ITASCA, Ill. -- Dave Deddens owns two 3-D Mart stores in rural Indiana, while Duane Shields has 10 Short Line Express Market stores in Las Vegas. The men are worlds apart, yet they come together at Sam's Club. Deddens stocks his vaults with Monster Energy drinks from Sam's for a simple reason: It's $10 per case cheaper than he can get from the beer distributor that delivers it.
Shields does a lot more than thatonce a week, he hires a truck and a crew to pick up an order one of his managers has faxed in. Tobacco, Gatorade, water; Sam's even brings in for Shields a product [image-nocss] it doesn't carry, AriZona Teas. With his stores spread wide across the Las Vegas market, the 60-mile round trip to pick up and deliver to them takes a full day.
At the second annual CSP State of the Independent Summit, the most-discussed issues were retailers buying inventory from club stores and how suppliers could best serve retailers who were not attached to large and powerful companies. The June 17 event featured research from General Mills and CSP Independent magazine, 13 retailers, 16 suppliers or brokers, and 2 distributors.
Shields said cost is the bottom line, what he saves in cost differential, as well as the $30,000 he gets in rebate checks by using his cash-back credit card for the purchases.
Francois Alvandi, owner of 25-site Big Daddy's Oil of Las Vegas, swears by the same practice. He said he never pays for travel because of all the credit-card mileage he's accumulated buying cigarettes from Costco.
The practice has reached a level that club stores now have retailer hours, deals and centers within their locations. Sam's Club, Bentonville, Ark., recently announced that it would open a Sam's Club Business Center in Houston expressly for commercial users. (Click here for CSP Daily News coverage.) Even Jim Biser, vice president of sales for distributor McLane Midwest, Danville, Ill., said, If they're close [to a club store], it makes sense. But a lot don't have one nearby.
As part of a CSP Independent readership survey conducted this spring, 200 respondents shared their views on why their favorite suppliers and distributors held that status. The respondents, largely from the Southeast and Midwest, said Sam's Club was their third-favorite supplier of goods, behind PepsiCo bottlers and distributor H.T. Hackney, Knoxville, Tenn.
Sample comments about Sam's Club included:
Supports my tobacco needs. Cheaper price. Variety and availability. Make buying easy. Products for resale, supplies and deli. Store open on weekends and long store hours. Have high in-stock ratio.The event featured breakout sessions on the organization of retail operations conducted by BP Convenience Retail America's Andrew Baird and Chevron's Paul Casadont. Each included franchisees and/or dealers from each company.
To read more about CSP's State of the Independent Summit, watch for the August issue of CSP magazine or the September issue of CSP Independent magazine.
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