Royal Buying Group
Issue Summer 12
It may represent those who make and sell goods, but the Royal Buying Group’s (RBG) success is driven by data. As a broker for more than 6,000 large-chain and independently operated convenience stores, Royal Buying Group offers management services that reduce operating costs, maximize sales volume and enhance profitability. RBG can tailor operating and marketing programs keyed to a business size, location or specialty.
But its greatest calling card may be that of a liaison between retailers and vendors that negotiates, implements and tracks programs with hundreds of national manufacturers and suppliers. It leverages the strength of numbers to demand the best rebates, allowances, placement dollars, special pricing and vendor programs available on a national level, and it does so with the help of technology.
“Where we’ve been successful is in continuing to invest in database and proprietary pro¬cesses that allows us to automate some programs and identify different types of programs that manufacturers offer today,” says Michael Zielinski, president and CEO. “In the past, it was a simple design. If you stocked certain products or certain SKUs, you would receive a standardized rebate. Today’s manufacturers are developing what we deem as hurdle type programs. You can earn more money back, but it takes a more collaborative effort between retailers and manufacturers in order to receive funding to support those programs.”
Zielinski explains that many vendors are developing multi-pronged rebate programs in which a retailer must purchase a minimum number of certain or each SKU before qualifying for a rebate. However, with retailers purchasing so many products from multiple vendors, it’s very time consuming for retailers to check where they stand in terms of rebates. And in some cases, a retailer could be just a few products away from meeting the requirement and just miss the mark, losing out on valuable dollars. RBG’s databases and software tracks its members’ purchases and has information readily available to see how each member is tracking.
“We can do reports and communicate with retailers and say, ‘You are these specific SKUs short of qualifying. If you would like to receive moneys back, you have to purchase these SKUs by the end of the quarter.’ If they would like to qualify, they can take the initiative and order it themselves or we can place it for them to make sure they qualify for those rebates.
“Our streamlining is definitely in the automation, in tracking data and communication between us and the retailer,” Zielinski continues. “Without this system in place, it would be awfully hard to get the type of performance manufacturers are looking for.”
Widening the Gap
RBG is continuing to widen the gap between itself and competitors through further investments in software and databases. Zielinski says RBG plans to announce new data-driven tools before the end of the year that will provide value to retailers and manufacturers.
“Data continues to drive decision-making today and it will only get more complex in the future,” Zielinski says. “We have to continue to develop tools to help both manufacturers and retailers be profitable. We are looking at other programs to develop reports that will compare what a member is buying compared to other members in their market to make sure they are all getting the right product in their stores.”
In today’s economy, Zielinski stresses that programs like these are even more important. Companies are still trying to grow their business, which is no easy feat when consumer spending is low but promotional spending is still a necessity. Having targeted programs that encourage retailers to buy the right products for their market while also reaping valuable rebates is a win-win.
“The economy is not that easy and everyone is stretching their promotional dollars,” Zielinski explains. “They don’t make it easy for retailers to qualify but those who want to grow their business can with an efficient process that provides great value to the manufacturers and additional profit to operating sites.”