Question for retailers

[Jason Harris 31]

I had an organization ask me today about group pricing; I told him I wanted the sales to go through a local retailer. During the conversatoins, I began to realize that I've had different feedback from retailers on what they think is fair compensation in this scenario, so I'd like to hear any opinions to see if there might be a consensus. I'm not asking anyone to divulge state secrets; I'm just trying to help everybody be profitable

The hypotheticals. This would be a situation where I've done all the work and I'm bringing an order for, perhaps, twenty-five sticks for a local team or even more for an organization. They are obviously receiving a group discount (and they might receive a discount on subsequent purchases, although probably not as high as their original order). How much of a discount I give to the team is obviously contingent upon how much compensation given to the retailer.

The arguments. I've had retailers tell me they need X percent of profit regardless because they still need to pay for rent, utilities, salaries, etc, and this group purchase constitutes the sales they would have made to that team otherwise. In some municipalities, and at some skill levels, that is certainly true; however, in some areas, it could equally be true that the sales would have been spread out at different shops. Also, a store would most likely pick up some ancillary sales because the players will be in the shop for the original and subsequent purchase(s). Last, this volume purchase helps a retailer reach discount thresholds more quickly.

Tangential questions. At what level would it be considered "marketing" for a manufacturer to sell directly without the retailers involvement? By marketing, I mean that elite players using the equipment creates greater awareness, which in turn helps the retailer sell product. Pros? College? Juniors? HS? Midgets? Bantams? Squirts? (I'm not trying to be facetious -- just trying to spur some thought.)

So, again, without asking for trade secrets, what are some opinions on fair compensation in that scenario?

[Gongshow11 1]

i play ncaa and our whole team got to see each company rep and their products. the reps then divulged the deal we would get from them. if you want info salming, PM me, i dont think the economics should be discussed openly

[Chadd 916]

I would say that it would depend on what level of interaction is required on the part of the dealer. We've done some of this with one particular vendor, but I'd prefer not to post those details here.

I'm not a big fan of giving freebies to kids for marketing for a number of reasons. Around here, it doesn't seem to make much of a difference.

[Jason Harris 31]

I'll give you a call about it, Chadd, although I'm leaving tomorrow on a surprise trip to Disneyland for my girls; I'm a big kid myself, so I can't wait. :lol:

Regarding the freebies, if I understand what you mean, I'm against freebies also. I'm referring to a team asking, "If we buy 25 sticks, what's the price?" I'm trying to determine which teams it's okay to go directly -- perhaps a college or pro team -- and which teams do I need to say, "We have to go through your local shop." And, of those teams, what's fair compensation to the local shop for accepting the order.

[Chadd 916]

I can say for myself. If a local college approached you I'd be happy with a couple points just for being the conduit. Assuming of course, I don't get stuck with the shipping costs as well. I would want some assurances the school wouldn't be dumping them to the public though.

[modernice 0]

I can say for myself. If a local college approached you I'd be happy with a couple points just for being the conduit. Assuming of course, I don't get stuck with the shipping costs as well. I would want some assurances the school wouldn't be dumping them to the public though.

Interesting topic...

Two of us at PuckSkin have one foot in the retail world and the other in the manufacturer/supplier world, therefore, our Team/Organization/Association/League(TOAL) sales strategy has always been to go through a retailer to get each deal done. Retailers are still the backbone of our sales & distribution, and brand building strategy.

Scenario 1:

In some cases we have done all the work, and landed the TOAL deal in an effort to open a store account that already deals with that particluar TOAL. It's great when it all works out, everyone is happy.

Scenario 2:

sometimes the LHS does not bite and the TOAL wants to order 100-200 sets of PuckSkin. When opps. like this happens, it could really spur interest in a geographical region that watches or supports that TOAL. How de we serve that market sector when the LHS is still hesitant to sell our products...it gets tricky! Our goal is to make sure the consumer has access to our products. Usually there is more than one LHS to choose from, so we make it our responsibility to explore all of the retailer options.

Scenario 3:

The TOAL is not respecting the retail sales channel for whatever reason. We come across these TOALS all the time, especially in Ontario. Some of the TOALs have pretty sophisticated buying policies and move big volume.

These TOALS are not really the backbone of our s&d channels but how do we ignore them if they really want our products?

Finally,

We have some player/coach marketing programs in place that our more about branding than anything else:

The Players Club

The Captains Club

The Coaches Club

We always hope to tie them in to a retailer as well as the TOALs where they interact, we call it spiral marketing.

our dilemna is replicating regional retailer success outwards.

cheers,

gb