May 20, 2025 • 25 mins
Trust, time, and transparency form the backbone of the most successful business partnerships in retail.
Drawing from 35 years of working together, Terry Trofholz and host Deanah Baker unpack what makes supplier-retailer relationships truly effective in today's complex business environment.
They begin by acknowledging a challenge many businesses face: with increased responsibilities and the pressures of omnichannel retail, finding time for meaningful collaboration has become harder yet more essential than ever. Both veterans share candid observations about how the fundamentals of business relationships haven't changed despite the evolving landscape.
The conversation dives deep into what builds trust between partners. When a supplier takes on a major program, they're essentially being entrusted with a significant portion of the retailer's success—affecting sales goals, department performance, and even personal compensation. This responsibility creates a natural alignment of interests: suppliers succeed when retailers succeed, creating a virtuous cycle of growth.
Perhaps most valuable are their insights into navigating challenges. From late deliveries to underperforming products, they discuss how transparent communication—especially delivering bad news promptly—distinguishes exceptional business partners. Terry shares a compelling story of facing a potential business crisis when losing a major licensing agreement, and how Walmart's collaborative approach helped transform that challenge into an opportunity that ultimately doubled their business.
The retail veterans make clear that strong collaboration doesn't mean avoiding tough negotiations. What it does mean is building enough mutual understanding and respect that both sides recognize their shared interests in long-term success. As the retail landscape continues to be dominated by giants like Walmart and Amazon, those retailers who can optimize their supplier partnerships gain a critical competitive advantage.
What's your experience with business collaboration? Have you seen the benefits of investing in strong partnerships? Share your thoughts and join the conversation.
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Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:07):
today's topic.
When I was thinking about whoshould I, who should I talk with
, you know who'd have to be agreat uh partner in, and I
thought of terry, because you'revery well-rounded, so much
experience.
But you have also, through theyears, been an incredible
business partner to me and tothe Walmart team, and so you are
(00:28):
a natural fit for me A businesspartner that met you in 1990, I
think.
I started Walmart September of1990.
I showed up, yes, and I met yousoon after.
Yeah, and I was at the bottomof my ladder at that time.
So, yeah, it's been many.
(00:50):
How many years?
35?
, 35.
We were just talking about Justamazing.
But today the title would becollaboration.
And then, even taking it a stepfurther, how do you arrive, how
do you get to the place ofmutually beneficial
relationships in business?
You know, it's not just goodfor the retailer.
The supplier benefits, to thepoint that they grow stronger as
(01:13):
the retailer grows stronger.
And to me that, as we move oninto the future, it's critical
to understand, with all of thisnoise, all of these
responsibilities that we justtalked about, how do you still
make time for that?
Because, to me, thatcollaboration is just
(01:34):
fundamental to everything inbusiness, right?
Because you can't do it byyourself.
Speaker 2 (01:38):
No, that's exactly right, and you had mentioned to
me before that you'd heard theword collaboration a lot at the
most recent Walmart summit.
They want collaboration.
Yes, and I've had other peoplemy son, particularly, was there
as well and he was veryencouraged by what he heard from
(02:01):
Latrice.
What he heard from Latrice, andyou know specifically that she
wanted every supplier in theroom to feel like Walmart was
their favorite customer andthat's certainly the way.
(02:26):
You know that created a lot ofgrowth and a lot of strength for
Walmart over the years.
As we said, what has changed alittle bit is time, because of
the complexities of the businessand what everybody has to do,
and you certainly need some time.
But I mean, you've got to haveopen, honest communication and
that takes some time.
(02:46):
So that's a little bit of achallenge.
And then, if you can add somehistorical perspective to it, I
think that that helps Certainlyfor every supplier.
You know Walmart, amazon,target they're going to be big
customers of theirs, so theyunderstand the importance, be
big customers of theirs, so theyunderstand the importance.
(03:07):
There's been a lot of turnoverof personnel both on the
supplier and the retailer side.
I mean a lot of people.
Well, I've been in thisbusiness long enough that a lot
of people have retired alongwith me.
But COVID, I think, also scareda lot of people off and brought
a lot of new people in, and forthat reason, if you can sit
down and have a meeting and youcan start maybe with, every
(03:29):
retailer has their version of ascorecard or at least some
discussion of past historicalbusiness.
You know what is this suppliermeant to me in the past.
I mean, has this been a youknow?
Is this a relatively newsupplier that I've just started
doing business with and thingsare going okay but we've got
things to prove in the future?
(03:50):
Or is this somebody that hasbeen a strategic partner, that
we've done a lot of business anda lot of good things together?
That helps at least prioritizethe time that you need to spend,
and there's no doubt that Ican't imagine the number, the
matrix, the supplier matrix thatsuppliers or that retailers
(04:11):
have now when you throw e-com inwith store assortment.
Speaker 1 (04:14):
So talk to me about that.
So, historical perspective whatif there's a new strategy and
you know the retailer in thiscase wants to go a different
direction than in the past oraugment it, and you're a
historical supplier, are youstill important?
Speaker 2 (04:38):
Well, let's talk about what that new direction is
.
Because, quite honestly, onceagain we said open, honest
communication.
