after all, so think of ways to show your support for the product or brand in question. Could you feature it in a promoted location on your site? Adding incentives like this will demonstrate that you are prepared to provide them with added value, and it’s not all take-take-take.

Try it out together.

The next step to any theoretical model is to put it into practice and put your money where your mouth is. If you are both in agreement, trial a discounted price point for a defined period, to see what the effect is.

If it works, you’ve strengthened your position considerably. What’s more, you’re both benefiting from the fact your customers are buying more. The Holy Grail! If it doesn’t? You can always go back to your model and work out why.

Contracts can be worth it.

I can’t think of a single supplier we have a contract with. Our industry moves so fast in terms of prices that even the shortest contract would soon be out of date. This means we are never legally bound.

However, there are occasions when a binding contract with a supplier would grant you the security to develop strategies together like the ones outlined above. If you know you’re going to be working together for a period, flag a possible trial in the early stages as something you could work on together. By mixing different price points at different times to see what works, by the end of your agreement you’ll both have a load of ideas about how to generate more business.

 

Sean Blank

Sean Blanks is the Marketing Director of printer cartridge company www.cartridgesave.co.uk. By taking a systematic trial and improvement approach, Sean and Managing Director Ian Cowley have created a Sunday Times Fast Track100 e-­retailer which manages 30,000 orders a month and is among the UK’s fastest ­growing printer supplies retailer in terms of sales.

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