Rack Jobbing As a Wholesaling Alternative
Whenever you go into a supermarket or drug store and begin looking over that tub full of DVD’s on sale, you can see that these are generally movie titles that had already done the circuit of theaters, followed by becoming the video rental titles from stores and online. What you may not know is that you’re more than likely looking over merchandise that’s been put there by a rack jobber.
What’s a rack jobber? It’s a wholesaler with a particular niche product who stocks retail outlets with those products but maintains ownership until a sale is made. In essence, those goods are there on consignment. The jobber checks inventory and restocks the shelves on a regular basis. At that time, the retailer pays the wholesaler the wholesale price on the merchandise that has gone out the door, keeping the agreed-upon amount of profit.
What the retailer gets out of this, most importantly, is that he does not pay the wholesale price up front but only after the merchandise is sold. What the wholesaler gets is the ability to maintain what is, in effect, a small retail outlet of his own within a very favorable sales environment , and he does it without having to pay for the real estate taken up by his “store.” He does not have to carry the cost of clerks at his “stores” to process sales; the host retailer provides that.
There is no reason for a store owner or manager to turn you down when you offer to place merchandise free of charge. There is no risk involved for him, therefore it is not hard to get you initial accounts setup. I will caution you in one area and that is shrinkage or theft. Make sure to advise the store owner that he will be invoiced and responsible for those items that are stolen. Theft is an inevitable occurrence when retailing and it will affect your rack jobbing business.
Multiply your racks over a number of retail outlets, and sales figures will soon mount up – assuming you have a good product suited to rack jobbing and you contract with good host retailers. Once you have a good number of stores setup you will want to service them on a weekly or bi-weekly basis making sure empty displays are filled and slower moving items are replaced with other merchandise.
Chances are, you’re not going to come up with a new idea for rack jobbing that drug stores or supermarkets haven’t seen; they already handle DVD’s, books, clothing, novelties, and more. But genius ideas for rack jobbing can come from putting two separate ideas together, like dogs and books, for example: Stock books about pets and pet-centered magazines in veterinary offices.
Here are a few more ideas to get you started:
- Jewelry & watches at hair and nail salons
- Sell games at liquor stores…Who does not like to play games while drinking?
- Impulse novelties at convenience stores and gas stations
- Handbags or purses at apparel stores