Interviews with suppliers: prices on request, RRC, joint purchases

Many owners of online stores in the process of searching for suppliers of goods must have come across certain requirements for the sellers of their goods. We decided to interview some suppliers to tell us why such requirements exist. Our suppliers also spoke about joint purchases and the need for recommended retail prices.





A classic example: you have found an interesting product offered by a supplier in a search engine, go to their website to see prices, and ... see an inscription in the style “To see our prices, send us your TIN, PSRN, charter, passport, fresh tax statement, a notarized screenshot of your online store , and only then we will show you our prices. Or we won’t show it. ”

"Why such secrets? I am a potential client, I want to get acquainted with the assortment and its prices. Why such difficulties? "- roughly such thoughts often arise from owners of online stores when meeting with suppliers.

If you are just planning to open an online store, then the fact that the supplier can closely monitor your prices, assortment, and even the design of your online store may be an additional surprise.

Of course, all suppliers have different requirements and loyalty, but the approximate features of all are the same. The supplier’s managers are not always able to give you a detailed answer about the nature of the requirements from the authorities.

We decided to talk with the owners of three different companies that specialize in wholesale in different market segments, and ask them some questions in order to clarify for our readers some features of working with them.

So, meet our guests:

1. Nikolay Nikolaev , General Director of Walteritekstil LLC.
Supplier of textile products: bedding, pillows, blankets, rugs.

2. Nikolai Sotnikov , CEO of Aushaus .
A supplier of household goods and home furnishings.

3. Kirill Chernyshev , Head of Sales , AUDACHE Trading House
Supplier of women's clothing and underwear.

And the first question:

Do you hide wholesale prices for your products from outside viewers?

Nikolai Sotnikov: Yes, we will send them upon request. We are primarily a retail company, and our storefront is an online store where retail prices are displayed. B2B customers are attracted by us through separate channels - by sending us a request for a price through the appropriate form, or by writing a letter. And we, in turn, send a price list in response. Our wholesale prices can be found on a couple of specialized services, including Comerando - they are available to potential customers. In the retail store, it is not practical to show them - the buyer should not distract from the purchase and be confused.

Kirill Chernyshev:We hide wholesale prices for several reasons.
This is one of the few opportunities to get contact information for a potential customer. As a rule, the price itself is quite scarce information. It is necessary to talk with a person and provide him with complete information. Of course, he can independently get an idea of ​​the order of prices, but this is quite superficial information.
Prices themselves are not a secret, but we would like to know with whom we communicate.

Nikolai Nikolaev: Basic wholesale prices are available for all categories of potential customers: both wholesale and retail. The base price is available on our website, also the basic wholesale prices are displayed in the product card on the website.

Does your company have a minimum purchase amount?

Nikolai Sotnikov: Yes, and it is quite symbolic. From 5,000 rubles for legal entities and from 15,000 rubles for individuals (joint purchases).

Nikolai Nikolaev: We provide an opportunity to buy goods at a wholesale price to anyone - for this it is enough to place an order for the minimum amount for today this amount is 25,000 rubles.
Regarding online stores: we do not have a minimum order amount for them - the wholesale price is from 1 piece. Just like that, everyone works with online stores. This is the specificity of this category of customers.

Kirill Chernyshev:We work fully on the conditions of factories with which we cooperate. As a rule, the factory regulates exactly the first purchase (at least from 20-30 thousand rubles). In the future, the client can make purchases for smaller amounts to sort the goods, but this rarely happens. In general, we do not consider the purchase of 5-7-10 thousand rubles as a wholesale one, if this is not a sorting of old positions.

About RRC



RRP is short for Recommended Retail Price. By a similar column in the price list, the supplier informs you at what price it is better to sell products. Often, the RRC contradicts the phrase itself is not recommendatory, but mandatory, and intersects with the MRC (minimum retail price). When signing a contract with customers, many suppliers are obligated to sign the so-called “anti-dumping agreement”, in which various sanctions may be prescribed for the sale of goods at a price lower than the RRP. Now we ask our suppliers:

Do you have a distribution center for wholesale customers?

Nikolay Sotnikov:No, we decided to remove it, since our goods cannot be classified as RRPs, and each client has its own economy. For comparison, we show our retail prices, and customers decide on the size of the mark-up.

Nikolai Nikolaev: We have a RRC - the recommended retail price with a minimum mark-up level of 70%. For compliance with this parameter, we closely monitor and work with unfair competition and dumping. We refuse shipment if the client repeatedly does not comply with the RRC. This applies to all categories of customers.

Kirill Chernyshev: We have a RRC = 100%.
These are figures formed in the market in conditions of absolute market relations.
Today, the RRC is formed on the basis of such costs as: rental payments, taxes, employee salaries, advertising, profit.

Of course, all of these costs are different, some have more, others have less, but the average RRC in the country is exactly 100%. It can also vary from product category, seasonality, and so on.

There are several reasons why such an extra charge allows the company to exist normally and not survive. The product is not sold under the order, but the assortment of the store is formed, which must be constantly maintained. Something is on sale in 2 days, and something in a month. The longer the goods lie on the shelf, the more expensive it costs the seller. Therefore, if the product is long enough, it is easier to sell it at a discount and bring a new product.

Among buyers there is an opinion that at a discount they sell goods that no one needs or of poor quality, but this is not always the case. Returning to the RRC, at a margin of 100%, the maximum discount that the seller can make on the sale of goods is 50% in order to return the money invested, but this does not include all expenses associated with the sale. It turns out that even a 20-30% discount already leaves the entrepreneur without earnings. At the same time, there is a risk that the product will not find its buyer at all. These risks are also included in the price.

