I was in a newsagency yesterday which had everyday pens from four suppliers. Their sales data and the ranges available suggest that stock from two suppliers could achieve the same, and possibly better, result.
The newsagent is reluctant to cut a supplier because of long term relationships and that the companies service the stock. I explained that this is the problem because while servicing keeps the pens looking good, it ensures his stock holding costs are higher than they should be.
We talked about the challenge of pulling out stock from a long term supplier and thought it would be a good topic to raise here.
Is supply from two pen companies ideal or does it limit selection too much?
Do you reorder based on sales or do you let the pen companies order based on what they think?
With pens accounting for around 30% of stationery (excluding ink and toner) sales, it is important we get the maximum efficiency from this key category.
In my view, the best way to achieve this is to order based on facts and not relationships. This means newsagents taking control and stopping relying on representatives of suppliers to generate orders.
What do you think?
Being on both sides of the fence now I would like to think (previous life) that relationships count for something. The better the relationship would suggest better service. Its just human nature. On the flip side business decisions need to be made.
I would not and don not run with four suppliers, how many cheap biros do you need, how many gel pens etc. Yes some customers have become attached to a brand. I agree that with sales data and some observation you can better range your pens.
Finally and unfortunantely I find that if you let pen companies order you will get more than you need. But they can be very good when you give them some guidance like all suppliers that order on your behalf. If I get landed with stock I didn’t want its up to me to sort that issue out and reaffirm what the boundaries are to conduct business.
Hi,
I am new to this industry , do you have any advice on how to relay our pen section ? There are so many different pens and suppliers how do we pick which pens to stock ? any help would be appreciated.
30 years ago Dick Smith in his stores (when he owned them)imported a capacitor from vietnam (generic product) re labelled it Dick Smith and threw out all branded capacitors except one.
The result One cheaper and housebranded with greater margins and 2 a choice for the consumer who didn’t trust the housebrand.
Piy we don’t have stationery housebranded that is cheaper with greater margins.
John, If you have a point of sale system in the business with good sales data, start there. What is right for your business will be shown in the sales data.
If you do not have good sales data, take your time to watch what happens over the next few weeks. Also, talk with staff.
Make a decision, try it, measure and if it does not work as expected, change again.
All good advice already – the bottom line is that it’s your business and if you don’t know it well enough to determine the orders you’ve got a problem.
Thanks appreciate your help.
Further more on this topic Woolies has really set the trend with range. They stock lower, middel and upper in most of their departments. They have effectively made the big brand stand out more and given more chance to their own brands. We can learn some lessons here, not as much as they have but certainly they have done this through research, data and who is giving them a larger margin and turnover ratio. You can’t do that with a cash register.
we used to have all suppliers pens and i can say we have the widest range among newsagents, but trends have change. it is not economical at all and 2 suppliers more than enough to service customers. it cost us $10k+ to throw away dead pens and markers which of course the suppliers won’t take them. now we have 1 main supplier and I pick only top sellers among the rest.