Negotiating With Product Suppliers: What You Should Know

One of the hurdles that comes with operating a retail store or business is negotiating with product suppliers. Unless you plan on manufacturing the product yourself (which typically doesn't happen), you'll need a supplier or distributor to sell your store product. Unfortunately, many new retail store owners fail to realize the importance of negotiation, resulting in high markups with minimal profit margins.

Why Negotiations Are Important

Negotiating with product suppliers is important because it keeps your prices down. When you're able to buy product for a lower price, you'll reap the benefits of a higher profit margin once a customer buys it. Here's a scenario to consider: let's say a pair of jeans costs you $10 wholesale from a distributor. Selling these jeans in your store for $25 would yield a $15 profit margin, which is an excellent return on your investment. If you paid $20 for those jeans, though, you would only see a $5 profit margin.

Communication Is Key

When it comes to negotiating with product suppliers, communication is key. Just because a supplier or distributor has a “buy” button on their website with a certain price listed doesn't necessarily mean you have to pay that amount. Contacting them – whether it's over the phone, in person or through email – could result in a lower price.

Open the lines of communication by introducing yourself to product suppliers as a prospective buyer. Let them know a little bit about you and your business, along with your interest in their product. Don't make any offers to buy their product just yet, as price negotiations should come later.

More Product = Lower Price

Typically, the price of a particular product varies depending on the quantity purchased. The more units a client purchases, the lower price-per-unit they'll receive. Product suppliers and distributors do this to encourage clients such as yourself to purchase in bulk.

Talk with product suppliers to see what kind of discounts they offer for bulk units. Assuming it's a safe product that's easy to move in your store, opting for wholesale units could significantly improve your profit margins.

Simple Ways To Boost Sales In Retail Jewelry Stores

Retail jewelry is an exciting and rewarding industry that allows business owners to develop lasting relationships with their customers. If you have a natural eye for precious jewelry and enjoy meeting new people on a regular basis, then you'll fall right into place here. But like all businesses, starting a new retail jewelry store doesn't necessarily guarantee your success. If you fail to produce enough sales, your business will drop into the red zone, making it increasingly more difficult as time progresses. The good news is that jewelry store owners can boost their sales by following some simple steps.

Offer Holiday Sales

If you aren't offering special sales and promotions on your store's jewelry for the holidays, you're missing out on one of the easiest ways to generate more sales. Whether it's Valentine's Day, Mother's Day, Christmas, etc., people love to buy jewelry on holidays; it's just that simple. You can maximize your holiday sales by offering steep discounts and promotions around this time.

Don't just mark your prices down, but also consider releasing exclusive, limited-time products designed especially for a particular holiday. For instance, you could release a special white gold heart-shaped pendant necklace for Valentine's Day. As long as you have a strong marketing campaign focusing on this item, you can expect to see some serious sales before the holiday is over.

Create an Online Presence

I know what you're probably thinking: why do I need a web presence if my jewelry store relies strictly on local sales? Well, there are several benefits to having an online web presence, one of which is the transparency it creates. The old days where consumers used a phone book to locate a store's physical address or phone number are long gone. Now, most people use the internet to find this information. Operating a retail jewelry store without an online presence could result in potential customers not being able to find your address, phone number or other contact information.

Even if you don't intend to sell your jewelry online, you should still invest some of your resources into creating an official website for your brand. The time, money and energy it takes to launch a website is a small price to pay for the benefits it provides.

Offer Services

In addition to products, jewelry stores can also earn revenue through services such as ring sizing, cleaning and engraving. If you own a retail jewelry store, make sure you encourage customers to try out your services. This is great way to earn additional revenue on your product sales.

Note: you can encourage customers to purchase your store's products by offering free sizing and engraving services.

What Is a Mystery Shopper?

If you’ve worked in the retail industry long enough, you’ll eventually hear about mystery shoppers. Hundreds of the nation’s leading retailers use them to conduct quality assurance (QA) tests. However, even some of the smaller retailers are now taking advantage of mystery shoppers. Unfortunately, there’s still a lot of misinformation floating around out there regarding mystery shoppers are how they work. This bad information has led to confusion among certain retailers. In an effort to separate the facts from the fiction, we’re going to talk about mystery shoppers and their purpose in the retail industry.

Mystery Shoppers: The Basics

A mystery shopper is exactly what the name suggests: a person working on behalf of a market research company or internal division of the company whom pretends to shop as a normal customer with the purpose of gaining information about the store’s products and/or services. Employees working at the store are typically unaware of the mystery shopper’s presence. They assume the shopper is just another ordinary customer browsing through the store.

Benefits of Using Mystery Shoppers In The Retail Industry:

• Identify problem areas related to customer service
• Identify employees whom perform poorly at work
• Ensure the store is clean, organized and follows all of the proper safety guidelines
• See how employees interact with customers. Are they greeting customers who enter the store?

The entire purpose of a mystery shopper is to be a fly on the wall while the business performs their normal operations. When the owner or executive of a national retailer shows up the store, employees will instantly know who they are, and as such they will be on their best behavior. But when a mystery shopper shows up to the store, they will continue to operate normally without knowing that someone in the store is watching their every move.

History of Mystery Shoppers

Some people assume that mystery shoppers are a relatively new phenomenon which has appeared in the past few years; however, this isn’t the case. According to reports, retailers began to use mystery shoppers to gauge the performance of their employees dating all the way back to the 1940s. Over the years, mystery shoppers became commonplace in retail stores, health clubs, motels, movie theaters, restaurants, hospitals and more.

Hopefully, this will give you a better understanding of mystery shoppers and their purpose in the retail industry.

The Do’s and Don’ts of Niche Retailing

Thinking about owning a retail store? While you can always go broad by offering a wide range of products, a smarter solution is to target a particular niche. This process, known as niche retailing, allows business owners to laser-target a specific demographic based on their product. However, there are some important do’s and don’ts niche retailers should follow to ensure their business is a success.

Do: Choose a Niche With High Margins

Let’s face it, you aren’t going to experience any serious level of success selling products with low profit margins. When you’re choosing a niche for your retail store, pay close attention to its profit margins. The electronics niche, for instance, typically has a low profit margin, which is why big-name retailers dominate it. Jewelry, apparel and fashion accessories, however, tend to experience higher profit margins.

Do: Focus on Your Niche

If you’re going to take the route of niche retailing with your business, you should stick with your niche until you’ve completely dominated the market. One of the biggest mistakes niche retailers make is trying to expand prematurely. Let’s say you own a bathing suit store; wait until you’ve built up a sizable following of loyal customers and clients before you venture into things like apparel and beach accessories.  There’s certainly nothing wrong with selling these items, but it should only be done once you’ve established yourself as THE leading bathing suit store.

Don’t: Attempt To Enter a Competitive Niche

Research and planning is critical to the success of a niche retail store. Before you even think of signing a lease and opening a store, check to see what the competition is like. If there are half a dozen similar retailers selling products in the same niche nearby, you’ll either want to move to a different location or choose a new niche. This doesn’t necessarily mean your business will fail in a crowded niche, but it will certainly make things harder.

Don’t: Overlook Customer Service

Regardless of your store’s particular niche, you shouldn’t overlook the importance of offering exceptional customer service. As a niche retailer, you want to encourage customers to keep coming back for future purchases. If they make a single purchase and are never seen or heard of again, they’ll likely take their business to one of your competitors. Maintaining a friendly attitude and helping customers find what they need encourages them to return for future purchases.