I mean, if my historicalperspective, my success, has
been in knits and now they wantto do something in wovens and I
don't make wovens, then it's upto me to say you know what?
(05:01):
Because the mistake that mostsuppliers make is oh, I can make
anything.
Speaker 1 (05:06):
You know, don't worry , I may have got that a time or
two, jerry, you may have got atime or two.
Speaker 2 (05:09):
You know what Not everybody can make everything,
so that's a significant changeand they're typically not that
significant.
So what is the strategy?
Which direction do you want togo in?
What are the benchmarks forthat strategy?
What is the trend behind thatstrategy?
Buyers, you know all over, arereally being challenged for
(05:32):
innovation and newness, andthat's what we want to see.
When we go into a store I mean,if you go into a store a few
times or you go online to buysomething you constantly see the
same thing you start to loseinterest.
It's like a restaurant thatnever changes its menu.
You know, after a while, evenif I like the restaurant, I've
eaten most of the things on hereand you know I'm going to look
for something else.
We have to hit the wants aswell as the needs.
(05:54):
Exactly, exactly so.
But what I think?
While you're reaching forinnovation and newness, if you
have a supplier that you've hada lot of success with, then
there's no reason a longtimesupplier can't bring innovation
and newness.
Innovation and newness doesn'tmean newness in the supplier.
(06:17):
It means newness in theassortment or whatever is being
brought, and if you can have aconversation that says look,
this is really what I'm lookingfor now.
This is the trend that I'veseen.
This is what I'm happy with.
This is where I'm getting mybenchmarks.
Then you give the supplier anopportunity at least to bring
that back to you, because it isso difficult.
(06:39):
I mean, every major retailerhas a different way of doing
business.
You know, target is verydifferent from Walmart, is very
different from Amazon, andthere's a learning curve that
can cost both sides a lot ofmoney.
And you know there's a learningcurve to get through the
(07:00):
testing that needs to be done.
There's a learning curve thatgoes through the distribution
channels.
There's a learning curve thatgoes through the distribution
channels.
There's a learning curve thatgoes through how do we replenish
this.
There's a learning curve thatgoes through how do we manage
this business to success.
So, before you leave somebodythat knows how to do all those
things things for a new supplierit's worth at least seeing what
(07:28):
that challenging the supplierthat's in place to see what can
be done to bring you the newnessthat you're looking for or the
innovation that you're lookingfor.
Speaker 1 (07:37):
But there is a place for new suppliers.
Oh, absolutely, because youknow you and I know apparel.
But let's talk about, you know,some other areas.
(07:57):
Oh, absolutely, that new itemwouldn't be available to a large
, you know viewing of customersif they weren't given the time,
you know, to have a seat at thetable.
Speaker 2 (08:09):
Absolutely, absolutely.
And once again, that's what itcomes down to is time.
How much time do we have to dothat, how much time can we
devote to that, and how relevantor how much of the business
does it really affect?
So there's so many things thatgo into prioritizing how to get
about to that.
And you know the other thingthat it's not just experience
(08:32):
that is important in arelationship, the trust that you
have.
You know, I've always kind ofthought of it as if you're a
buyer and you're trusting mewith this program.
You know it might be a roundrecord, it might be whatever it
(08:53):
may be, but if it's a majorprogram you're trusting me with
a good part of the success ofyour department.
You also may be.
I mean, if I don't deliver thisup to your expectations and on
time and in full, then I put atrisk your sales goals.
I put at risk your bonus.
(09:14):
I mean, let's face it, you'regetting personal now, terry,
yeah, we're all in this to makemoney.
So those are the things thatare at risk.
So my own personal philosophythat I've always tried to pass
on to the salespeople that workfor me is if I sell this buyer,
(09:35):
this retailer, something that isfinancially successful and does
well and I execute it, then Ihave a chance to do business
with them again going forward.
If I don't, then they've gotevery right to move their
business on down the line and dobusiness with somebody else,
and I don't want that to happen.
Speaker 1 (09:56):
Right, Exactly, and you know the trust is definitely
a two-way street.
Speaker 2 (10:03):
Trust, and trust can come a lot through how a
business is managed.
I'm giving you this business,I'm giving you this to manage.
Take care of it for me.
I'm giving you this business,I'm giving you this to manage.
Take care of it for me.
And I think you know examplesof taking what we always try.
Whether it's a 500,000 unitorder, 100,000 unit order or a
(10:25):
million, if it's a large order,you've got a pretty good idea
within the first three or fourweeks.
If you've once againcollaborated, you've shared
ladder plans, you know theexpectations.
What does a win look like forboth sides?
Within the first three or fourweeks, you've got an idea if
you're going to make that salesplan or not, or at least you've
(10:46):
got a pretty good inkling.
So if it was a million unitprogram and you're exceeding
sales plan, you know deliveringthat good news.
That's easy, that is so easy.
Another way I always thoughtyou could judge a good
salesperson is how well hedelivers bad news and how
(11:08):
quickly and accurately hedelivers it.
Because if that million unitprogram based on sales is going
to be lucky to sell through at60 or 65%, then how do we
address that?
And those are difficultconversations because that means
I've got to go either suggest arollback that could cost us
(11:30):
money, or I've got to go suggesthow do we get out of some of
these units.
