DIY Trade News November 2013
40
NEWS
SPOTLIGHT
COMPANY
PROFILE
FEATURE
SPORT
higher rebates for certain retailers. But he cautions
“The trend overseas now, is for suppliers to lower
what their margins can sustain before agreeing to a
their prices and the only way they can sharpen
particular rebate. “Buyers and the trade negotiators
their pencils on invoice price is to renegotiate their
need to be provided with information to make
Planer/Thicknesser
harder, consumers are demanding cheaper prices.
that it is important for suppliers to carefully work out
rebates,” he says.
an educated decision as to what they should be
Like Weeden and Pieters, van Zyl emphasises
that it’s not only large retailers who push the
brand or strategy you are going into in the market
envelope when it comes to rebates negotiations,
with, you’ll understand
and most adopt a give-and-take approach. “But
how far you can take price negotiations. If you
over the past eight years I have definitely seen
have a counterpart who is likeminded, you can
an upward trend towards some groups dictating
have an open discussion and work through it,”
rebate percentages without regard for what can be
he says.
HT 850
asking for. As a manufacturer, depending on which
sustained,” he notes.
“I have come across buyers that shoot for a
Rob Lister, National Marketing Manager of Build
number because it sounds good, but can the
• Combination planer / thicknesser provides a 2-in-1
machine to maximise work space
• Powerful 1.25kW Motor provides various cutting
applications
• Compact bench top design fits conveniently in small
shop environments
• Two high speed 210mm steel knives for precise,
smooth cuts
• Precision machined table top ensures a smooth,
straight cut
• Four metal wing feet ensures the machine will remain
stable whilst planing longer timber sections
• Precision adjustment knobs
• Compact design
Universal Combi
Machine
HK 600
it, points to the importance of transparency and
manufacturer afford it? Decisions should not be
consistency when it comes to suppliers negotiating
made either out of greed or fear; if a discussion is
rebates with retailers. “Suppliers need to be
designed to benefit both parties, then it is entirely
consistent and some of them aren’t. It doesn’t
possible to structure a good trade agreement,”
serve them to go in and out of the system; it would
says Weeden.
be far better if they were completely transparent.
Carike Pieters, Key Account Manager for
“We have a peer system in
place to protect ourselves
against unreasonable
demands, whereby we
expect higher sales in
return for higher rebates.
Most of our retailers are
loyal and don’t expect
extravagant rebates; for
our part, we don’t set
unreasonable targets. Most
of our retailers are open to
this concept.”
Eben van Zyl, General
Manager at Castor &
Ladder, comments:
performance, not relationship,”
“Looking at the
global tading
environment,
there will always
be a place for
rebates. It is
there to protect
margin and back
office staff”
– Eben van Zyl
Castor & Ladder
“Looking at the global
• A robust and accurate machine, designed
for both workshop and site use.
• Features a circular saw, shaper/router,
planer & thicknesser, mortising attachment
and a sawing and tenoning.
• 1.0 kW motor
• Weight net / gross: 44 / 47kg
• Overall dimensions:
840 x 635 x 475mm
Rebates should be offered depending on
Distribution at Sika, agrees;
he adds.
He readily agrees that it is fair
to relate the size of the rebate
to business volumes. Build it’s
approach is to make rebates
dependent on gross targets
that are set and negotiated
with each individual supplier on
an annual basis. “But when it
comes to rebate negotiations,
we have an even more onerous
task than a corporate in dealing
with a manufacturer because
each retailer is a separate legal
entity and is free to buy outside
of the Build it system. We have
to deal on behalf of the retailers,
trading environment, there will always be a place
but we don’t have the guarantee that they will buy.
for rebates. It is there to protect margin and back
And they only buy through our system if the landed
office staff,” he says, adding, “As a businessman I
cost prices are right,” he explains.
understand where they are coming from, because
“When they don’t buy through us though,
it is a way of protecting margins. If they don’t ask
and continue to buy from suppliers outside
for rebates, and they allow the invoice price to go
the system, they impact negatively on the
through to their traders, that margin could be lost in
group performance, which then ultimately
the form of discounts offered to customers.”
undermines the ability of the group to give more
However, he referred to a perception held by
back to the retailers. Our smaller retailers enjoy
some suppliers, in particular the smaller ones, that
Email: [email protected]
Websites - www.newcopowertools.co.za
buying power of some of the bigger stores, so
buying power to ‘put the squeeze’ on suppliers,
Tel: 011 315 1504
the upfront landed cost based on the huge
some of the bigger retailers are using their size and
from day one they enjoy the benefits of the
and are abusing a system that is meant to assist
collective group and the landed cost is the
both parties to make a fair profit.
same to everyone,” he says.
“In my view, rebates in the mid- to high-teens
The advantage for suppliers to enter rebate
can be difficult to justify,” says van Zyl. “Retailers
relationships with groups is that the head office
must remember that rebates are a real cost and
guarantees payment. Thus a supplier can deal with
they have to be built into the invoice price.”
all the stores, but a single invoice can be raised to
As the international economic crunch bites
collect their money from a number of stores.