Tips for the trade

0101

Bricks and mortar: Retail premises are key to landing a marquee account

A network of proactive retailers is key to the success of shooting sports distributors. Three major distributors tell us what factors they consider when appointing trade accounts, and how applicants can maximise their chances of attaining one

The UK’s major shooting sports distributors rely heavily on their trade accounts, which not only showcase the distributor’s range of products but also form the lifeblood of their income streams. Therefore, establishing the right type of trade account is vital to a distributor’s business.

There are many factors to consider before signing a new account. Having a physical retail premises is the most important issue for Derek Edgar, managing director of Edgar Brothers, one of the country’s biggest distributors: “The first thing we do is to establish whether the applicant has retail premises where our products can be displayed properly and where customers can physically go to see them and buy them.”

Edgar Brothers’ senior sales and marketing manager, Lisa Riley, adds: “It’s hard declining people who believe they have a viable business proposition. But many of our products require specific technical knowledge, an appropriate and relevant business environment, professional sales support and excellent customer service, with the ability to invest financially. We often have to decline accounts because we already have significant product exposure within an area and there is insufficient demand, not only to warrant the support but also to justify additional accounts.”

Andy Williams, sales manager at major Hampshire-based distributor GMK, backs this up. “For GMK retail premises are the most important factor, he says. “We want our trade accounts to have a bricks-and-mortar establishment where they can display our brands and be able to sell them in the right manner.”
Premises are also vital for Viking Arms, along with proof that the trade applicant is a legitimate registered firearms dealer. “We need a copy of the applicant’s RFD,” explains Edward Horton, director at Viking. “Once we have that, we send them a trade application form. We also speak to our other distributors and wholesalers to find out if they know of the company and whether they have retail premises.”

Stock up: Make sure you have the capital necessary to pay for guns up front

Stock up: Make sure you have the capital necessary to pay for guns up front

Second on the list is checking that any potential new account is not located too near an existing one. “We look carefully at the geographic area an applicant is in,” says Edward Horton. “If the applicant is near an existing account, we ascertain the level of business the original account is doing and think carefully about introducing a new one, as it might dissolve everything.”

For GMK, one way around the problem of more than one dealer in an area is to sign the new retailer onto a ‘limited account’, which as its name suggests limits the stock that account can buy. Andy Williams explains: “If someone wants to open a shop in the vicinity of one that is focused on selling rifles, we can sign the new one on to a limited account meaning they can only buy shotguns, for example. But our priority is ensuring that our loyal retailers don’t have their business threatened by a new retailer next door.”

Not surprisingly, carrying out credit checks is next on the list. For Edgar Brothers, this is part of its rigorous process of due diligence. “Once an applicant contacts us they are referred to the company website to make an application,” explains Derek Edgar. “They then give us information about how they plan to do business and whether they specialise in a particular area. Credit checks are then carried out, and the applicant’s details are sent to our sales team, one of whom will make a visit to the premises to make sure they have shelf space, the right attitude to promote our products, and can stock a wide range of them.”

While carrying out credit checks is vital, Derek says he does not insist trade accounts are registered with Companies House. “They could be start-up businesses, which often aren’t registered at first. However, we do ask for certain information as we don’t want to get stung if something unfortunate happens. In addition, we ask for trade references if they are an established business, and we always take those up.

“All new retailers must pay up front for products via what we call a ‘stocking order’ to start off with. After that they pay for products before dispatch, and only when they have established themselves can they go onto a credit account on 30-day terms.”

Derek Edgar advises new trade accounts to read up on terms and conditions

Derek Edgar advises new trade accounts to read up on terms and conditions

Interestingly, far more trade accounts are applied for with premium distributors than are granted, as Andy Williams notes: “For GMK the important issue is to establish quality new accounts rather than setting them up in volume. We turn down more new trade accounts than we open at the moment. Yes, we are quite choosy, but we are fortunate enough to afford to be.”

Once a trade account has been signed up, it will benefit from a high level of support from distributors who often provide training, product education, point of sale materials, marketing and advertising support and dealer days to allow retailer staff to try out products for themselves.

Along with support of this nature, a major factor in working successfully with trade accounts is to build a strong relationship with them. “That is absolutely vital, and we work very hard to build a proactive relationship with our retailers based on open communication,” says Derek Edgar. “In addition, we provide a lot of support from head office, with all accounts tracked to ascertain their activity. We obviously like our trade accounts to increase their year-on-year activity with us, and that is a minimum requirement to keep the account open. If that is not happening and we can’t justify the sales rep’s time on the account, we move it to our in-house telesales desk. That works really well as the more regular, but lower cost, contact from telesales often helps build the business up. Things then improve and the account will go back to the sales rep. But we do cull accounts that cost too much to be kept open, as they take up time and money for no benefit, even preventing new business development in the area.”

GMK will also occasionally shut down accounts if they are not proactive or performing well. “We monitor all of our accounts and can take action, as the whole point is that an account should be active and successful,” says Andy Williams. Viking Arms takes a slightly different approach – Edward Horton explains that the company does not close accounts down if business is not increasing year-on-year: “Some of our trade accounts may buy one item that is worth a considerable amount, of money and they won’t do that every year, so we look at every account individually.”

As for top tips on how applicants can maximise their chances of winning a trade account, Andy Williams’s advice is to ensure they have enough money. “Buying guns involves considerable capital outlay, and we need to ensure we are going to get paid, so any trade account applicant needs to be financially solvent.”

For Derek Edgar the key recommendation for anyone looking to open an account with Edgar Brothers is not to go too far down the line without reading the terms and conditions of business, which are available at www.edgarbrothers.com. “For those that do win an account, it is then critical we build up a proactive, supportive, open relationship for the mutual and profitable benefit, and of course for the benefit of the customers buying our vast product range.”

Tagged with: , , , , ,
Posted in Interviews
Follow Us!