Hope for Small Business?

Hope for Small Business?

Amazon.com, the largest consumer e-commerce site, launched AmazonSupply.com which offers more than 500,000 products that include janitorial and sanitization products.  Retail chains like Staples, Costco, Lowes, Menards and Sam’s Club are following suit and more recently Grainger announced that it will spend $40 million to build out its online e-commerce store.  Not only do these big box retail chains have an enormous online presence but their colossal facilities across the nation, competitive pricing, and aggressive buying power can squash us little fish.

In an economic time where the first budget line that gets cut is Janitorial Services, everyone’s bottom line starts to shrink.  So…what’s a small business to do?

Well put your boot straps on and don’t give up! Here are some tips that will enable you to swim with the sharks:

1.      Excellent Service

You have heard the term time and time again, but it’s the one thing that will prevent you from getting bitten.  Anyone can bring a chemical or a mop to the market but the difference between you and Amazon is the level of service you provide to your customers.  Customers appreciate the information and the extra training you give them when they are purchasing, they value the fact that you can recommend different products according to their needs/problems and budgets.  You are not just a shopping cart where your clients just check out.

2.      Competitive pricing

In order to stay in the game you will have to play the price game, it’s inevitable.  The upside is that there are many things you can do you that will allow you to compete price wise.

-          Contact your vendors, ask for your terms to be extended from 30 to 45 or 60 days.  If you have a good relationship with vendors and/or manufacturer reps chances are they will extend longer terms.  This will allow you to stretch your cash flow, and help you manage paying your bills on time.

-          Contact all your customers before putting in order to determine if you can place a larger order with your vendors.  Larger orders = decreased pricing and the positive of this is, most of what you’ve ordered is already pre-sold.

3.      Utilize 3PL

I recently learned about 3PL, which is a term used for “public warehouses”.  If you are a smaller distributor looking to grow without wanting to move or pay more for warehouse space then this is a perfect solution.  You can keep stock levels high without the risk of adding to your payroll or rent. 

4.      Education

Make sure you are really breaking it down for your customers.  Do they understand that when they are buying from big box retail they may not be getting the same unit of measure, it may seem cheaper in the short-run but it’s actually costing them a lot more in the long-run.

 

5.      Collaboration

If you can’t beat them join them.  Reach out and see if there is any way you can help or if they want to carry any of your products.  Every big organization has a diversity program, if you’re certified get on their supplier lists.  There is always a way to get a piece of the pie.

It may be more work, longer hours and a lot more dedication, but there is hope, you can do it.  Bring on the longer work days, isn’t that what small business is all about?  And remember a shark’s intuition is to attack when they smell blood, don’t let them see you bleed but rather swim right along with them.