How retailers can prepare to work with large suppliers

by | Jul 5, 2017

Retailers who want to work with large suppliers like Nike, Adidas, or other international brands may have their work cut out for them before they even get started. For one thing, retailers of almost any size may find they’re the ones being told what to do to a degree.

While big box retailers may call the shots for suppliers, and the suppliers have to follow the rules if they want to be a part of that retailer’s ecosystem, the running shoe is entirely on the other foot when a retailer wants to carry a brand like Nike in their stores.

So how can retailers prepare for that kind of relationship?

The retailer basically needs to have all their ducks in a row so it’s enticing and very easy for Nike — or any major global brand — to slot the retailer into their system.

EDI opens doors

Of course I might be a little biased, but I think having the right kind of electronic data interchange (EDI) program in place makes a big difference. In fact, many large suppliers (and retailers) have very strict EDI requirements. They often don’t even want to talk to, let alone negotiate, unless you already have EDI.

Selecting an EDI provider experienced with working with large suppliers is also advantageous. They already know what it’s like to bring retailers into compliance for supplier requirements. Depending on the trading partner, they may already have all the EDI requirements for the big brands available or even pre-programmed, meaning they can both set up your EDI system and quickly connect you to your large suppliers.

One thing we always hear when we’re working with a smaller retailer is getting that supplier to slot the new retailer in their list of the other retailers who have asked them to do EDI. Odds are, if a retailer has made it really easy for Nike to quickly connect via EDI mapping they have in place with their other retailers, then they may be more willing to add that retailer to their system ahead of the others. It also has an added benefit of helping the retailers lower their cost adjustments, because they’re meeting the suppliers’ compliance requirements.

Preparation for a good partnership

Often, retailers that work with larger suppliers are adding new competition: Branded stores. Manufacturers like Nike, Samsung, Apple, Coach, Bose, and even Samsonite are competing against retailers with their own stores. Its still worthwhile to work with these big name brands if they fit your business strategy, but it’s absolutely something to be aware of when making your pitch.

Creating a good marketing plan of how you’re going to promote and encourage sales of their product helps. Sometimes brands may even negotiate for placement of items on the sales floor and even submit a planograms. They often want to know which product lines you believe will do well at your store, why you can succeed with them and what sort of purchasing commitment you’re willing to make.

Lastly, once you start working with a large supplier, you might not be their highest priority if you’re a smaller retailer. However, there is at least one way you can potentially get their attention: Data analytics, trend observations and advice. Data that you accumulate could possibly reveal opportunities that could be beneficial to the supplier. If you’re the one to point it out, it may be an incentive for them to make you a more strategic partner.

Before a retailer even approaches a large supplier, they very likely will need to already have an EDI solution, ready to go. They should also gather as much information as possible about what the brand expects from their retailers, before initial contact is made. After the marketing plans and negotiations are hashed out, the work still isn’t over: Continue reviewing data to look for opportunities that can be passed on to the supplier or brand to enhance the trading partner relationship.

Working with a world-class EDI provider like SPS Commerce can help to get you a head start on your quest to partner a big supplier. If you would like to learn more about how you can join a large supplier’s retail network, please visit the SPS website and review additional information. You can also contact an SPS representative.

Scott Bolduc

Director of Supply Chain Strategy at SPS Commerce
Scott Bolduc is a multi-time winner of the Supply & Demand Chain Executive Pros to Know. He has worked with e-commerce retailers on their growth strategies and helped retailers transform their freight spending strategies to maximize efficiencies.
Scott Bolduc

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