The journey of opening a retail store involves hundreds of decisions. From formulating your business plan, to securing financing and licenses, to sourcing products and vendors, you may have already discovered how overwhelming the process can be. When you’re at the point of evaluating suppliers, there are a few tips to help you make the best decision for your business.
Choosing a supplier that aligns with your business goals is a fundamental part of not only getting your retail store up and running but also setting you up for success. A mutually beneficial relationship with product vendors impacts sales and profits, and ensures consistent product and customer service – not to mention avoiding headaches and hassles.
Finding vendors
A quick Google search will bring up hundreds of retail store suppliers, but how do you know which are legitimate, reputable companies that you can rely on? To help focus your search, look for industry-specific online directories and trade publications from creditable organizations such as the National Retail Federation and Retail Council of Canada. Another reliable way to discover regional, national, and international suppliers is through tradeshows. Events and exhibitions give the opportunity to evaluate many vendors all at once, meet face-to-face, and have a hands-on look at their products. Of course, nothing beats referrals from other non-competing retailers in your business network who have the experience to give you a full picture of the best vendors to work with.
Evaluating vendors
Finding a good match when choosing a vendor can help make or break your retail business. There are a several areas to consider when evaluating suppliers for your new retail store.
Aligns With Your Business Vision
Part of formulating your business plan included determining the need in the market, understanding your target customer, and identifying how your store will stand out from the competition. Using these factors as pillars for the foundation of your business will help decide which vendors best align with your business strategy. For example, product price and quality can vary substantially between suppliers, if your business model is based on offering high-quality products, it’s important to select a vendor that consistently delivers on this aspect, as it will ultimately impact your bottom line and store’s reputation. Or maybe your store’s niche in the marketplace includes unique items, or products with minimal environmental impact. Sourcing vendors that offer innovative products that value your vision will set you up for a successful long-term relationship with that supplier. In addition to asking for pricing lists, be sure to ask for product samples. Test out the products and ask potential customers on their thoughts to ensure you select items your customers will want to purchase.
Minimum Order Quantity
Most suppliers have a minimum quantity requirement when placing an order. Suppliers often sell products in packs or groups to keep their costs down and maximize profits. As you start your journey to opening a retail store, minimum order quantities are important to consider when thinking about start-up costs, ongoing cash flow, and storage capacity.
Lead Time
With today’s supply chain disruptions, lead time is a critical element when evaluating suppliers. Ensuring products are available when customers want to make a purchase is vital. Lead time is the number days you can expect to receive products from the time an order is placed, to when it is filled, and then delivered. Lead times can fluctuate throughout the year. Having an upfront discussion about what to expect from your vendor will help with order planning. Lead time is also a big part of the equation when comparing local vendors to international vendors.
Reliability and Reputation
Suppliers are an integral part of your business; look for vendors that place value on fostering long-term relationships and customer service. Talk to other retailers with similar business models to get a better understanding of what to expect from your short list of vendors – ask about product consistency, pricing fluctuations, delivery commitments, and customer support.
Technology Vendors
The importance of choosing a technology provider when opening a retail store should not be overlooked. A point of sale (POS) system is the backbone of any retail store. Complete retail solutions, such as ClearTEQ POS, give you the ability to serve customers, process payments, manage inventory and purchase orders, and make knowledge-based business decisions based on reports. When evaluating POS software, look for a solution that includes vendor management tools to track contact information, previous and in-process orders, and minimum order quantities. Also look for features that include the option to order by case quantity and monitor lead times. Above all, a reputable technology partner will offer ongoing updates stay on top of industry advances and security concerns and will be backed by a friendly customer service team that is your go-to when questions arise.
Partnering with legitimate, reputable suppliers that contribute to your business goals and strategy is a fundamental part of setting your business in the right direction for success. With so many vendor options, take the time to do your research, ask questions and request referrals. The effort put in now will save hassle and lost profits down the road as you continue the process of opening your retail store.
As you move forward, learn more in our Opening a Retail Store blog and checklist.