Speaker 1 (11:36):
Well, and I would think it would always be kind of
the seller's dilemma Ifsomething's not running on time,
when you say I can fix it, Ican handle it myself, we can
deliver it on time, and you sayquiet, right, and you don't
divulge it to your retailpartner, versus when you do,
because you don't want to bringthem like.
You know every issue, you wantto try and solve it, but there
(11:58):
has to be that line in the sandfor you of they deserve to know.
You know, here's everythingwe're still going to do to try
our best, but, like I'm sureyou've come across, that in your
career many times?
Speaker 2 (12:08):
No, that's absolutely true, because early you know,
if you're six weeks out on adelivery and your factory tells
you we're, you know, we'rerunning a little bit behind here
, well, you know what does thatmean.
Can you specify that and can wefix it?
You know what can we do, andthere's always something a
supplier can do, because you candevote another line to that
(12:31):
product.
You have to take it fromsomewhere else, but you can
devote another line to thatproduct, or you can run overtime
on that product, and so thereare ways to fix things if you're
six weeks out.
There are ways to fix things ifyou're four weeks out.
But when you're two to threeweeks out, if they're still
telling you they're going to runlate, then there's a really
(12:52):
good chance they're going to runlate.
You've got to raise a flag.
Yes, yeah, you've got to have aconversation.
Speaker 1 (13:04):
Well, and from my point on the trust suppliers,
that would tell me that I won'tsay I was this good at it at the
beginning, but, being a trustedpartner back, let's say you
brought that to me and you'regoing to be two weeks late.
Yep, okay.
Let's say you brought that tome and you're going to be two
weeks late.
Yep, okay, I would look at myentire assortment.
Am I open to buy?
Can I afford for this to belate or can I not?
Is it detrimental or is it justan inconvenience?
(13:26):
Yeah, and anytime that I couldweather it with the supplier, I
would, and the idea was thatit's not hurting the ultimate
customer.
I can weather it within myassortment and there's going to
be a time when I'm going to needtheir help.
Yeah, hard to say.
(13:50):
Any big business situation Ifound myself in that wasn't good
trusted suppliers and I'm nottalking at all about sharing
things that shouldn't be shared,sure, but things that were
appropriate, like within the twobusinesses they would help me
come up with the best solutionto solve it.
(14:10):
Yeah, you know I could come upwith any solution, but the best
required more than one mind onthe subject.
Speaker 2 (14:18):
Yeah, yeah, and it takes a willingness to do that.
I mean, if you've got apartnership and you've got
somebody that you've been doingbusiness with for a long time,
maybe within a week you have tosay okay, we're going to have to
expedite the freight on all ofthis.
That costs a significant amountof money.
Or maybe you do that, or maybeI come to you and I say, deanna,
(14:39):
you know what?
We're going to be two weekslate, there's nothing I can do
about that.
I'll help you at the end of theseason and we'll take in less
inventory, or I'll help you witha markdown, or I'll do
something to prevent this fromreally harming the overall
financial results.
There's lots of ways.
Once again, it goes back to anopen communication back and
(15:00):
forth that you can solveproblems.
Speaker 1 (15:03):
And I think it's long term too, terry, because, okay,
let's say we have that oneseason.
If you have it repeated seasons, the trust goes down.
Like you know, the money in thebank of trust goes down over
time, right, because thissupplier has trouble being
consistent, right?
If it's a one-time occurrenceand they've told me that we
(15:23):
worked through it together yourbank of trust goes up right and
so you know, early in amerchant's career, you may tend
to think that the suppliers havebuckets of money they walk
around with all the time.
Just you know.
Here's career, you may tend tothink that the suppliers have
buckets of money they walkaround with all the time.
Just you know.
Yeah, here's some for you.
Yes, the more I learned thatbusiness model of my partner, I
(15:47):
feel like I was able to makebetter decisions for my own
business.
Yes, right, because you know.
One of my friends told me, whenyou know better, you do better.
Right, because you know someone of my friends told me, when
you know better, you do better.
Yeah, but it was that makingsure that I understood the
suppliers puts and takes, whatthey needed to run their
business more efficiently,helped us both make more
(16:08):
decisions that ultimately foundtheir way to the customer in
value.
Speaker 2 (16:11):
Yeah, I had a chance to talk to a young man who was
being recruited by Walmart.
He was from Duke and you knowhe said is there any advice that
you would give me?
And I said, well, you know, ifyou know that you're sitting
down across from whateverdepartment you're in, you're
(16:33):
sitting down with the supplierand this supplier has you've
done business with for a while,his best interest is served if
he sells you something that yousell.
So try to always remember that,because for him to sell you
(16:56):
something that you don't sell,eventually you're not going to
do business with him and so trythat.
That takes some trust and Ithink you had mentioned this
once before.
You'll kind of get an idea ofthe people that you can trust in
business and the kind of peoplethat you can't.
You know, obviously, if you'vegot somebody that you know
(17:18):
doesn't doesn't tell you thathe's going to have problem with
the delivery until the daybefore, doesn't tell you that
he's going to have a problemwith the delivery until the day
before, or you've got he hastold you that he would do
something that he doesn't do,there's all of those.
