Friday, September 16, 2011: 10:16:22 PM

Retail Poll Feature

Sourcing trends changing among retailers

While larger retailers enjoy upper hand in sourcing better quality, middle-men continue to get eliminated in retailers’ quest for competitive pricing

Sourcing can be the key to success for a retailer. Sourcing authentic and quality material is often a challenge that retailers face and each company has its unique method of ensuring exclusivity and authenticity of their sources. While some of the smaller companies invest in researching, testing of products and increasing vendor base, the larger players look for sources that can provide quality material in bulk quantities over longer periods.

“The right attitude of the source or factory is another key factor in getting a quality source. We have seen that there have been instances where we were not happy with the products from a source but because they had an attitude to improvise and learn, they were able to meet up to our expectations in quality and product by ensuring that they motivate their workers to understand and produce as per our requirements,” says Harsha Karnani, founder of Jodhaa, a soft furnishings store in Mumbai.
Larger retailers, however, have the capital to invest in enhancing the quality of their source which gives them a slight advantage over their smaller counterparts. Since most of the larger players have their own supply chain management system in place, they go a long way in eliminating the middle-men who make significant margins by being a part of the supply chain. Not only do the middle men not add value to products often but also deprive the producer, in certain cases, of legitimate prices for their products. A recent survey by Retailing360 saw voters unanimously agreeing that larger retailers did have an advantage over their smaller counterparts when it came to sourcing.
Speaking of the elimination of the middle-men by retailers, Manoj Gupta, founder of Craftsvilla, a leading online retailer dealing in handicrafts and green craft products, says, “With a cut in prices by eliminating the middlemen the customer is getting the benefits of low prices.”
Therefore, smaller retailers have to find out ways to eliminate the role of middle-men in sourcing.

Tias Chakraborty

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