Retail Observer

RETAILOBSERVER.COM FEBRUARY 2019 62 W hile preparing for another year of shows and events presented by Nationwide RentDirect, the RTO Industry, state organizations and RTO dealers, I couldn't help but think about our customers and vendors. We have some of the most loyal customers and vendors of any industry. Many times, I've heard an RTO dealer say, "I will do anything or buy anything for my best customers." And they mean it! They understand that the loyalty they show to their customers comes back to them tenfold, either through increased sales or recommendations from that customer to others. Every RTO dealer also has vendors who are key partners and critical to their business. They are our best vendors, and our job is to become one of their best customers. We should keep in mind that our industry is skewed toward the lower end of any vendor's product offering. As a result, in most of our RTO categories (Furniture, Bedding, CE, Appliances) a huge percent of our sales are products purchased in the low-end, low-margin part of our vendors' mix. Giving them our loyalty and earning theirs calls for supplementing our high-volume, low-margin SKUs with value-added "step up" products. This blend of margins is healthy for RTO dealers, RTO vendors, and the long-term relationships they hope to build. After all, no business can remain viable if all of their volume comes from low-margin to no-margin products. Is it volume with a vendor that makes you a "best customer"? Yes. To an extent, volume certainly endears you to a vendor. Is it profit to a vendor that produces the "best customer"? Yes. Profit certainly will get the attention of any vendor. Most vendors have composed their RTO strategies around getting a fair share of your step-up business. They believe they've earned it by delivering low-end products at a competitive price. They may know that 80% of your purchases will be lower-end, and their hope is that the other 20% will be step-up. Are you showing them that loyalty? No one is suggesting that you should cultivate one vendor over another. It's just that, by category, when a loyal vendor is delivering you the product at the price you need on the low end, why not strongly consider becoming one of that vendor's "best customers" by looking closely at their step-up models? We've all seen vendors come and go. If they go because of inferior quality, pricing or service . . . let them go. But let's not let any quality vendor go because they can't get the fair and reasonable mix they to need to stay in business for the long haul. YOUR BEST CUSTOMERS, YOUR BEST VENDORS- IT'S A LOYALTY THING RO Bruce Manning Rent-to-Own Trends Bruce Manning — Director, Nationwide RTO

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