expected margin on the product. Margins can vary based on manufacturer and buying levels. Evaluating your return on the opening order investment is an important step in establishing this new vendor. Once you’ve established a fit for your business, compet- itive advantage and the financial aspects of opening up a line, you should do a deep dive into the operational ele- ments. These include: Sales Support (Sales rep and back office) ▪ Business-to-business system ▪ Product availability ▪ Delivery timeframe ▪ Each of these operational components will play a critical role in your success with the new product line. First is your relationship with your sales team. You will need to work on these relationships and gain a thorough under- standing of the team's knowledge, their responsiveness to questions, how well they respond to email, their normal com- munications and their ability to resolve issues that come up along the way. Your comfort level in working with the vendor’s team is paramount when making the decision to invest. Robust business-to-business systems are essential. Every vendor has their unique B2B system to facilitate working with their dealers. Systems that allow you to check inventory and place orders efficiently will enable you to improve inventory management and take advantage of at-once, timely ordering RETAILING continued
for customers. As mentioned, each vendor has a unique sys- tem and learning each system takes time, therefore the ven- dor’s application should also be intuitive and easy to navigate to optimize your time. Even today as we distance ourselves from the pandemic, supply chain challenges may persist. When deciding to bring in a new product line, you should research past performance and understand the current inventory levels of specific prod- ucts you plan to purchase. Many times, popular products are not available. When products are on backorder from vendors, they should give you an estimated availability date. How well this new vendor performs with inventory and backorder man- agement needs to be evaluated. Finally, you should be aware of how quickly products that are in-stock are delivered. Given the proximity of the distri- bution facility, you may see orders show up in the store within one or two days. Conversely, if the warehouse is distant, orders can take ten days or more. Quickly receiving a product is preferable, but may not be practical for all providers. You will need to make sure you factor in this operational aspect and be comfortable with the delivery timeframe. Opening up new product lines in your dive shop is exciting. As you look to gain a competitive advantage or keep pace with
innovation in the industry, you will be faced with the choice of establishing a new dealer agree- ment. While it might seem like an easy decision, you should ensure that you do a little homework before diving in.
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