3 Increases from Private Label and Exclusive Vendor Commitments
While retailers may receive a wide range of benefits from securing private label and exclusive vendor commitments, there are three advantages that rise to the top of the list:
- Increased Customer Credibility
- More Effective Sales Presentations
- Greater Profit Margin
Increased Customer Credibility
Consumers believe that private-label programs represent a good value and that purchasing private-label products makes them a smart shopper. It’s easy to see how this thinking has grown and taken online sales along with it. Today’s consumers clearly understand that the closer they can get to the manufacturer the better the value.
Having private-label programs sends the clear message that the retailer has eliminated as many middlemen and unnecessary expenses as possible and that they have the same commitment to value as their customers. This makes it easier for the customer to make their first purchase. Once they do, customers are more likely to have confidence in the value of every purchase they make from this retailer.
More Effective Sales Presentations
Remember that selling is all about the transference of belief. Salespeople always sell private-label programs with greater confidence because they believe in their quality and value. These beliefs are reflected in the sales presentation and tend to create greater customer satisfaction.
It is even better when salespeople know that they are the only ones in their area who have the line. Here’s why: over the years furniture vendors have created variations of the same basic products and sold them to competing retailers. These lines are usually priced differently from one retail store to the next. These variations have made it increasingly harder, and more frustrating, for customers to comparison shop in stores. From the customer's perspective, changing one or two things about a product rarely justifies the difference in price.
Nothing has a greater impact on the quality and effectiveness of a sales presentation than when a salesperson can look the customer straight in the eye and assure them that, not only does their product represent a great value, but that the customer won’t find it anywhere else.
Greater Profit Margin
When a retailer makes the commitment to work with a manufacturer on something as meaningful as a private-label program, they give that manufacturer more than just a steady stream of income (as if that weren’t enough!). They also give them the opportunity to build a reputation as a credible brand and the momentum they need to strengthen their business.
In return, the retailer has the right to expect a little bit more from that vendor once they've entered into the partnership. The retailer should hold the vendor accountable for:
- Going the extra mile when providing customer service
- Providing more meaningful support, such as sharing insights into developing consumer trends
- Effective sales training
- And, of course, better pricing and better margins.
In conclusion, today's manufacturers need to do more than just tell the retailer they are grateful for their business, they have to prove it.