There's all of those kinds ofthings.
But you get kind of an idea andthat's where you know to the
(17:40):
degree that you can move.
I think inherently there's aadversarial relationship that
can be thought of in, or this,this in a buyer seller
relationship where he just wantsto sell me something and uh, so
I can't trust him.
That's um try if you could tryto move beyond that and
(18:04):
understand that they, they wantto do well, so you do well, so
they can do well again.
Speaker 1 (18:09):
Now you're saying that all of our cost
negotiations went extremelysmooth, right?
Oh no, oh no.
Speaker 2 (18:15):
No, no, no, no, no.
You know what?
What we loved about and stilllove about Walmart was the cost.
Negotiations are always, I mean, they're always tough.
They're always tough as can be,but once you've agreed upon a
price, then you don't have.
You know, you can be, you can.
There's certain retailers thatwill nickel and dime you to
(18:37):
death over any.
It's never, there is never afinal price.
So yeah, no, I mean you have tobe, is never a final price.
So yeah, no, I mean you have tobe competitive on a worldwide
basis.
There's, or there's, or go lookfor something else to do.
Speaker 1 (18:53):
The world is a competition.
I say that all the time, yes,and it really is.
So bring your A game right, andthings tend to work out the way
they should.
So, terry, you've given us lotsof things to think about today,
and just given me anopportunity to reflect as well.
Is there a particular story ortwo that you could leave our
viewers with of just kind oflike how this has been played
(19:18):
out in your career?
Speaker 2 (19:19):
Sure, well, you know, from a partnership standpoint
and how that's played out forboth parties.
I think you know we talkedabout the COVID crisis and what
we were able to do when you guyssaid, okay, you know, this is
somebody that we think can helpus with that.
But beyond that, we had ameeting with you and then Andy
(19:41):
Barron, back in gee, I want tosay it was maybe, yeah, it was
2019.
And this was just a yearly orsemi-annual meeting to kind of
say, okay, this is, you know,intradeco.
Here's what we're doing toinvest in our business, here's
what we're doing to align withyour strategic goals.
And at the end of that meeting,we said you know, there's a.
(20:05):
We had a large workwear businesswith a national brand and we
were one of the.
We were a licensee and we weremaking products that they
weren't really that good at, butthey were in apparel.
You kind of rounded out thatassortment yes, exactly.
And that business grew with youand a couple of other retailers
to be maybe 15% of the totalbusiness we were doing.
(20:27):
And that brand was bought byanother national brand that
already had a workwear businessin place and it was about the
time that our licensingagreement was about to be
renegotiated and they decidedthat they could make those
products that we were making.
And if you make a productyourself and sell it, then you
(20:50):
realize the entire margin versusjust a royalty margin.
And so we were about to losethat license and lose a huge
chunk of our business.
And you suggested another brandthat might be really good in
workwear, and we had thoughtabout that brand a little bit.
(21:11):
And you know I'm pretty surewhat I said was you know, deanna
, if you guys could saysomething to that brand for us,
endorse us as a, you know,reliable workwear supplier that
you've counted on, it would meana lot to us moving forward with
them.
And you did that.
And that business today isabout twice as large as the
(21:36):
business that we had with theother brand.
It also brought a new brandinto the workwear assortment,
which was good, because at thetime there was only about one
brand, so it brought in somecompetition between two national
brands.
Speaker 1 (21:50):
Well, and that's exactly.
You know, beyond the fact thatyou know I like you and I didn't
do it for that reason no, Iunderstand that, but it was
because my customer needed anadditional choice, right, and
the world is a competition.
And so, being an advocate formy customer, we needed to offer
(22:12):
more breadth of assortment,which meant an additional brand,
and it played out very well.
And I think you have an ongoingrelationship Interdeco with
that national retailer goingforward.
All I did was make anintroduction, you know
relationship, uh, interdeco withthat national retailer going
forward.
Um, all I did was make anintroduction, you know, but
knowing that was a lot, but meknowing what you needed, right,
(22:35):
uh, collaboration, uh, on anongoing basis, allowed me to
play a role in connecting thedots.
If I hadn't been curious enoughto ask, you know, it wouldn't
have happened.
And that, ultimately, I think,is just one way collaboration
and then going beyond that towhat's mutually beneficial for
(22:58):
both businesses.
It takes a little morethoughtful effort than just
let's work together on something, yeah, and as the supplier gets
stronger, the retailer getsstronger and the support
continues.
So, you know, easier said thandone.
But with everything there is tobe done in this omni-channel
(23:22):
world, there's one truth I know,is that we're not going back?
Yeah Right, it's here to stay.
Is that we're not going back?
Yeah Right, it's here to stay?
Number two we have to figureout a way to take care of the
two channels as one, but alsoget back to what I believe is
the foundational strength of abusiness and its collaboration.
Speaker 2 (23:42):
Yeah, without a doubt , the supplier-retailer
relationship.
You know the business continuesto be extremely competitive out
there.
You know we see every dayheadlines about how.
You know it's really the twobehemoths now Walmart and Amazon
are fighting it out andwhatever advantage you can gain
(24:08):
can make the difference and Ithink your ability to really
optimize your supplier base andput them in exactly the position
that Latrice said she wantedevery supplier in that room to
value.
