Whether you are paying hundreds of dollars annually in association dues or thousands of dollars in buying group membership, you have a responsibility to your business to get a good return on that investment.
Similarly, those organizations you belong to also have a duty to provide services and/or products that are profit-producing for their members as well as for the organization itself.
For individual retailers, because such fees are usually a small percentage of total business expenses, they are frequently overlooked in any consideration of whether the dealer has good reason to continue its membership in the association or group. But the rewards for making hay from either or both of these investments are many.
For example, a well-run trade association can offer opportunities for individual merchants to profit from the experiences of others attempting to earn a respectable net profit from the sale of the same or similar goods or services. Because membership in these groups is usually spread across many regions, there is little danger that sharing this information will make it easier for competition to steal a market.
Then there is the question of who speaks for you on national business issues. Are the tax laws fair? Are military base stores entitled to a bigger discount on the cost of goods? Speaking through a larger association will better assure that your voice is being heard, since the association management goes to bat for the group by lobbying with legislators to assure that members are being treated fairly.
Operating a business today is so complicated and subject to so many new laws and restrictions that just keeping up-to-date requires more legal expense than the average individual entrepreneur can afford. However, your buying group and/or trade association specializes in reviewing new laws and legal issues that affect you, and makes sure that you are informed about them. For instance: Is your supplier legally required to offer the same goods and services in the same quantities at the same price to you and your competitors? If you don’t know the answer to that one, I’d suggest asking your association’s legal counsel.
Due to their ability to combine large orders of merchandise, buying groups offer individual dealers a crack at the best volume discounts, sales training and displays for newly introduced products.
This can involve a change in the store’s image and a retraining of the sales staff, but here the supplier can be of additional help.
Manufacturer-sponsored product knowledge classes are every bit as important as an extra point or two in gross margin. With the high cost of doing business today, it is not surprising that these classes are often available mainly to large volume buyers, although membership in a buying group can put you in this category.
The list of advantages of belonging to buying groups and trade associations is much larger than can be explored in a single column. Both types of organizations rely on members being willing to make the effort to help themselves through active participation. That effort, plus the annual cost of membership, represents a dealer’s investment in the group. The additional profit divided into that investment is the return a merchant realizes, and that is the best reason for being in business.