Retailers can improve their stores' sales and profitability by taking full advantage of the services offered by pet specialty distributors.
The pet industry seems flush with retailers that have mastered the knack of getting customers on the sales floor and keeping their bottom line in the black. However, as the saying goes, no man—or woman—is an island; and the same logic can be applied to pet retailing. After all, behind every successful retailer is a great distributor.
In the independent pet retail channel, distributor relationships are the cornerstone of a store’s operations. These days, pet industry distributors not only provide stores with products, they offer a variety of services that nurture retailers and ultimately help them grow their bottom line. However, cultivating successful relationships with distributors is more complicated than simply picking one at random and placing an order. Retailers must be prepared to align themselves with the right distributor partners and do their part to make these partnerships flourish.
“It’s all about building the relationships,” says Bob Merar, president of General Pet Supply, a Milwaukee-based pet product distributor. “We are all so busy that we forget to take the time to build the relationship, trust and confidence. The retailer needs to let the distributor show them how much automation we can bring to their company, which can, in turn, save money and allow them to make more money.
“The retailers have to start trusting that the independent distributors are there to look out for their best interest and make sure that they are profitable and successful, because that’s how we become profitable and successful.”
For many retailers, trust will depend on a distributor’s understanding of their approach to pet-care retailing. Estela Lam, chief merchant for California-based Muttropolis, a three-store operation with locations in Solana Beach, La Jolla and Newport Beach, says that it is essential for her stores’ distributor partners—which include Animal Supply Company, Coast Pet Distributors and Newco—to understand the company’s philosophy.
“We have to work with distributors to put together our product assortment, and in order to do that, my expectation is that our distributors understand our philosophy in our stores,” Lam says. Muttropolis focuses on ultra-premium, nutritional food and treats for cats and dogs, as well as fashionable, high-end accessories like collars, leads, harnesses, apparel and toys, among other categories.
“With them having that knowledge, I expect the distributors to let me know about what is happening in the market, new brands that we might not be aware of yet, what are the new hot items, what are our competitors doing, and if there is something that we should be doing that we’re not doing,” she says. “Really, the sweet spot is just understanding us and the market.”
Jeff Kimmelman, owner of Pet Source, a retail operation with five stores in Eastern Massachusetts, also expects that a distributor’s product selection align with the company’s philosophy. Kimmelman says Pet Source works with five distributors, but 60 percent of its business is conducted with Pet Food Experts—mainly because of its product selection.
“Pet Source really focuses on choosing high-quality products,” says Kimmelman. “We do carry some generic and common products, but we really cater to the people who are really focused on the health and well-being of their pets, so we like to have good products.
“Pet Food Experts has products that align with that, just as our other distributors do, but they have a wide selection. They do an excellent job of helping us identify the products, pointing us to good deals, and pointing us away from maybe not so good deals. With Pet Food Experts, it’s more of a partnership than just an order taker.”
Even if the product assortment aligns with a store’s philosophy, ultimately, the products still have to move off the store’s shelves. Distributors can be instrumental in helping a retailer determine if and when an item should be removed or a product assortment needs to be revamped.
“We’re responsible if the product doesn’t move,” Merar says. “If it’s not working, we’ll remove it from the store’s shelves and put something in the store that will move. We’ve had great success in growing the hard goods business in the stores that have allowed us to do that.”
Tropic Life Pets, a 34,000-square-foot, single-unit retailer in Milwaukee offering supplies and food for companion animals, has worked with General Pet Supply since the store opened in 1973. A couple of years ago, says storeowner Mike Hoffer, the store’s distributor representative noticed a slump in sales in the small animal department. “The rep from General came in and changed displays and put together an attractive, nice display in that area,” Hoffer says. “She added products and revamped the bedding selection, and she’s kept up with it. Since then, our sales doubled in the small-animal section.”
Product selection is only one component of what a distributor can bring to the relationships they have with retailers. Pricing and special promotions are perhaps the most important benefits that many retailers look for from a distributor. Pricing deals not only help retailers maximize their margins, they often allow a retailer to pass the savings on to their customers.
Kimmelman places a lot of importance on price when buying products through Pet Source’s distributor partners. “For us, it’s more about getting a good interface to manufacturers,” he says. “Where we might be handling a large volume of a particular food, for example, we want to make sure we are getting the best deal that we can, that we are aware of special offers, pallet deals, etc. So, we can pick up a good deal here and there, because, of course, that factors into our pricing, and we have to be competitive on our end.”
Having a strong relationship with a particular distributor can come with a host of perks in this respect. For example, Pet Source’s strong partnership with Pet Food Experts allows the retailer to reap the benefits of preferred pricing.
On the other hand, Kimmelman says working with a few different distributors gives Pet Source opportunity to shop for the best deal on certain items, since no distributor can be expected to have the lowest prices on every item in its assortment. “One of the reasons we work with other distributors is because Pet Food Experts doesn’t always offer the best price, and it’s good for us to stay on top of it,” he says.
Merar cautions, however, that working with too many distributors in search of the most attractive deal may not always work in a retailer’s favor. In fact, it could potentially damage an existing relationship. “Perhaps a retailer can buy the same product that we offer from another distributor for 50 or 60 cents less, or even a dollar less one month,” Merar says. “Sometimes, they jump on that without looking at the bigger picture, as far as what the distributor can bring to the retailer in terms of sales help, inventory help, programming, promotions, etc.
“The retailers are too focused on the bottom line with prices—not necessarily what we are going to do to move that product off the shelf. Retailers need to see that they’re chasing a few pennies, when they could really be building a relationship and getting a much greater benefit by working with the distributor.”