Really, what she was saying isI want you to value our business
more than any other retaileryou're doing business with, and
(24:29):
that comes from collaborationand great supplier retailer
relationships.
Speaker 1 (24:37):
Absolutely Well, terry.
I've enjoyed this immensely.
I could talk longer.
We may just go get coffee afterthis and continue the
conversation, but thank you somuch for joining us today on
Doing Business in Bentonville Toour viewers, listeners.
Thank you for joining us.
Please give us feedback.
(24:57):
You can leave it on the DoingBusiness in Bentonville website
or you can look at my LinkedIn.
Deanna Baker and I would loveto hear your comments, your
feedback, and it'll just makethe next podcast better.
So thank you all today, enjoythe rest of your day and let's
go sell some stuff.
Thank you, thanks, deanna.
today's topic.
When I was thinking about whoshould I, who should I talk with
, you know who'd have to be agreat uh partner in, and I
thought of terry, because you'revery well-rounded, so much
experience.
But you have also, through theyears, been an incredible
business partner to me and tothe Walmart team, and so you are
(00:28):
a natural fit for me A businesspartner that met you in 1990, I
think.
I started Walmart September of1990.
I showed up, yes, and I met yousoon after.
Yeah, and I was at the bottomof my ladder at that time.
So, yeah, it's been many.
(00:50):
How many years?
35?
, 35.
We were just talking about Justamazing.
But today the title would becollaboration.
And then, even taking it a stepfurther, how do you arrive, how
do you get to the place ofmutually beneficial
relationships in business?
You know, it's not just goodfor the retailer.
The supplier benefits, to thepoint that they grow stronger as
(01:13):
the retailer grows stronger.
And to me that, as we move oninto the future, it's critical
to understand, with all of thisnoise, all of these
responsibilities that we justtalked about, how do you still
make time for that?
Because, to me, thatcollaboration is just
(01:34):
fundamental to everything inbusiness, right?
Because you can't do it byyourself.
Speaker 2 (01:38):
No, that's exactly right, and you had mentioned to
me before that you'd heard theword collaboration a lot at the
most recent Walmart summit.
They want collaboration.
Yes, and I've had other peoplemy son, particularly, was there
as well and he was veryencouraged by what he heard from
(02:01):
Latrice.
What he heard from Latrice, andyou know specifically that she
wanted every supplier in theroom to feel like Walmart was
their favorite customer andthat's certainly the way.
(02:26):
You know that created a lot ofgrowth and a lot of strength for
Walmart over the years.
As we said, what has changed alittle bit is time, because of
the complexities of the businessand what everybody has to do,
and you certainly need some time.
But I mean, you've got to haveopen, honest communication and
that takes some time.
(02:46):
So that's a little bit of achallenge.
And then, if you can add somehistorical perspective to it, I
think that that helps Certainlyfor every supplier.
You know Walmart, amazon,target they're going to be big
customers of theirs, so theyunderstand the importance, be
big customers of theirs, so theyunderstand the importance.
(03:07):
There's been a lot of turnoverof personnel both on the
supplier and the retailer side.
I mean a lot of people.
Well, I've been in thisbusiness long enough that a lot
of people have retired alongwith me.
But COVID, I think, also scareda lot of people off and brought
a lot of new people in, and forthat reason, if you can sit
down and have a meeting and youcan start maybe with, every
(03:29):
retailer has their version of ascorecard or at least some
discussion of past historicalbusiness.
You know what is this suppliermeant to me in the past.
I mean, has this been a youknow?
Is this a relatively newsupplier that I've just started
doing business with and thingsare going okay but we've got
things to prove in the future?
(03:50):
Or is this somebody that hasbeen a strategic partner, that
we've done a lot of business anda lot of good things together?
That helps at least prioritizethe time that you need to spend,
and there's no doubt that Ican't imagine the number, the
matrix, the supplier matrix thatsuppliers or that retailers
(04:11):
have now when you throw e-com inwith store assortment.
Speaker 1 (04:14):
So talk to me about that.
So, historical perspective whatif there's a new strategy and
you know the retailer in thiscase wants to go a different
direction than in the past oraugment it, and you're a
historical supplier, are youstill important?
Speaker 2 (04:38):
Well, let's talk about what that new direction is
.
Because, quite honestly, onceagain we said open, honest
communication.
I mean, if my historicalperspective, my success, has
been in knits and now they wantto do something in wovens and I
don't make wovens, then it's upto me to say you know what?
(05:01):
Because the mistake that mostsuppliers make is oh, I can make
anything.
Speaker 1 (05:06):
You know, don't worry , I may have got that a time or
two, jerry, you may have got atime or two.
Speaker 2 (05:09):
You know what Not everybody can make everything,
so that's a significant changeand they're typically not that
significant.
So what is the strategy?
Which direction do you want togo in?
What are the benchmarks forthat strategy?
What is the trend behind thatstrategy?
Buyers, you know all over, arereally being challenged for
(05:32):
innovation and newness, andthat's what we want to see.
When we go into a store I mean,if you go into a store a few
times or you go online to buysomething you constantly see the
same thing you start to loseinterest.
It's like a restaurant thatnever changes its menu.
