Canadian Retailer - January/February 2010 - (Page 42)

M E M B E R P RO F I L E Strength in Numbers: A Primer on Retail Buying Groups Buying groups provide independent retailers with purchasing power within the market, with each benefiting as members of Retail Council of Canada through vital services and advocacy. BY ROBERT PRICE olin Hopper enjoys his independence. President of Source for Sports in London, Ontario, Hopper owns and operates a single sports store—but receives the purchasing discounts normally only available to large national chains through his membership in Source for Sports. Hopper remains an independent retailer, making his own decisions about buying and selling. What he gets from his buying group is the one thing he can’t give himself : strength in numbers. ( TO P ) P H OTO C O U R T E SY O F S O U R C E F O R S P O R T S , ( B OT TO M ) P H OTO C O U R T E SY O F C A S T L E B U I L D I N G C E N T R E S G R O U P LT D. Benefits of Buying Groups Mike Lindsay, President of Source for Sports, says that its centralized marketing program allows independent members “to achieve economies of scale in their markets.” This national advertising program complements the local advertising that members do in their own markets. “We help them to be involved in things they might not be able to do on their own,” he says. “Doing it on their own,” however, remains central to the mission of buying groups. Independent retailers maintain their status as independents—they own the buying groups, in most cases. The buying group does not own them. Steve Hidber, President of Oscar’s Source for Sports in Smithers, B.C., says that Source for Sports creates memberled buying committees and provide advice on marketing and buying decisions. Hidber participates because the programs make buying decisions easier. “I think it’s awesome,” he says. Castle Building Centres Group, a member-owned, notfor-profit co-op since 1963, functions as a crossroads where vendors come to visit members—on the members’ turf. “We provide centralized invoicing and billing,” says Ken Jenkins, President of Castle. With Castle, vendors deal with one customer that guarantees credit for members, consolidates the group’s purchase, and simplifies paperwork. This lets members focus on their core business: customer service. “We act as a central body that adds benefit to vendors and members,” says Jenkins. Both Castle Building Centres and Source for Sports joined Retail Council of Canada as members. The unique identity of independent buying groups allows them to leverage more from associations like RCC. Both Source For Sports (top) and Castle Building Centres (bottom) joined RCC as members, benefiting from advocacy and services. About Buying Groups As member-owned co-operative organizations, buying groups give independent retailers influence in the market that they rarely have on their own. The principle behind the group is strength in numbers. By organizing, buying groups assure independents greater purchasing power, centralized marketing, and other business support. Buying groups have been organized in the Canadian hardware, pharmaceutical, office supplies, building supplies, and grocery categories. While each buying group operates differently, most buying groups are member-owned and also governed by members. In some cases, members purchase one share and one vote in the group’s decision-making. As non-profits, buying groups return surpluses to the members, usually according to what that store’s contributed to the group’s activities. 4 2 | C A N A D I A N R E TA I L E R | J A N UA R Y/ F E B R U A R Y 2 010 |

Table of Contents for the Digital Edition of Canadian Retailer - January/February 2010

Canadian Retailer - January/February 2010
Publisher’s Desk
Shop Talk
Store Design
In Your Interest
Retail Generations
Retail Profile
Loss Prevention Supplement
Human Resources
Marketing and Advertising
Member Profile
Advertisers’ Index
You Asked Us

Canadian Retailer - January/February 2010