In an open letter to growers, a Canadian retailer took time to examine the all-important partnership between nurseries and independent garden centres. This commentary is meant as constructive criticism and a method to open lines of communication.

CAN GROWERS PROVIDE FAVOURABLE TERMS FOR INDEPENDENT RETAILERS?

Big box stores have a major effect on wholesalers. Mega-stores can be slow to pay, or even refuse, potentially putting a wholesaler out of business. Is there an incentive for retailers to pay promptly? It’s not in the independents’ interest to lose a wholesaler from the market. The smart retailers know and appreciate that and ensure their dealings with wholesalers are positive. Those vendors who offer reasonable fall shipping rates with late spring payment terms (to retailers able to store their fall purchases properly) will find favourable results.What retailer would not want to work with a vendor who offers less work dealing with shipping in the spring, as well as the ability to pay bills when cash flow allows, after the rush?

FREIGHT

Shipping green goods is expensive. For a garden centre, freight costs are a necessary part of doing business. No one disputes that the vendor must recover the money spent to ship product. But, there are some freight-related problems that need addressing.

Fuel surcharges always seem to crop up as an extra charge on a quoted freight rate, regardless of whether diesel fuel actually increased. Retailers should know the real net cost of the freight ahead of time. If a load is split with nearby garden centres, the freight rate that is charged often is not proportional to the size of load being shipped. Perhaps a per item freight rate, with a minimum number of items required, could be considered.

While getting comfortable with a freight company makes sense, wholesalers often do not research alternatives. Look at the many nursery stock vendors in Niagara, who ship to Toronto. Why is the freight rate from one wholesaler out of line with another? The discrepancy is easily noted. But, if you do not want freight costs to discourage a retailer to buy, then they should be made aware of the going rate.

Sometimes fragile and perishable product is crammed and stacked on trucks. Shrink wrapping may be a great way to reduce freight costs. But, if the goal is about offering better quality than the big box merchandiser, how is that remotely possible when plants arrive in worse condition than those found at the big box stores? Why would a grower wreck his product during the last hours in his possession? Retailers must say no to this practice, and growers should refrain from using this system as the only method of delivery.

PRE-PRICING

Pre-pricing benefits the independent retailer through lower labour costs. Better-looking tags are certainly another benefit.

The cons of pre-pricing are:

Consumers will readily see that the pro-duct sold by independents and box stores is the same, even if it’s not from the same grower. This is a particularly acute problem with branded product. This defeats the goal of establishing that independents sell superior plants. One possible solution is that wholesalers have two pre-pricing methods, one for independents and another for mass merchants. In the case of branded product, it will be up to each retailer to determine if carrying such items is in their best interest. Perhaps branded merchandise becomes loss leaders to battle the box stores. Several vendors offer free pre-pricing. If retailers decline the service, should the costs remain the same to those who choose not to have it done? If not, why not?

USEFUL AVAILABILITY BY E-MAIL

Wholesale vendors market their products primarily through sales reps and trade shows. Sales reps are continually pressed for time to serve their huge territory of customers. In this day and age of camera phones, e-mail, etc., the capacity of a sales rep to present what is moveable, right at the moment, has never been better. The box stores want fresh product delivered, stocked and saleable on a weekly basis — and they get it. Lower-volume independents may not receive the same level of service. But, they must adapt to the reality of just-in-time inventory. Knowing what the vendor has in stock, that is good right now, is more important than ever. In this regard, marketing is inconsistent across the industry.

The days of wholesalers waiting until January to get their acts together for spring are almost over. The best wholesalers have pricing, availabilities and promotions ready in October. Many wholesalers and retailers need to awaken to the fact that winter is a good time to rest, recharge, renovate, work on marketing, etc. There are strategic advantages to take care of the green product purchases at this time. Fall ordering means that retailers can focus more on Christmas business.

WORTHY SALES REPS

Wholesalers must determine if independent retailers are a preferred target market. For those who don’t want independents’ business (too much hassle, too fussy, smaller volumes), then developing a sales force is of little interest. It has become more difficult for retailers to rely solely on reputation to determine the level of product quality from a vendor through a telephone order. For those retailers who purchase this way, they must be aware of potential consequences.

It is imperative that wholesalers ask inside sales staff get out of the office and into the yard, to see and know what is at peak, and then have the tools to turn that sale (see e-mails, etc., above). Many inside sales staff for major green goods vendors rarely have time to know the inventory and its con-dition in the yard. How many times have you heard the expression, “I’ve heard that they are pretty good,” from a salesperson? How much more convincing would it be if he had actually seen the product? What is the point of having a sales force if the service that the retailer receives (at an increased price or commission) is no better than suppliers who don’t have sales people? Too frequently inside sales earmarks a group of items for sale, and then flogs them on price. Those firms without a sales force can easily do the same thing. A picture of the product online is worth a thousand words, and will assist the retailer in closing the sale and confirming that the wholesaler’s staff actually believes what they are saying. Also, those responsible need be familiar with image resizing. No one wants huge file downloads. Retailers who ignore the advantage of e-mail or web-based marketing (too busy, not familiar enough with computers, etc.) to determine what their vendors have that’s hot “right now” will miss an opportunity to have sale- priced fresh product that can be quickly turned.

PROACTIVE PRODUCT SALES

It is important for independent retailers to make money on every item, and to have merchandise on sale throughout the spring, as well as the rest of the year. Too often, the only option open to a retailer is to reduce margins on existing products. Innovative wholesalers are providing early quality items and taking a little less profit, so the retailer can use these items as loss leaders.

Most retailers can identify a dog item that a vendor is desperate to unload. They are not interested in assuming responsibility to stock, care for and sell this item for the wholesaler after the rush is over. Wholesalers must be proactive with these items early (October, November) by identifying them the previous season, so that independent retailers have enough time to structure their spring and early summer campaigns.

VOLUME REBATES

There are three ways for a retailer to obtain good prices. They include discounts off list price, discounts on sale items, and a rebate on volume. If the box stores have pushed pricing to unheard-of levels (which they regularly get), and the independents know it, then there should be some incentive for the independents’ continued support. Retailers don’t have time during the season to continue negotiating the best price on every single order. Those who think they are making a good deal aren’t taking into account the cost to make that deal.

The supply of nursery stock has grown dramatically. Anyone who sees the expansions of the major players knows this is true. Easy sales to the U.S. market with our cheap dollar may not be so easy now. Do wholesalers want to rely largely on sales to landscapers, mass merchandisers and the U.S. market to increase sales, when market conditions change? Wholesalers, who don’t consider employing all three discounts in their pricing structure to retailers, must understand why retailers become fickle.

REALLY CHEAP SAMPLES

It’s amazing how this can work. A sample of something hot or sellable that costs the retailer very little and can be turned quickly, will go a long way to generating a full-priced re-order and favoured purchasing status.

CONSISTENCY, CONSISTENCY, CONSISTENCY

No one expects a grower to produce everything equally well every year, but product should be of consistent quality throughout the season. Better to be out of a product, than to ship plants that are not as good as the original order. Those growers who can’t produce a consistent product, year after year, will pay the price, as retailers tire of the what-am-I-going-to-get-this-time game. Retailers have to make the best available margin on their soft goods. They can’t do that unless the product is visually top notch.

RETAILERS HAVE RESPONSIBILITY

There are four important points that retailers must follow to warrant investment by a wholesaler.

• Pay on time.

• Buy consistent in volumes. Maybe it is not always the same product, but should be at a similar dollar value.

• Never accept inferior product. If you do, and it doesn’t move, you only have yourself to blame.

• Know how to keep product looking good throughout the season and keep your credits low.