You know, after a while, evenif I like the restaurant, I've
eaten most of the things on hereand you know I'm going to look
for something else.
We have to hit the wants aswell as the needs.
(05:54):
Exactly, exactly so.
But what I think?
While you're reaching forinnovation and newness, if you
have a supplier that you've hada lot of success with, then
there's no reason a longtimesupplier can't bring innovation
and newness.
Innovation and newness doesn'tmean newness in the supplier.
(06:17):
It means newness in theassortment or whatever is being
brought, and if you can have aconversation that says look,
this is really what I'm lookingfor now.
This is the trend that I'veseen.
This is what I'm happy with.
This is where I'm getting mybenchmarks.
Then you give the supplier anopportunity at least to bring
that back to you, because it isso difficult.
(06:39):
I mean, every major retailerhas a different way of doing
business.
You know, target is verydifferent from Walmart, is very
different from Amazon, andthere's a learning curve that
can cost both sides a lot ofmoney.
And you know there's a learningcurve to get through the
(07:00):
testing that needs to be done.
There's a learning curve thatgoes through the distribution
channels.
There's a learning curve thatgoes through the distribution
channels.
There's a learning curve thatgoes through how do we replenish
this.
There's a learning curve thatgoes through how do we manage
this business to success.
So, before you leave somebodythat knows how to do all those
things things for a new supplierit's worth at least seeing what
(07:28):
that challenging the supplierthat's in place to see what can
be done to bring you the newnessthat you're looking for or the
innovation that you're lookingfor.
Speaker 1 (07:37):
But there is a place for new suppliers.
Oh, absolutely, because youknow you and I know apparel.
But let's talk about, you know,some other areas.
(07:57):
Oh, absolutely, that new itemwouldn't be available to a large
, you know viewing of customersif they weren't given the time,
you know, to have a seat at thetable.
Speaker 2 (08:09):
Absolutely, absolutely.
And once again, that's what itcomes down to is time.
How much time do we have to dothat, how much time can we
devote to that, and how relevantor how much of the business
does it really affect?
So there's so many things thatgo into prioritizing how to get
about to that.
And you know the other thingthat it's not just experience
(08:32):
that is important in arelationship, the trust that you
have.
You know, I've always kind ofthought of it as if you're a
buyer and you're trusting mewith this program.
You know it might be a roundrecord, it might be whatever it
(08:53):
may be, but if it's a majorprogram you're trusting me with
a good part of the success ofyour department.
You also may be.
I mean, if I don't deliver thisup to your expectations and on
time and in full, then I put atrisk your sales goals.
I put at risk your bonus.
(09:14):
I mean, let's face it, you'regetting personal now, terry,
yeah, we're all in this to makemoney.
So those are the things thatare at risk.
So my own personal philosophythat I've always tried to pass
on to the salespeople that workfor me is if I sell this buyer,
(09:35):
this retailer, something that isfinancially successful and does
well and I execute it, then Ihave a chance to do business
with them again going forward.
If I don't, then they've gotevery right to move their
business on down the line and dobusiness with somebody else,
and I don't want that to happen.
Speaker 1 (09:56):
Right, Exactly, and you know the trust is definitely
a two-way street.
Speaker 2 (10:03):
Trust, and trust can come a lot through how a
business is managed.
I'm giving you this business,I'm giving you this to manage.
Take care of it for me.
I'm giving you this business,I'm giving you this to manage.
Take care of it for me.
And I think you know examplesof taking what we always try.
Whether it's a 500,000 unitorder, 100,000 unit order or a
(10:25):
million, if it's a large order,you've got a pretty good idea
within the first three or fourweeks.
If you've once againcollaborated, you've shared
ladder plans, you know theexpectations.
What does a win look like forboth sides?
Within the first three or fourweeks, you've got an idea if
you're going to make that salesplan or not, or at least you've
(10:46):
got a pretty good inkling.
So if it was a million unitprogram and you're exceeding
sales plan, you know deliveringthat good news.
That's easy, that is so easy.
Another way I always thoughtyou could judge a good
salesperson is how well hedelivers bad news and how
(11:08):
quickly and accurately hedelivers it.
Because if that million unitprogram based on sales is going
to be lucky to sell through at60 or 65%, then how do we
address that?
And those are difficultconversations because that means
I've got to go either suggest arollback that could cost us
(11:30):
money, or I've got to go suggesthow do we get out of some of
these units.
Speaker 1 (11:36):
Well, and I would think it would always be kind of
the seller's dilemma Ifsomething's not running on time,
when you say I can fix it, Ican handle it myself, we can
deliver it on time, and you sayquiet, right, and you don't
divulge it to your retailpartner, versus when you do,
because you don't want to bringthem like.
You know every issue, you wantto try and solve it, but there
(11:58):
has to be that line in the sandfor you of they deserve to know.
You know, here's everythingwe're still going to do to try
our best, but, like I'm sureyou've come across, that in your
career many times?
Speaker 2 (12:08):
No, that's absolutely true, because early you know,
if you're six weeks out on adelivery and your factory tells
you we're, you know, we'rerunning a little bit behind here
, well, you know what does thatmean.
Can you specify that and can wefix it?
