Why should I buy from you? Think about it for a second. Yeah, for starters I need the product you're selling, but what if there is more than one of you selling the same product?
I saw something funny in my community. There are a number of grocery stores around, although they are a little distant from each other. One morning I was strolling around and saw some people going to get their stuff. I noticed something that got me curious. Some people didn't consider distance as they would bypass some stores which had the same product they were looking for, and go the extra mile to get it in another store.
That has to get you wondering if you're into that kind of business.
So what did I do? No, I didn't ask them why, that would probably end me with an F* u or some bad treatment. Or maybe they would consider me a YouTuber looking for content. The obvious and best thing I did was go and shop at both places. I didn't go there presenting myself as taking a survey, but as a regular customer to understand why.
Very quickly I noticed the first difference:
Pricing
It's no secret that the masses would consider price over quality, and especially when the quality is the same, why the heck would they want to pay more for the same thing. Now I see why the first shop has overpriced their goods. You see, I'm also into that business and I can say from experience that if you don't get your goods from a cheaper source, you might end up overpricing just to make a return. The trick here is to buy from manufacturers instead of wholesalers.
But the problem for some shops is that their capital may be too small to buy from the manufacturers as they require you to purchase a bigger number of goods to be delivered. The other problem is lack of knowledge. Some grocery store owners stick to one wholesaler and don't explore others. It looks like an obvious thing to do but trust me, it's not that plain. Some people get comfortable with one supplier the moment they build a relationship with that person.
I will tell you a little bit of my experience when I was running my shop 3 years ago before I put a hold to it, and now I'm back in business in 2025. I had one supplier, a very nice and persuasive lady. Like I said in my previous blog, she is currently not operating. Boy, she knew how to talk me into buying stuff I didn't need at the shop. It was okay because she would usually give them to me on credit, so as sales go on I pay her. She could trust me because she noticed one of my weaknesses, or should I say strengths: Oh my, do I feel uncomfortable owing someone money. I really don't know how some people do it, but I feel imprisoned when there is debt. I would pay her long before I could finish selling that particular goods I owed.
In fact, at times, I would pay her in advance for stocks I would be coming to take later on. I wasn't doing that on purpose, but I believe that's what got her to trust me with her stocks.
The Problem:
She was my first supplier at that time and therefore I had no idea what others were selling for. I also didn't bother to search. Man, Lady was selling the goods to me at the highest price possible. I didn't know, but I was still selling at the general price everyone in the community was. That meant I was making less because I also didn't want to overprice my stuff and give the impression that I'm an expensive store. This went on for almost a year, until one time I needed some goods so desperately she had been out of stock for a while.
That gave me no choice but to try some place on.
The new place no doubt is further from my store, but the prices over there shocked me. My first impression was: Is there a mistake somewhere? Does the owner of the place know that the workers are selling his product for this cheap a price? Is the goddess of good luck favoring me? Or could it be that my previous wholesaler was overpricing stuff?
Well, we have an obvious but not so obvious answer:
It's either she was overpricing her stuff, or she was getting it at a higher price from her distributor too.
For those who are into retail, you know the 3 levels of sellers you can get your stuff from, and as you climb the ladder the same goods get cheaper, but the catch is you need to buy more as you climb the ladder to the manufacturer.
- Wholesalers
- Distributors
- Manufacturers
For the regular customer you can add me (the retailer) at number 1.
4 weeks ago, I called one manufacturer selling bottled water. The guy over the phone said I need to make a minimum purchase of 100 packs for it to be delivered to me. Now I could pay for that, but I need to get a variety of goods so I wasn't ready to spend all on one product or brand. I believe as time goes on and as I build my capital, I would be getting all my goods from the manufacturers instead of distributors or wholesalers. For now, I get most of my goods from distributors and a few from manufacturers. I would need a big warehouse to be dealing with the manufacturers. I believe I will get there one day, but for now I would do what works.
Upon knowing this, I currently buy my goods from 4 different places. Some people sell some goods cheaper than others. So I get my dairy products from one, my water and drink products from another...
Lesson: Always compare prices
The main reason why the shop many people troop to in my community has her prices so cheap is because she gathers her capital and goes to the manufacturers for a better offer. No matter how you try, if you got it high you can't sell at her price. I'm not saying the other shop or mine don't get customers, we do, but she seems to be the most thriving shop due to that.
My Advantage:
Second to her, I believe I have the biggest advantage due to location.
Location location location!!!
Yeah, it's a real thing that can determine your success. Mine is located next to a community church, so guess what? Yeah, you guessed it, when the members have their evening and Sunday services, I'm their go-to for their products. Those days really boost my sales.
I'm really hoping that church becomes bigger and bigger for my selfish reasons haha!
Anyways, there is a second reason other than pricing that gets people bypassing other stores to buy at the other shop which I would talk about in another blog post. This has to do with the personality of the owner. For now, I would leave you with this:
Always do your market research, as ignorance is more costly (literally) than knowledge and the time spent learning. Hope this blog helps someone succeed in the retail industry. Thanks for reading.