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Talk openly with your suppliers

Don’t suffer in silence while larger retailers get better deals, says Catherine Erdly

Small retailers are bearing the brunt of the pain caused by ever-changing supply chain issues, said regular NNB columnist Catherine Erdly.

Writing for Forbes, the founder of The Resilient Retail Club, Catherine says 2021 was difficult enough with rising shipping and oil costs and major supply issues, largely driven by shipping disruption, container shortages, Covid staffing challenges and Brexit red tape.

But now the devastating war in Ukraine has exacerbated global retail issues as 86% of small and midsize businesses (SMB) supply chains have already been or expect to be impacted by the conflict.

“SMB retailers feel that larger companies have an advantage over them in their ability to procure inventory,” she wrote. “Although no one is immune to the ongoing disruptions, larger companies tend to place larger orders and essentially are less risky for suppliers than small businesses.”

An SMB retailer survey found that 42% named their inability to meet minimum order sizes set by vendors as their main challenge, while almost as many said they were unable to pay premium prices – 46% of retail SMBs have had at least one vendor drop them for reasons specifically related to being a small business. Another 23% are expecting to be dropped in the near future.

Small retailers should discuss these challenges openly with their suppliers and work together to address them.

“Work with other nearby small businesses if they use the same supplier or get the same products,” she said. “The supply chain is effectively a network, so reach out in as many different ways as possible to find creative solutions.

“If you don’t have a strong relationship with your suppliers, you risk being deprioritised and some suppliers may even drop you as a customer altogether. Having vendor diversity, or at least having backup vendors, helps mitigate supply chain disruptions.

“There’s high pressure for the retail sector to absorb rising costs and small companies have to work even harder to keep up because they are not only affected by supply chain disruptions but higher prices squeeze them out of competing with larger companies.” /

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