by Phil Wrzesinski
Independent retailers – and I include myself in this statement – are a bunch of hypocrites. We really are.
Whenever we get together at a trade show, we sit around a table at the bar and share our horror stories of customers who pester us for deals and discounts; threatening to take their business elsewhere if we don’t match a price.
Then the next morning, when we walk into a booth at Toy Fair or ASTRA, what’s the very first question we ask the vendor?
“What is your Show Special?”
We become the very customer we spent the previous night complaining about. Ouch.
Toy Fair and ASTRA have become all about the deal and less about the toy – can I get it for cheaper so that I can sell it for cheaper so that I won’t have to hear from nasty customers how they can get it cheaper online or at Walmart?
If your mentality resembles that at all, here is why I broke the habit of always and only being concerned about the deal.
Someone will always complain about your prices
First, understand that someone will always have a better price and some customer will always complain. Let it go. You can’t win the race to the bottom so don’t even enter it. As Seth Godin said, “The only thing worse than winning the race to the bottom is finishing second.”
You will always lose customers to lower-priced stores and websites, but if you’re focused on excellent customer service, you’ll win just as many on the flipside who care about convenience, service, and expertise.
Payless Shoe Stores did an experiment. They opened a fake luxury shoe boutique called Palessi to see if they could sell their regular cheap shoes at designer prices. The goal of this experiment was to show that their cheap shoes are quite nice and compare well to the expensive shoes people buy.
The fake store sold over $3,000 worth of shoes before they pulled the plug and told the customers about the ruse. You’ll be seeing video from this experiment in upcoming Payless ads showing you how their cheap shoes are the same as expensive designer shoes.
The flipside to this is that they also showed you can sell items at a much higher price than normal if you package them well, service the customers well, and go after a different clientele than would be found in a Payless store.
Nothing is exclusive
The internet changed the whole concept of exclusivity for retailers. Pretty much everything you sell is also available online.
Pretty much everything you sell is also available in nontraditional channels. With the closing of Toys “R” Us, vendors are scrambling to make up for lost sales. I have seen toys in hardware stores, farming stores, pet stores, and even a men’s clothing store!
Every single vendor I have seen in these stores used to be exclusively in the independent, specialty-toy channel. Now they are everywhere.
If you go hunting exclusively for exclusive products, you’ll miss out on a lot of great items your customers would love to buy from you. You’ll also be sorely disappointed come next Christmas when you find your “exclusive” item sitting on some cardboard stand at the car wash.
Look for solutions, not deals
When I accepted the two facts that I would never be the lowest price in town and the products I was selling would be found in several channels, it freed me up to truly be a merchant. Instead of looking for deals, I went looking for solutions.
I went looking for the kind of toys I would be happy to sell because of their play value, their construction, and their packaging. I went looking for toys that fit the categories I wanted to cover, the needs of the customers I wanted to fulfill, and solved the problems my customers needed to solve.
This changed the way I approached each booth.
Did I ask about the show special? Yes! Did the show special alter what I bought, how much I bought, or whether I bought at all? Not really.
First and foremost it was about the toys, the stories they told, and whether those stories matched the ones I wanted to tell and customers wanted to hear. When you match your products and their stories with your customers, you can unapologetically sell anything at any price regardless of whether someone can find it cheaper.
When a deal is not a deal
Not all the deals you’re going to see at Toy Fair or ASTRA will be good for you. I was a sucker for December dating terms, but I also had more than 16,000 square feet of selling space I needed to fill, plus another 14,000 square feet of warehouse space for the excess. I had the room and the need to write those big orders.
If you don’t have the space or do the kind of volume that I did, that generous offer would be more damaging. You would have less flexibility to change around your product mix as your customers’ stories change.
If you have to buy more than you want to buy to reach any deal, it is likely not in your best interest, and I used to make that mistake a lot. I would add one more item to the order – something I wasn’t totally sold on – to get to the next level of discount. Unfortunately, markdowns to move that item ate up any savings I got from the deal.
You aren’t the Land of Misfit Toys. If you have to pad an order with an item you don’t feel strongly about, the deal probably isn’t all that good.
The bottom line
What’s most important is your bottom line. Finding the right products to sell is far more important to that bottom line than an extra 30 days to pay the bill, free freight, or a small discount off the top.
Once you find the right products you can think about the deal. Just don’t let the deal dictate what you buy. Buy what you want and let the deals be the bonus or the icing on the cake.
When you walk into a booth at your next trade show, focus on the solutions available to you, not on the deals to get you to buy. Do that and you’ll be the customer every vendor wants to work with.
As Payless showed us, you can sell anything you want at any price you want if you have the right solutions in the right packaging.
As the former owner of Toy House and Baby Too in Jackson, Michigan, Philip C. Wrzesinski understands the challenges faced by independent merchants. Today, the speaker, author, and retail educator uses the lessons he’s learned in a lifetime of retail to help others find their success. You can learn more about Phil at PhilsForum.com.