How do I find out which supplier carries a massage supply store’s best-selling lotions?
Run a sales report to identify the top lotions, then match each one to its purchase orders and supplier. Ask whether the store has an exclusive or special arrangement, and whether that supplier would continue with you. Be specific about what you need.
Begin with the numbers. Ask for sales by product for a full year and pick out the lotions and oils that sell most. Next, find the purchase orders and invoices for those items. This tells you who supplies them, how often the store orders and what it pays. Look for differences between the two records, which may show unrecorded or side arrangements.
Then ask about the relationship. Does the store have an exclusive territory, a volume discount or a private-label arrangement? Are these written down, or based on a handshake with a sales representative? A friendly relationship with one rep may not carry over to you, so ask whether the supplier knows a sale is possible.
Think about risk as well. If a top-selling lotion comes from one source, find out whether alternatives exist and how quickly the store could switch. Ask the seller to introduce you to the supplier during due diligence. Your lawyer can check any supply agreement for transfer terms, and your accountant can confirm the margins on these products. Look at price history too. A supplier who raised prices several times, or who has changed its products, tells you something about how stable these sales are. Keep a list of the top items and their sources so you can follow up after closing.
Key takeaways
- Match top-selling items to purchase orders and suppliers.
- Ask whether any pricing or exclusivity is in writing.
- Find out whether the supplier would continue with you.
- Look for a second source for key products.
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Sources
This answer is checked against primary sources. Links were last confirmed on the dates shown.
- 01Business Development Bank of CanadaGovernmentHow to diversify your supply chain
- 02Business Development Bank of CanadaGovernmentWhat is inventory
- 03Business Development Bank of CanadaGovernmentHow to conduct due diligence when buying a business
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