You know what can we do, andthere's always something a
supplier can do, because you candevote another line to that
(12:31):
product.
You have to take it fromsomewhere else, but you can
devote another line to thatproduct, or you can run overtime
on that product, and so thereare ways to fix things if you're
six weeks out.
There are ways to fix things ifyou're four weeks out.
But when you're two to threeweeks out, if they're still
telling you they're going to runlate, then there's a really
(12:52):
good chance they're going to runlate.
You've got to raise a flag.
Yes, yeah, you've got to have aconversation.
Speaker 1 (13:04):
Well, and from my point on the trust suppliers,
that would tell me that I won'tsay I was this good at it at the
beginning, but, being a trustedpartner back, let's say you
brought that to me and you'regoing to be two weeks late.
Yep, okay.
Let's say you brought that tome and you're going to be two
weeks late.
Yep, okay, I would look at myentire assortment.
Am I open to buy?
Can I afford for this to belate or can I not?
Is it detrimental or is it justan inconvenience?
(13:26):
Yeah, and anytime that I couldweather it with the supplier, I
would, and the idea was thatit's not hurting the ultimate
customer.
I can weather it within myassortment and there's going to
be a time when I'm going to needtheir help.
Yeah, hard to say.
(13:50):
Any big business situation Ifound myself in that wasn't good
trusted suppliers and I'm nottalking at all about sharing
things that shouldn't be shared,sure, but things that were
appropriate, like within the twobusinesses they would help me
come up with the best solutionto solve it.
(14:10):
Yeah, you know I could come upwith any solution, but the best
required more than one mind onthe subject.
Speaker 2 (14:18):
Yeah, yeah, and it takes a willingness to do that.
I mean, if you've got apartnership and you've got
somebody that you've been doingbusiness with for a long time,
maybe within a week you have tosay okay, we're going to have to
expedite the freight on all ofthis.
That costs a significant amountof money.
Or maybe you do that, or maybeI come to you and I say, deanna,
(14:39):
you know what?
We're going to be two weekslate, there's nothing I can do
about that.
I'll help you at the end of theseason and we'll take in less
inventory, or I'll help you witha markdown, or I'll do
something to prevent this fromreally harming the overall
financial results.
There's lots of ways.
Once again, it goes back to anopen communication back and
(15:00):
forth that you can solveproblems.
Speaker 1 (15:03):
And I think it's long term too, terry, because, okay,
let's say we have that oneseason.
If you have it repeated seasons, the trust goes down.
Like you know, the money in thebank of trust goes down over
time, right, because thissupplier has trouble being
consistent, right?
If it's a one-time occurrenceand they've told me that we
(15:23):
worked through it together yourbank of trust goes up right and
so you know, early in amerchant's career, you may tend
to think that the suppliers havebuckets of money they walk
around with all the time.
Just you know.
Here's career, you may tend tothink that the suppliers have
buckets of money they walkaround with all the time.
Just you know.
Yeah, here's some for you.
Yes, the more I learned thatbusiness model of my partner, I
(15:47):
feel like I was able to makebetter decisions for my own
business.
Yes, right, because you know.
One of my friends told me, whenyou know better, you do better.
Right, because you know someone of my friends told me, when
you know better, you do better.
Yeah, but it was that makingsure that I understood the
suppliers puts and takes, whatthey needed to run their
business more efficiently,helped us both make more
(16:08):
decisions that ultimately foundtheir way to the customer in
value.
Speaker 2 (16:11):
Yeah, I had a chance to talk to a young man who was
being recruited by Walmart.
He was from Duke and you knowhe said is there any advice that
you would give me?
And I said, well, you know, ifyou know that you're sitting
down across from whateverdepartment you're in, you're
(16:33):
sitting down with the supplierand this supplier has you've
done business with for a while,his best interest is served if
he sells you something that yousell.
So try to always remember that,because for him to sell you
(16:56):
something that you don't sell,eventually you're not going to
do business with him and so trythat.
That takes some trust and Ithink you had mentioned this
once before.
You'll kind of get an idea ofthe people that you can trust in
business and the kind of peoplethat you can't.
You know, obviously, if you'vegot somebody that you know
(17:18):
doesn't doesn't tell you thathe's going to have problem with
the delivery until the daybefore, doesn't tell you that
he's going to have a problemwith the delivery until the day
before, or you've got he hastold you that he would do
something that he doesn't do,there's all of those.
There's all of those kinds ofthings.
But you get kind of an idea andthat's where you know to the
(17:40):
degree that you can move.
I think inherently there's aadversarial relationship that
can be thought of in, or this,this in a buyer seller
relationship where he just wantsto sell me something and uh, so
I can't trust him.
That's um try if you could tryto move beyond that and
(18:04):
understand that they, they wantto do well, so you do well, so
they can do well again.
Speaker 1 (18:09):
Now you're saying that all of our cost
negotiations went extremelysmooth, right?
Oh no, oh no.
Speaker 2 (18:15):
No, no, no, no, no.
You know what?
What we loved about and stilllove about Walmart was the cost.
Negotiations are always, I mean, they're always tough.
They're always tough as can be,but once you've agreed upon a
price, then you don't have.
You know, you can be, you can.