Still, most distributors are acutely attentive to retailers’ price sensitivity, and they often work hard to communicate monthly promotions and other deals they offer. Easton, Pa.-based Phillips Pet Food & Supplies, which distributes nationwide, for example, has a sales team dedicated to helping retailers save money, says director of marketing Jessica Farina-Morris. “They are constantly looking for ways to help retailers save money by using promotions that vendors may have out there,” she says. “We’ve got so many great programs, and we’re constantly trying to communicate that to our customers, because sometimes they can forget these programs exist.”
Phillips keeps its retail partners abreast of deals through its monthly promo book and weekly e-blasts.
General Pet Supply also utilizes promo books but tries to extend savings beyond its monthly deals. “We think we run the gamut of discounting product that is not in the monthly specials to keep our retailers competitive,” Merar says. “We look and see what’s going on in the market, and if we feel like a crate needs to be on special, we’ll do that.”
General Pet Supply’s promotional savings have been crucial for Hoffer, who uses the distributor’s promo book to schedule monthly specials for his store. He passes the savings on to his customers. Hoffer points to a deal he got on Aqueon power filters as an example of how General helped boost his bottom line. “We got the filters at 50 percent off; then, we got 45 percent off on some of their aquariums,” he says. “I was able to offer my customers a good discount on the aquariums, and then give them a power filter for free. They weren’t only getting a deal on the aquarium, they got something for free—that’s a good value.”
Muttropolis also works with distributors to offer special in-store promotions. The stores have a recurring treat-of-the-month promotion, and Lam says she relies heavily on distributors to establish a direct relationship with brands so she can negotiate the best deals. “Having that relationship [with the brands] is the most important thing,” Lam says.
When it comes to finding valuable promotional deals, there may be no better place to look than the many distributor open-house events that are hosted across the country. The manufacturers that participate in these mini-tradeshows almost always offer some type of special pricing to retailers in attendance, making the events an essential part of many stores’ buying schedule.
However, distributor open houses offer much more than a chance to find steep discounts on merchandise. Attending these events gives retailers an opportunity to see new products up close and get product knowledge directly from manufacturers. In addition, attending open-house events provides valuable one-on-one time with a retailer’s distributor partners, during which the supplier can showcase various programs that can help pet stores make more money.
“A lot of people see the open houses as a big buying opportunity and [don’t] really take into account the other programs we have to offer,” Merar says. “It’s really important that retailers attend the open houses and trade shows so they can see on a more one-on-one basis what the distributors really have to offer.”
Many distributors are forging partnerships with outside service-oriented companies that are focused on helping small businesses succeed, and distributor open houses often provide a perfect opportunity for a retailer to connect with these businesses. For example, online marketing firm Constant Contact was one of the exhibitors at the annual open house held by Fauna Foods, an Elmhurst, N.Y.-based distributor.
President Ira Slovin says Constant Contact was asked to attend his company’s open-house event because he understands the value that online marketing services can provide to retailers in today’s technology-focused selling environment.
“We told the Constant Contact representative that many of the small-business owners who were attending the show did not use Constant Contact,” he says. “There are many sites that do e-blasts, but Constant Contact is the one that people recognize. By being at our show, Constant Contact could sign the retailers up for their service to help them inexpensively reach their customers.”
Phillips has also aligned itself with companies that help retailers improve their stores’ bottom line. In January, the company launched the Phillips IT Kit, a free marketing program that is exclusive to Phillips customers.
“It’s got all these different business solutions in it that will really help retailers compete like a big box store,” explains Farina-Morris.
The IT Kit includes five programs geared toward helping retailers with marketing and consumer outreach through direct mailings, email and mobile technology; website design; store design; point-of-sale systems; and insurance.
“We’ve negotiated pricing with these partners. We’ve qualified them to be sure they truly are the best partners, and we put it into one easy kit,” Farina-Morris adds. “It is a-la-carte service. Customers can go through it, and if they are looking to get a website or even redesign a website, or get into social media, we’ve got the partners there that are pre-qualified to help them.”
Third-party partnerships like these have proven beneficial to retailers like Kimmelman, who noticed Pet Store Marketer, an online marketing firm that specializes in customer loyalty and frequent-buyer programs, at a Pet Food Experts show.
“We saw Pet Store Marketer year in and year out at the Pet Food Experts shows, and we’ve gone with them now for our loyalty program,” says Kimmelman. “Before we partnered with them, we had customers enroll in our punch-card program, and now, we’re on an electronic program [through Pet Store Marketer] with a key card that helps track sales. They also help us with outreach mailings. It’s has been a positive experience.”
While retailers can leave distributor open houses with new business relationships, inventory purchased at great prices and industry knowledge, the basic, day-to-day operations and experiences with their distributors is really what makes these partnerships long lasting—and distributors understand this.
Something as simple as a delivery making it to the store on time or in a time of need will keep retailers happy. “We have to give the best service possible,” says Slovin. “For example, when Hurricane Sandy hit, we were out a day and a half later making deliveries as best we could, when other people were stuck and couldn’t make deliveries because they were way out of the area—that’s a necessity for a distributor like us who are local to the marketplace.”
That attitude from a distributor can go a long way with retailers. “What keeps us happy are the basic expectations,” Lam says. “We just want the items to be delivered as ordered, complete and on time every week.
“When the distributors are shipping what we order on time, and it gets to store and there are no issues, no broken bags, etc., that is beautiful for us. We’re very customer centric, and in order to meet their needs, we just have to be aware of what they want and make sure our distributors are on the same page. It’s pretty basic.”