Following the success of our other two posts on the importance of the right retail software and the top online tools and services, we decided to give a final round to our series of retail articles.
In this article, we asked successful retailers and experts what the challenges of an independent retailer are and how can an independent retailer compete with power retailers.
Emphasize Quality, Not Quantity
As Darren Green from Roman Blinds Direct reports “By introducing our very own in-house production team, we were able to massively cut our costs; this meant we could pass the savings onto our customers and lower our prices, attracting much more business than many of our competitors on similar levels to us. We employ seamstresses who have decades of experience, so when people order from us they know that they will receive a handmade, quality item– a USP that many of the larger companies can’t compete with.”
“We are competing with a variety of large businesses that operate across the country, so rather than try to provide the same selection of products as they do, we decided to try and provide a ‘specialist service‘ to help us stand out” Sam Williamson of Floor Heating Direct states. “Customers know that although they might get a wider selection of products at our competitors’ stores, they will get the benefit of our expert knowledge if they visit us. I think it’s important to wear your heart on your sleeve and let people know that you are an independent retailer. We find that people are often willing to pay slightly more and deal with slightly less choice if they know that they’ll get expert help, as well as the satisfaction of helping a local business.”
Pamper Customers With Perks
“We would have no business without our customers and we know it. Because of this, we do our best to ensure their complete happiness in both the purchase itself and the return policy. For 30 days, with a receipt, we have a no questions asked policy and we will refund their money with no problem. Without a receipt, it’s a product exchange. After 30 days, with a receipt, we will exchange for the same product or another scent, or give them store credit.
Personal care products are just that, personal, so we want to make sure the entire experience is pampering and special. We have a loyalty program for repeat customers. We have a refill program so that our customers can save 40% if they bring their jars back. More importantly, we treat them as the jewels in our crown that they are!”
Roberta Perry, Scrubz Body Scrub, Inc
Keep Good Stock Vendor Relations
Angie Stocklin from One Click Ventures says that “To get better prices from suppliers and stay competitive, our business lends itself well to working with small to medium-sized vendors so that we can be a bigger fish in a smaller pond. We have been working with some of the same vendors since 2006 and have found that long-term, strong relationships often help when it’s time to negotiate prices. We also make a concentrated effort to ensure a large percentage of our inventory is being ordered from a few key vendors. Ordering a large number of styles in smaller quantities is our best way to try and measure up to chain retailers buying large quantities of a few styles. And above everything else, we make sure we’re kind, reasonable, and respectful during each interaction.”
“As a business, we must speak a lot to the suppliers to understand their quote and using what ratio they are quoting prices and how far it goes well in the market. Communicating things with each other will be the first best idea to get the negotiation part done well and get better prices from your suppliers. To stay competitive we must sell the products which are highly demanded and consumer needed. Hence go highly on deep search on finding vendors with products our consumers need.” Billie Jean Bateson from Amazing Wristbands supports.
Be Tight With Inventory Management
“As the Inventory and Merchandise Manager, my job is to make sure we order just the right amount of inventory and then sell it quickly in order to maintain the overall health of our balance sheet. Having the right amount of products at the right time is often difficult to achieve on a consistent basis for even the best-run businesses.
However, building a contingency plan of what you’ll do when you sell more or less than expected is easy to do. Spending a few minutes mapping out a couple of scenarios with your team and suppliers ahead of time can save countless hours of work and takes what could be an overly emotional reaction at the moment off the table because you already know what to do when a product starts to sell quickly or never takes off. This one simple idea has kept inventory in a healthy state over the years.”Erik Flugstad, Tanga
When asked “how can an independent retailer compete with power retailers” Michelle van der Heijden from MUSH answered: “As an independent retailer one has to know their numbers and run a very tight ship. There is literally no room for inventory mistakes. Especially if your space is limited and every inch of storage matters. I understand that we lose money on some inventory but having grown up in retail I know that my store has to look fresh and interesting all the time and I make sure it does daily. That usually means rotating my inventory regularly and that could be a problem when you need to operate in a very tight space. With higher priced items I prefer to keep lower stock and push for diversity.”
As for managing a good quantity of stock, data is central. We are lucky to have a business intelligence analyst on our team, and he manages all of the data flowing into and out of our online brands. We use this information to look at quantities on hand and sales per item over the last 100 days, and compare those numbers to future sales forecasts. Our forecasts are solid, but they are never perfect, so our merchandising team monitors our in-stock rate for all three of our brands, on an inventory class level. Our goal is to catch all low-stock items before they run out of stock, but we allow ourselves reasonable wiggle room to account for things like delays in customs.”
Angie Stocklin, One Click Ventures
Use the Right Tools and Services
“One of the biggest challenges that smaller retailers face is that their transportation and importing costs can be higher than larger retailers that benefit from larger volumes. A transportation company that works to bring together retailers that are importing smaller loads from overseas and work to consolidate those shipments into larger collective shipments can help to lower the overall cost for all those who consolidate.”
Randy Guidry, Averitt Express
“Being an independent retailer comes with a list of challenges, especially in the stock department. I learned the hard way that doing it manually by hand is a very poor way to keep an updated list of all of my products. In order to stay competitive against big box retailers, you must have at least the basics of keeping your inventory updated. That is why I started using an inventory platform that lets helps me organize my inventory and monitor all of my products. I advise all small business owners to start using an inventory service or platform because not only it will help you keep an accurate report of your inventory, but it will simplify the return process for your customers and help handle your sales in a very efficient manner.Lisa Chu, Blank n Bianco
It’s important to select a pretty well-known or reputable inventory service because they will provide top-notch customer support and the dashboard will be easy to use. Not only that, your data will be protected and secured. Remember, the point of using an inventory platform is to increase your productivity, organize your inventory and free up your time to focus on other important aspects of your business. Technology has evened the playing field if you learn to use it to your advantage. Don’t skimp out on a cheap inventory service, find one that fits your needs and you will be able to compete with well-known retailers.”
Megaventory is an online inventory management software that can help you keep track of your stock and organize your operations. As Lisa Chu mentioned above, it is highly unproductive to do this task the traditional way, by pen and paper. Megaventory can be your all-knowing personal assistant and do all the mundane everyday tasks that keep your business running smoothly. You can read more about the benefits of implementing a Web-based inventory management solution in your business here!
Do you have any questions about this?
Book a free, no strings attached chat with us to learn how the Megaventory team can help.
Have Backup Suppliers
“The Small Business Administration says that 40 to 60 percent of businesses don’t survive disasters. The reasons why are complex, but one potential reason is that they don’t have a backup plan in place for their suppliers. Remember: disasters can strike your business and your suppliers. Even if you haven’t been affected by a disaster, your suppliers could be suffering outages, especially if they’re in a different part of the country. That’s why it’s important to have alternate suppliers and vendors you can contact in a pinch.”
Ted Devine, Insureon
Being an independent retailer in a globalized market is hard. Customers are constantly looking for the lowest price and big box chains can’t be beaten at this. Nevertheless, an independent retailer can make a great difference by providing high-quality and unique products, something big chains can’t do. Furthermore, by implementing the right tools and focusing on solid vendor relations, retailers can make processes more efficient and use their time and money in other parts of their business.