Levin's Advice To Vendors: Treat Retailers Individually
By Doug Olenick -- TWICE, 5/17/2004
Indian Wells, Calif. — Adam Levin, of Levin Consulting, discussed nine ways for vendors to boost sales. These included making every attempt to place products at Wal-Mart, to properly utilizing retail sales data. Levin's most important tip was to realize how important Wal-Mart is to the IT category and to not believe the rumors that vendors cannot make money doing business with Wal-Mart. At the same time, manufacturers have to make sure they are in category powerhouses Best Buy and Dell.
"Wal-Mart conducts 18 percent of all consumer PC business, and I expect this to go to 20 percent within a year or so," Levin said. "Wal-Mart, Sam's Club and Costco are the three most profitable retailers to deal with, and you don't even have to get your whole [product] line in, just one SKU."
In addition, Levin said, Wal-Mart sales would be incremental in nature and not robbed from another account.
Getting that single SKU into Wal-Mart can be done, but a vendor has to know the correct approach to take in dealing with this rather unique partner.
"Wal-Mart is different. They never say yes right away. You can't wine and dine them, and they have a different business model. So if you want to do business with Wal-Mart, you must do it the Wal-Mart way."
Levin next two suggestions were similar. If you sell CE, get into Best Buy, which now sells 18 percent of all CE products in the United States and has plans to almost double that to 30 percent in three years, and become involved with Dell if you are an IT company.
Succeeding at Best Buy is a matter of gaining as much share as possible. Levin said this can be done by thoroughly understanding their methodology and offering the retailer multiple or private label brand, which he described as an easy way for a company to expand its shelf presence.
To deal with Dell, Levin suggested dedicating a specific person to handle the account. Dell's methodology, which he did not go into, is so different that it is a full-time job. In addition, making a pilgrimage to Dell's Texas headquarters is a solid move and one that should be done with all accounts. It also does not hurt to bring along a high-ranking executive to meet with a retailer, since this is sometimes the only way to gain access to the upper echelon retail executives
Other sales hints centered on making full use of the sales data provided by retailers. He went so far as to suggest hiring a data analyst to track the trends. This move could pay for itself as the person may mine nuggets of information that can be used to the vendor's advantage, such as when a particular SKU is selling or needs to be pulled and replaced by another.
Devising a good supply-chain strategy is of paramount importance to retailers today. Levin said dealers are more interested in this aspect of the business than merchandising.
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