One of the many challenges that Internet brought into the retail business is the ease the consumer can compare prices.  This gives an enormous power to the costumers. Online has really brought the true competition into retail business.

The price transparency brings a huge pressure on the margin/ profitability of the retailer. Wall Street Journal debates in this article ways to use in order to limit the number of bargain hunters coming onto your virtual or physical shop.

In a very competitive and open market, price setting has become more complicated than ever.
In this post you may find a few things to take into account when setting your retail prices.

After some time spent as a professional retail buyer in different organizations, I became aware of the universal and seemingly never-ending conflict between buying and sales/marketing (operations).

In simple words the whole conflict is reduced to “purchasing did not get us the right product/ right prices” while buyers blame “operations are not capable of selling our wonderful products”.

There are many reasons why this conflict is always bubbling over. It has to do with organizational culture, with the strong ego of company leaders, with the lack clear management accountability, etc.

The one key-word, actually the one key-action everyone forgets about is cooperation.

David Aaker wrote a great book about this organizational internal conflicts and he explains how this so-called “organizational silos” becomes obstacles to effective and efficient development of a strong brand and company.

Aaker uses a silo as a metaphor for “organizational units that contain their own management team and talent and lack the motivation or desire to work with or even communicate with other organizational units.” Organizations must find out how to remove the problems caused by silos without losing the benefits they can provide.

In his book called “Spanning Silos: The New CMO Imperative”, Aaker provides a road map that gets different parts of an organization to collaborate together. His book is full with real life examples, besides the academic and theoretical information.

I consider the below video presentation about his theory to be of great value for any retail professional. I also recommend his book, one of the best I ever read on the topic.

Bargaining, auction or long time partnership? Basically you can reduce all to this question when it is about to consider the value of your business relationship.

Bargaining or auctions to get the best possible prices are not necessarily negative negotiation tactics. But the way you do it may harm the business relationship. So instead of thinking of “if to do it” maybe re-think on “how to do it”.

In a long time partnership with a supplier, bargaining for the prices might not be the best approach as a true partnership will bring you on a long run more value added than one time extra margin or extra sale volume. What you may gain via an aggressive price or commercial terms improvement you may loose on the other essentials aspects of the business.

In order to avoid subjectivism, just put yourself the below questions:

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Mastery and Keith Cunningham

I had the chance to attend in 2008 a seminar about entrepreneurship of one of the world’s foremost and  most sought after business building experts: Keith J. Cunningham (http://www.keystothevault.com/)

If you ever read the famous best selling book “Rich dad, poor dad” by Robert Kiyosaki, you maybe know that a good part of the content of this book is inspired by Keith Cunningham, as he is the friend and mentor of the author.

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Welcome!

Welcome! This is the first post on retailpurchasing.com

retailpurchasing.com is a blog offering information and advice in purchasing for retail owners, wholesalers and professional buyers.

My name is Bogdan Pasat. I got my first job in retail 14 years ago. Since then I grew from being a salesman to shop manager, etc. up to division purchasing manager controlling a yearly budget of 80 mil USD. Today I am back in sales and I am in charge with sales and marketing with a worldwide leading consumer electronics brand, managing the activity in two European countries.

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