There's certain retailers thatwill nickel and dime you to
(18:37):
death over any.
It's never, there is never afinal price.
So yeah, no, I mean you have tobe, is never a final price.
So yeah, no, I mean you have tobe competitive on a worldwide
basis.
There's, or there's, or go lookfor something else to do.
Speaker 1 (18:53):
The world is a competition.
I say that all the time, yes,and it really is.
So bring your A game right, andthings tend to work out the way
they should.
So, terry, you've given us lotsof things to think about today,
and just given me anopportunity to reflect as well.
Is there a particular story ortwo that you could leave our
viewers with of just kind oflike how this has been played
(19:18):
out in your career?
Speaker 2 (19:19):
Sure, well, you know, from a partnership standpoint
and how that's played out forboth parties.
I think you know we talkedabout the COVID crisis and what
we were able to do when you guyssaid, okay, you know, this is
somebody that we think can helpus with that.
But beyond that, we had ameeting with you and then Andy
(19:41):
Barron, back in gee, I want tosay it was maybe, yeah, it was
2019.
And this was just a yearly orsemi-annual meeting to kind of
say, okay, this is, you know,intradeco.
Here's what we're doing toinvest in our business, here's
what we're doing to align withyour strategic goals.
And at the end of that meeting,we said you know, there's a.
(20:05):
We had a large workwear businesswith a national brand and we
were one of the.
We were a licensee and we weremaking products that they
weren't really that good at, butthey were in apparel.
You kind of rounded out thatassortment yes, exactly.
And that business grew with youand a couple of other retailers
to be maybe 15% of the totalbusiness we were doing.
(20:27):
And that brand was bought byanother national brand that
already had a workwear businessin place and it was about the
time that our licensingagreement was about to be
renegotiated and they decidedthat they could make those
products that we were making.
And if you make a productyourself and sell it, then you
(20:50):
realize the entire margin versusjust a royalty margin.
And so we were about to losethat license and lose a huge
chunk of our business.
And you suggested another brandthat might be really good in
workwear, and we had thoughtabout that brand a little bit.
(21:11):
And you know I'm pretty surewhat I said was you know, deanna
, if you guys could saysomething to that brand for us,
endorse us as a, you know,reliable workwear supplier that
you've counted on, it would meana lot to us moving forward with
them.
And you did that.
And that business today isabout twice as large as the
(21:36):
business that we had with theother brand.
It also brought a new brandinto the workwear assortment,
which was good, because at thetime there was only about one
brand, so it brought in somecompetition between two national
brands.
Speaker 1 (21:50):
Well, and that's exactly.
You know, beyond the fact thatyou know I like you and I didn't
do it for that reason no, Iunderstand that, but it was
because my customer needed anadditional choice, right, and
the world is a competition.
And so, being an advocate formy customer, we needed to offer
(22:12):
more breadth of assortment,which meant an additional brand,
and it played out very well.
And I think you have an ongoingrelationship Interdeco with
that national retailer goingforward.
All I did was make anintroduction, you know
relationship, uh, interdeco withthat national retailer going
forward.
Um, all I did was make anintroduction, you know, but
knowing that was a lot, but meknowing what you needed, right,
(22:35):
uh, collaboration, uh, on anongoing basis, allowed me to
play a role in connecting thedots.
If I hadn't been curious enoughto ask, you know, it wouldn't
have happened.
And that, ultimately, I think,is just one way collaboration
and then going beyond that towhat's mutually beneficial for
(22:58):
both businesses.
It takes a little morethoughtful effort than just
let's work together on something, yeah, and as the supplier gets
stronger, the retailer getsstronger and the support
continues.
So, you know, easier said thandone.
But with everything there is tobe done in this omni-channel
(23:22):
world, there's one truth I know,is that we're not going back?
Yeah Right, it's here to stay.
Is that we're not going back?
Yeah Right, it's here to stay?
Number two we have to figureout a way to take care of the
two channels as one, but alsoget back to what I believe is
the foundational strength of abusiness and its collaboration.
Speaker 2 (23:42):
Yeah, without a doubt , the supplier-retailer
relationship.
You know the business continuesto be extremely competitive out
there.
You know we see every dayheadlines about how.
You know it's really the twobehemoths now Walmart and Amazon
are fighting it out andwhatever advantage you can gain
(24:08):
can make the difference and Ithink your ability to really
optimize your supplier base andput them in exactly the position
that Latrice said she wantedevery supplier in that room to
value.
Really, what she was saying isI want you to value our business
more than any other retaileryou're doing business with, and
(24:29):
that comes from collaborationand great supplier retailer
relationships.
Speaker 1 (24:37):
Absolutely Well, terry.
I've enjoyed this immensely.
I could talk longer.
We may just go get coffee afterthis and continue the
conversation, but thank you somuch for joining us today on
Doing Business in Bentonville Toour viewers, listeners.
Thank you for joining us.
Please give us feedback.
(24:57):
You can leave it on the DoingBusiness in Bentonville website
or you can look at my LinkedIn.
Deanna Baker and I would loveto hear your comments, your
feedback, and it'll just makethe next podcast better.
So thank you all today, enjoythe rest of your day and let's
go sell some stuff.
Thank you, thanks, deanna.
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