If the entrepreneur does not take these points into account, it is unlikely that the business will be profitable, and sooner or later it will have to close.

Different regions have different pricing situations. We cannot force to set the price exactly 100%. But if the price is significantly underestimated, we will not work with such clients.

Some suppliers require a whole package of documents from wholesale buyers. Do you have any requirements for your customers?

Nikolai Sotnikov: As such, there are no requirements. We find out the necessary information about the client in a conversation with him, and also look at additional data about his company on the Internet, social networks and other sources. Most of the requirements are most likely to be made by those suppliers who work on the terms of implementation - we, at the moment, mainly work on a prepaid basis.

Nikolay Nikolaev:The list of documents, as I assume, is needed to work with deferred payment. Since the situation is not simple, there is a risk of non-fulfillment of contractual obligations.
To start cooperation, of course, we don’t need such a list. Managers in the course of work may request some documents or data to fill out the contract. But in order to start working, we only need an order and contacts, the rest is already discussed individually.

Kirill Chernyshev: The set of documents is regulated by the legislation of the Russian Federation. In our case, when working with individual entrepreneurs, we ask you to provide copies of documents:
1) TIN
2) PSRN
3) passport (first page and with a registration)
There are still cases when entrepreneurs are surprised why we need their registration, and so: for an individual entrepreneur, the legal address is the registration address, which is why we need this document.

For legal entities
1) TIN
2) PSRN
3) first and last page of the charter

This is a standard set of documents, and additional documents may be requested.

And from a practical point of view: what is their need (deferred payment or something else)?

Kirill Chernyshev: We work on full prepayment. And the composition of the documents does not affect this.

Good, but from a legislative point of view? Do you provide somewhere “above” these documents? And what kind of law is this? Please tell us in more detail, this will be especially useful information for beginners.

Kirill Chernyshev: We transfer these documents to the tax office upon request. Also, based on these documents, a contract is drawn up.

Do you work with clients about whom you did not find any information, and he only plans to open an online store?

Nikolay Sotnikov:We ask for their details and conclude an agreement, and then (after launching the site) - we look and monitor their prices. We are interested in developing the business of our clients and also help them with technical consultations, photos, give recommendations on logistics, etc. - This applies just to novice entrepreneurs who consider us as the first suppliers.

Kirill Chernyshev: At the moment, we do not work with online stores at all. If someone offers a normal scheme of work and the turnover will exceed the same 30,000 per month, then no question. We are ready to consider the minimum purchase amount of 10,000 rubles, delivery to the shopping center for 500 rubles, pickup is possible.

About joint purchases



Joint purchase (joint purchase, collective purchase) is the principle of organizing a purchase in which several persons are grouped to purchase goods directly from a supplier or manufacturer at wholesale prices (quote from a wiki). Let's ask our guests:

How do you feel about the organizers of joint purchases? Do you work with them?

Nikolai Sotnikov: Yes, we work, and we treat them well. This is the same wholesale customer for us.

Nikolai Nikolaev: I am wonderful, and we work perfectly with such clients. Joint purchases are a rather important category of customers for us, we are actively working with them. So far there have been no complaints from our regular customers. Moreover, almost all companies in the textile market also work with such clients.

Kirill Chernyshev: Individuals who purchase goods for personal use - these are retail buyers, is not our field of activity at all. These are just the clients of our customers.

The joint venture is a completely different story. We can sometimes offer stock assortment or some separate positions, but we cannot work with the basic assortment.
It is important to understand how the joint venture works. This is a group of people organized to buy a particular assortment at wholesale prices. The person who organizes the joint venture takes from 10% to 20% for all the fuss.

Judging only from the point of view of the retail buyer, of course, getting a product with a margin of 20% rather than 100% is much more profitable. But what will you do if the product does not fit the size, the color is not what you wanted, or just did not like the model? There are a lot of people who, because of the price, are willing to take risks and buy from the photo.

And some, especially smart ones, find this product in retail stores, try on, check the size (use the entire service of the retail store), and order it from the joint venture.

So, a joint venture is a market that does not necessarily overlap with customers who buy goods in retail stores. Many simply do not use the Internet or are not ready to buy goods at random.

But with all this, the joint venture can really harm the sales of an individual brand due to very strong dumping. We build our work with clients for years and for a very long time, and work with the joint venture is here and now. Today, we simply have nothing to offer the joint purchase segment without compromising our customers. As soon as we have something to offer, we will definitely turn our attention to this market.

You are not afraid that they can damage somehow your regular wholesale customers, selling goods cheaper? Markup for them is not more than 10-20% (procurement service)

Nikolay Sotnikov:Therefore, in any case, the joint venture is at least 10-20% more expensive than ours. After all, they will not sell the goods without their extra charge. In addition, it makes no sense for wholesalers to contact the joint venture, and they (wholesalers) are unlikely to know about the organizers with whom we work.

A joint venture is an absolutely niche story that does not go beyond a certain community limited in size - in each city there are joint venture organizers and people who sit on thematic forums and look for such organizers. But these scales are not commensurate with the volume of the market as a whole.

Nikolai Nikolaev: No, I'm not afraid, because I think that these are different market segments. In addition, large customers have discounts from the base wholesale price. In addition, almost all of our competitors work with this category of customers.