A Vendor’s Guide to Finding the Perfect Retail Partner

06/09/2022

What is a Retail Partnership and How Does it Work?

 
 At its most basic, a retail partnership is a collaborative agreement between two companies with a complimentary but non-competitive audience. (There is a reason why you don’t see Doritos at your local health food store).
 
Each party depends on the other for different reasons. Retailers depend on vendors for quality products, high-resolution product images, fast shipping times, and accurate inventory and tracking information. Conversely, vendors depend on retailers for brand exposure, marketing, press, and maximizing sales volume. 
 
The overall goal of retail partnerships for both the vendor and retailer, however, is to provide the best experience for their mutual customers. 

 

Why Should Vendors Care About Having a Good Retail Partner?

 

You may be thinking: I supply quality products, have a strong performance history, and have a good customer satisfaction record. Why should I care about who my retail partners are?

 

Any type of business relationship should be well thought out and researched. You and your retail partners may align in shared goals, but it’s important that they also send you orders on time, their expectations are clear and they’re receptive to check-ins.

 

Ultimately, vendors should put in substantial effort when choosing a retail partner in order to ensure that the partnership is mutually beneficial. Does this retail partner have brand integrity? Will they make life easier for you? Do they have a reliable operating cash flow? All of these factors will help you work together efficiently and ensure top-tier customer service.

 

 

 What Should You Look For in a Retail Partner?

 
There are various qualifications that can make or break a successful retail partnership. For your convenience, we have organized them into 3 categories: finances, marketing, and business attitudes. 
 
Finance:
 
1) History and Projection of Sales
 
Before you partner with a retailer, you should ask them for proof to back up their sales pitch. This is your opportunity to find out how well your prospective retailer has reached your target audience with your type of product in the past. Consider asking questions such as: What sales do you project in the next year and how did you arrive at this estimate? Do you have a lot of repeat customers? What can I expect to get out of distributing my products with you?
 
2) Payment Plan
 
It is critical that you have a well-defined payment agreement in place. The agreement should include questions like: How much money is being paid and when? What is the procedure if retailers are late on payments? What efforts will they make to avoid late payments?
 
Marketing:
 
1) Brand Representation 
 
When you take on a retail partnership, you are also outsourcing a large part of your brand representation. In order to keep your brand representation in check, you will want to ensure that your products are adjacent to good brands in-store and online and that your retailer is committed to portraying your products in an attractive way. For example, they could feature your product on the homepage, in newsletters, and coordinate promotions to increase brand value. 
 
While the aesthetics of brand representation are very important, the top priority should be a great customer experience. Because you and your retailer share a mutual customer, both of you have to be equally committed to quality service in order for your reputation and customer satisfaction to thrive. 
 
2) Marketing Assistance 
 
Firstly, you will want to find out if your prospective retailer has strong marketing, advertising, and PR teams. From SEO to email marketing to press releases, you will want a retailer who is well-versed in your target market and knows how to frame your products in a way that will appeal to them. 
 
Importantly, you should ask your retailers how they will assist in executing marketing efforts? If they have any extra costs associated with marketing promotions? How can you ensure that they are marketing your products correctly?
 
3) Target Audience 
 
Ensuring that your prospective retailer actually attracts your target audience is crucial to success. You would not want to pitch a Pandora bracelet to people shopping at Cartier. 
 
It is critical that you choose retailers at which your products will be the most well-received and garner the most attention from your ideal customers. A good starting point would be to research your competitors and to whom they are supplying. For instance, most health food products want to get on the shelves of Whole Foods. You may want to research how to get your products on their shelf. Alternatively, look at your competitors’ retail partners and find what qualities they have that you want in your prospective retailers. 
 
Business Attitudes:
 
1) Organization
 
Organization in a retail partner is critical for a variety of reasons. Firstly, you will want a retail partner that pays you on time using the specified system. Additionally, you will want to ensure that your retailer has good internal systems to track information. This allows them to only sell in-stock items and keep on top of their order statuses. 
 
Lastly, finding a well-organized retailer who works with your existing systems is key. Ideally, they would be integrated with your backend systems, send you orders in your desired format, and receive data from you in the same way that you have already generated it. 
 
2) Good Communication
 
Just like in any partnership, good communication is the backbone to success. This includes everything from clearly setting your expectations upfront to avoiding redundant questions. For instance, your retailers should not ask for individual inventory updates when you have already sent them the entire feed. 
 
Some companies find it easier to partner with retailers in the same geographic area or time zones for consistency and convenience. 
 
It is essential that you and your retailers are transparent with one another from the beginning about your expectations. One of the ways in which your retailers can outline their expectations, policies, and goals is through a vendor agreement. Click here to learn more about them in our blog article.
 
Another way that you, as a vendor, can let your retailers know your expectations is by completing a retailer scorecard. Click here to view our free, downloadable template. 
how to find the right retailer

Examples of Successful Retail Partnerships

 

Now that you have all of the necessary information on paper about how to find a good retail partner, let’s see how these partnerships play out in the real world. The below success stories highlight how strategic retail partnerships are mutually beneficial to both parties and their shared customers.

Amazon and BestBuy’s Story

 

While in some ways Amazon and BestBuy are direct competitors (who doesn’t want the best price on electronics?), there is one key difference that made them an unlikely, but ideal partnership: Amazon is the king of eCommerce and BestBuy is the king of brick and mortar. 

 

Upon the release of Amazon Fire, the company wanted to expand its sales in retail stores and who better to contact than BestBuy? 

 

BestBuy programmed their in-store TVs with Amazon Fire TV. In return, Amazon provided these BestBuy products with preferential treatment on their site, increasing exposure and sales. In other words, Amazon was able to break into the retail space by storm and BestBuy earned a highly sought-after featured slot on Amazon.com.

Casper and West Elm’s Mattress Collaboration

 

As you may know, Casper is a leading mattress brand, but it has no physical retail stores. While its strictly online and easy return model makes mattress shopping easy, many people are still skeptical of buying a mattress that they have never tested. 

 

 

In order to showcase its products in person and appeal more to traditional shoppers, Casper partnered with West Elm, a high-end furniture brand with a reputation for quality. In exchange for helping Casper reach new potential customers and cater to the try-before-you-buy shopper, West Elm earned a huge sales and marketing boost from Casper’s prospects. 

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