It is always easy in retailing to fall into the trap of ‘we’ve always done it this way.’ Your choice of suppliers and the management of them will be no exception to this.
The classic way to select suppliers is by product categories, however a much more imaginative and often more profitable way is to consider your products by the role they have in your business.
Do you have products that always need to be available but have no urgency, compared with products which need to be on the shop floor as soon as possible, or they will miss the trend?
How much of your assortment is highly price sensitive, and how much has flexibility and variance in the pricing?
What products most reflect your brand values on quality, design and fashionability?
These different ‘product roles’ should drive your decision process when selecting suppliers.
What attributes can individual suppliers brings to each product? Can they give you the price benefits, speed to market, reliability, consistency of quality, availability and margin, that you need?
How much additional value and how much margin could you achieve by matching the benefits of each supplier with the attributes of each product, with the expectation of the customer for that product?
Is it time to go shopping for suppliers?
Listen to Tim Radley explain to his students the importance of looking at product role when selecting suppliers.
The audio extract is part of a brainstorming exercise which helps them to identify opportunities within their own retail business.