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Indies should not fear the supermarkets too much ? comparing us to a butcher or baker doesn?t really work because a leg of lamb doesn?t need a repair and a loaf of bread doesn?t need a reinstall. Our customers require upgrades, repairs, and technical assistance on a regular basis. This requires skilled staff who are expensive to train and difficult to retain.

Supermarket sweep

The supermarkets aren’t interested in such services at the moment, because they erode the profit margins on the ‘pound per square foot, per minute’ revenue models. Therefore, it is our services that are the key to our future survival and we must ensure that our service revenues are both profitable and substantial.

We have all seen crazy prices at the supermarket, so it is important to know where many of these prices come from. Sometimes a vendor creates a special production run for just one chain and the specification is lowered to meet a price point and profit margin.

Another cause is a vendor deciding to make a short-term loss on a limited number of items in order to build their brand and image. Often, though, it is end of the line stock. Vendors who are struggling to shift stock place end of line (EOL) products onto supermarket shelves at or below cost price to release capital and build their brand.

But vendors need to be careful with these practices, because consumers grumble when there is no stock and current retailers may become angry when they are denied access to the preferential pricing. Worst of all, it destroys relationships and creates a false price point in the eye of the consumer, making it much harder for the vendors to sell new products at a profitable price in the future.

EOL is an opportunity which must not be wasted. A phone call or email builds relationships and allocating limited stocks at preferential pricing is a great way to reward the smaller and more loyal retailers.

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