You can have all the business acumen in the world, but if you can’t source great products for your customers, your retail empire will struggle to get off the ground.
The retail supply chain is simultaneously the backbone, the face and the heart and soul of your business. Yes, it really is that important. Working with top-quality manufacturers and building a solid product base that reflects customer needs is no happy accident: it’s the result of a well-constructed business procedure.
Buying products to sell—whether that’s for an eCommerce retailer or a bricks-and-mortar store—should never be an arbitrary decision. Having a ‘good eye’ is one thing, but it can’t be the be-all-and-end-all.
Your buying process is just that: a process. 8RC have put together this guide to making sure your retail buying is conducive to establishing a strong reputation and achieving maximum profit.
Great retailers don’t think like retailers: they think like customers. Your customer base is the blood flowing through your company’s veins. They should be at the centre of every decision you make. When scoping out a new supplier, put yourself in their frame of mind and ask yourself a few simple questions:
- Who are they? Decide who you’re selling to before you decide what to sell them. Imagine them in as much detail as you can: what is their age, occupation and gender, for example?
- Why do they buy from you? Don’t be afraid to blow your own trumpet here. Knowing your strengths helps you maximise them.
- Why don’t they buy from you? Establish whether there is anything standing in the way of you growing your customer base. Be brutal with yourself, it could be the first step to engaging that missing customer.
- What do they need? Quite simply: your customer is missing something in your product range that you can provide. It’s your job to figure out what the perfect supplement is to what you already offer.
The answers to these questions can’t be guesswork. You have web and sales data to help you identify gaps and attract new customers.
Of course, it’s not just about what the product is, but how it’s made and how well it executes its intended usage. The last thing you need—especially if you’re an emerging retailer—is to build a reputation as a supplier of disposable junk!
Again, allowing this to be a quick decision made by a single actor isn’t conducive to creating a strong buying process. You need a procedure in place to help you sort out the high-quality from the low-quality suppliers and manufacturers.
Some companies choose to set this up by themselves, but this can be a lengthy task and lead to hit-or-miss results. Another option is to engage an experienced retail consultant who can help you assess the calibre of your new would-be partners.
So you’ve found the perfect product, measured its quality and decided it’s a good fit for your customer. Done? Absolutely not. The final hoop your new product or supplier needs to jump through before they can join the party is your potential profit margins to ensure you can make a return on your investment.
It’s important to be realistic in your calculations. No matter how great the product or supplier is, you can’t guarantee that it’s going to be transformative for your business. We’ve seen many a great retailer selling top-quality products go under because they overestimated their profit margins.
Overall, the key to any business is procedure. That applies to everything from financial management to sales to your supply chain. Having a proper step-by-step process in place leaves as little as possible to chance and minimises the costly risk of human error.
Find Out More
If you would like to know more about how businesses operating in the retail sector can choose products that will actually sell, then get in touch with 8RC today.