Changing your plans to help hungry manufacturers make their 2013 numbers can be very good for profits!
This is the season when manufacturers will often come to you with heavy-up deals to make their numbers for the year. It’s also the season when you probably have your plans in place through the end of December.
Sometimes when I was on the desk, I’d look at the plans I had already put in place and then at the heavy-up deals just presented to me — and go with the hot deal. I was always surprised when some of my competitors didn’t.
HELP EACH OTHER
After all, if the manufacturer helped me last year, why shouldn’t I help him this year? If a manufacturer offers me a deal to get extra cases during a period of time, and I refuse it, he might refuse me when I need help.
And what’s more, if I don’t take the heavy-up deal, my competitor will. I’ll get hurt, and I’ll also look like a dumb-ass and have to answer some questions from above. I might not be able to fit in the heavy-up deal right away, but I can get it in by the end of the year or I can take delivery to the warehouse in December and promote in January.
I remember a time awhile back when we needed to make a number on juice and it was at the end of the year. Our holiday plans were in place. As a company, we decided to make the purchase and force out the product to the stores due to warehouse space. We were able to get the product on sale the second week of January. I got my incentive check from the company and we were all happy campers.
This needs to be a win-win. But keep in mind that at this time of year, manufacturers and their reps are hungry to hit their sales goals. And if they haven’t spent all of their money with Account A and aren’t going to spend more with them by the end of the year, they want to put the funds somewhere that will promote product for them and move cases.
The only thing to be cautious about here is items with short shelf life. You probably won’t have to worry about a lot of cheese items or margarine, but there can be exceptions.
JUST MOVE IT!
Some manufacturers may not even care about being in the ad — they just want to move some cases. They may get it out there in two weeks at a reduced price, but there may not be lead time for an ad. So don’t think twice about taking advantage of the chance to run something at a hot price — jump on it before someone else does. As category managers, it’s your responsibility to get the best deal for your company!
Think it through. Are you making your profit targets? What’s competition doing? Will the deal give you a competitive advantage? Will it help make your volume/bonus targets? Will it negatively impact reclamation? Is it the right thing to do for your category?
Bottom-line: don’t overlook the situation when your manufacturers come to you with year-end deals, but do make sure it makes sense for your business.
– Johnny Harris
Johnny L. Harris, president of Johnny L. Harris Consulting LLC, Fort Mill, S.C., can be reached at 803-984-2594 or firstname.lastname@example.org.