3 Realities All Store Owners Need To Know About Exclusivity
For the owners of retail stores, there is nothing that can get their blood pumping quite like the prospect of exclusivity.
It doesn’t take a retail genius to see why this is the case. Exclusivity — when a product manufacturer or inventor agrees that only one store will sell their product, often for a limited period — is a surefire way of giving a store a unique selling point. As a retailer, if you can offer something that literally no other store can, then you’ve got an immediate advantage that you can use to further your business.
The only problem is… exclusivity can be a messy, difficult aspect of retailing to manage. If you’re a retail store owner and you’re tempted to offer a supplier a deal for exclusivity, here are a few things you need to know before you sign on the dotted line…
#1 – Suppliers don’t always embrace exclusivity
As appealing as exclusivity is for you as a retailer, you have to be aware that suppliers don’t see the idea the same way. Where you see exclusivity as genuinely beneficial and wonderful, suppliers see it as an uncomfortable restriction, even when they are fairly compensated for the deal. It’s only natural that suppliers want to see their product in as many stores as possible, after all.
As a result of this supplier dislike, it’s worth considering exclusivity carefully. If the product they are selling is genuinely great, you have to be sure that the supplier is happy with an exclusive deal. If they aren’t, you run the risk of souring your future relationship and potentially limiting your access to a great product as a result.
How can you be sure that a supplier is happy with an exclusive deal? Simple: wait for a supplier to offer such a deal, rather than you outright asking for it.
#2 – You have to be prepared for higher costs
If you are going to purchase the exclusive rights to sell a product, you’re already going to be spending more than you usually would— that’s one of the downsides of exclusivity deals. However, you have to factor in the fact that an exclusive deal also requires additional investment on top of the higher purchase price.
Why? To spread the word, of course. There’s little point in having an exclusive line if you don’t market to tell your customers (and potential customers) about it; no particular advantage to that line if you don’t invest in a POS display to showcase the product you’ve worked hard to be the sole seller of. It’s therefore imperative you’re happy with the enhanced costs of exclusivity, and have budgeted to ensure that you’re still going to be able to generate a decent profit from the deal.
#3 – You might be wrong
It’s not a pleasant notion, but it’s one you have to consider. Retailers usually seek exclusivity because they are sure a product is going to be a hit… but what if you’re wrong? It’s impossible to predict the future of a product correctly every single time (as many retailers and manufacturers have discovered to their cost), so you need to be cautious with exclusivity deals, and only ever issue them when you’re absolutely certain the product you’re being offered is an absolute must-have.
With the above in mind, you can be confident your exclusivity deal will be nothing but beneficial to your store. Good luck!