Why Retailers Should Negotiate With Wholesalers

Alright, so this isn’t what wholesalers want to hear. But the reality is that retailers are taking hits when it comes to the suggested retail prices of many of their products in an effort to get sales. We aren’t referring to annual sales, seasonal sales and special events here, but rather permanent markdowns being taken in an effort to make sales– not just move the final few pieces of what is left from a size run or original order.

What Can Wholesalers Do?

The fact is, the price of many products at retail have gone down in their market value, therefore their wholesale price should reflect this. As wholesalers, if you aren’t already offering incentives, discounts or some sort of savings in your sales to retailers – you should be. Of course, this all depends on who you are. Many wholesalers are doing great or getting by because likewise, the retailers who are selling their product are comfortably moving their product. But if your product falls into the category of not making expected  sales, it’s time to help out your retailers.

What Should Retailers Do?

If you are a retailer who is struggling to make sales, consider how you can help your margins before you bring new product into your stores. Discuss options with your vendors that include discounts, incentives or possibly even product buy backs based on sales – or lack of them. Plan in advance how you will manage the markdowns customers are expecting, but also plan to make sure your customers don’t expect more markdowns to keep taking place. Buy less of more so that customers can’t wait around for what they want to still be there, but for less. And make sure your vendors know you are making these changes to support your business overhead and hopefully they will support you along the way, as well. After all, if they fall into the category of products needing to be marked down, then they should be smart enough to know it’s sell for less or don’t sell at all!

At the end of the day, as a retailer or wholesaler you want your products to sell. By supporting each other to make this happen, you can keep each other happy and ultimately – the final customer, too. But be realistic and be fair. These negotiations aren’t for everyone and retailers should respect that…. Likewise, wholesalers should respect their retailers if they don’t get reorders. Whoever said retail was easy certainly wasn’t working in it during a tough economy! Luckily, the battle is often worth the fight.