Better relationships between suppliers and wholesalers can help both to grow their businesses. Helena Drakakis looks at five great ways to improve working practices and boost sales
The relationship between supplier and wholesaler is a crucial one, and building good relationships in the supply chain is vital in increasing sales. At a recent seminar organised by the Federation of Wholesale Distributors (FWD), suppliers and wholesalers gathered to discuss how both parties can better engage with one another.
There are strategic gains to be had in getting it right. Currently valued at £30bn, the wholesale sector is set to expand as online ordering gathers pace and delivered wholesale steps up a gear. According to research by the IGD, convenience wholesale will grow by 29% in the next five years, and foodservice wholesale will grow by 20%, compared to 8% supermarket growth. “There’s a good reason to put people, resources and investment in the wholesale channel, and the best way to approach the market is to let people grow and learn and for relationships to be developed,” says the FWD’s communications director, David Visick.
In this fast-moving landscape, what are the best ways in which suppliers and wholesalers can create win-win relationships?
1. Meet regularly
Suppliers that listen to their customers and tailor their strategy and offerings accordingly get closer to understanding what’s working, what’s not, and, more importantly, the reasons why. Boost Energy Drinks strategy director Kirsty Birks says: “One size doesn’t fit all. The wholesale channel is diverse and we can’t make assumptions.”
She adds that for the past 10 years, Boost has had a biannual ‘health check’, during which the company interviews wholesalers and retailers about what’s going right and what’s going wrong.
“Good partnerships have shared objectives,” Birks says. “Telling our customers what we’re doing and what hasn’t worked, and being honest about it, creates an opportunity to agree on how we are going to move forward.”
If suppliers aren’t touching base with you, learning and adapting to suit your business, suggest they do. A great product needs a great strategy behind it, so it doesn’t only have a place on the depot shelf, but comes off the shelf and into retailers’ hands, too.
2. Share data
Earlier this year, discount chain Poundland followed in the footsteps of wholesaler Costco and retailers Marks & Spencer and One Stop by making its data available to suppliers. The move was designed to give them insight into how well their products were performing, and to help them effectively manage range and distribution. Data sharing is on the rise, but suppliers and wholesalers are still uncomfortable about the practice. However, traditional ideas about keeping information for internal business intelligence will not be enough in a forward-thinking, multi-channel wholesale world.
“Data insights are absolutely paramount for better customer and supplier engagement,” says Mushtaque Ahmed, chief operating officer of JJ Food Service, which is still believed to be one of the only wholesalers to share basic elements of the business such as product prices.
Consider how appropriate data sharing could benefit your business. If you want data insight from your suppliers, impress on them how mutually beneficial that information could be.
3. Work together to add value
Marketing is changing. Instead of explicit product selling, wholesalers such as Bidvest are embedding their brands in users’ lives by adding value. They have been working with suppliers to support their chef development team at customer experience centres, and by asking them to participate in customer events and conferences – supplying speakers or food, or offering guidance and advice about government standards and regulations.
Sarah Whiddett, Bidvest’s head of insight and customer experience, says suppliers play a vital role in helping the company deliver services to its customers.
“Our very best partners work closely with us to develop interesting and useful added-value content,” she says. “We love to work with suppliers big and small who really understand their customers and market, and who have a passion for delivering more than just great food, who are innovative and creative, and who come to us with ideas and opportunities to help make our customer experience even better.
“We see our relationship with our suppliers as a partnership – we rely on each other, and that means we seek honesty, transparency and, most important of all, reliable and sustainable service.”
If your marketing strategy is geared towards adding value, discuss with your suppliers how they can help you to build your brand.
4. Educate customers differently
There are categories that could be selling better in wholesale if more was understood about them and their potential in the marketplace. For example, according to wine giant Concha y Toro, the wine category is worth £5.1bn – almost twice that of soft drinks – but requires more category expertise in the supply chain.
The director of East End Foods, Jason Wouhra, agrees that spirits are a far easier sell in his Birmingham-based depot because brands are recognisable. However, he’d like to expand his wine offering and find new ways of educating the retailer in the selection.
“Many of my retailers have an affinity with whiskeys, but they haven’t quite got there with wine,” he says. “We need to make it as easy for retailers as possible. Cards with a tasting note and a picture of the bottle would really help our wholesale customers, and they’re not difficult for manufacturers to produce.”
Experiential outings and tastings organised with the supplier, for example, can add a new dimension in giving retailers the confidence to sell products. Meanwhile, Concha y Toro launched an app this year called Wine Wise to educate retailers about the category, and wine company Penfolds will be helping Wouhra’s potential customers understand its range by having its brand ambassador sell wine at a dinner and wine-tasting event aimed at corporate directors and decision-makers.
“Wholesaling isn’t wholesaling as it was 10 years ago – suppliers and wholesalers need to be thinking differently,” Wouhra says.
5. Deliver winning online and in-depot packages
According to Coca-Cola Enterprises (CCE), good online merchandising, the right imagery and good descriptions all help to maximise sales. Yet, a common complaint from wholesalers is that these elements are missing. Good imagery is particularly important, says CCE’s national and key accounts manager Amy Palmer.
“More customers are using mobiles to perform their shopping tasks, so all product information, including imagery, must be scaled for tablet and mobile,” she adds, noting that when it comes to price-marked packs, single images are always preferable. “Wholesale customers prefer individual product imagery as opposed to cases; this is because it is how their customers will see the product displayed.”
Tailoring the offer also applies to the depot floor, suggests East End Food’s Wouhra. “Good suppliers create an understanding of what we really need. They have a long-term view and they take the time to know our business.
“Bad suppliers don’t tailor their offer. For example, I have a huge 120,000sq ft depot, and I have seen suppliers deliver 2ft‑wide display units. Which just makes you think, ‘What exactly is the point in that?’”