Faire: A Vendor’s Perspective

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A Vendor’s Perspective

By Phil Wrzesinski, HABA

Remember when Amazon was going to destroy the brick and mortar shopping model? Spoiler alert: it didn’t. Amazon disrupted the retail model, but it didn’t destroy it. We learned to adapt.

Faire is that disrupter for the Sales Rep industry. It won’t destroy the Reps, but it will cause some pain. How much pain is dependent on how quickly and how well the toy industry adapts.

I know I may offend some with this article, but I want to share one vendor’s opinion on this topic and a glimpse at how vendors can adapt in a way that I believe causes the least amount of disruption to our reps, while providing the ultimate convenience to our retailers.

We’ll start with this premise: Faire is here to stay. Many of us hoped if we ignored them, Amazon would go away. Like Amazon, Faire has the financial backing and the strong inroads to lead me to believe they will be around for a long time.

We have been selling through Faire for over two years now. We didn’t seek them. They didn’t seek us. It was our retailers who asked us to be on the platform. We extensively researched the platform, talked to our reps, talked to our retailers, and made the decision to jump in. We went live July 1, 2019. The results were amazing! We had 16 orders including eight new customers in the first couple days.

There were several questions. Will we be undercutting our reps? Will we get qualified leads and the kind of retailers we want for our brand? How will it impact our current ecosystem?

I talked to several of my Principal Reps about these issues and realized there were two things at play – Terms and Commissions.

TERMS

Here are a couple things you need to understand. When Faire offers a retailer free freight, it is coming out of Faire’s pocket, not the vendor. Faire pays the freight. Same thing with their Net 60 terms. From a vendor’s perspective, this is a huge money-saver.

The first disruption is when those terms are better than what we vendors give the sales rep to offer.

We made the decision then to try to match our terms for our reps with what Faire offers as much as is possible. We also do not participate in any of Faire’s promotions or special deals. Instead, our best deals such as our ASTRA Show Special go to our sales reps.

Yes, Faire still runs its own promos and undercuts the reps from time-to-time, but we’ve found another way to protect our reps when that happens.

COMMISSIONS

Here is the real disrupter: money. Who gets it and what did they do to earn it?

Here is how Faire makes its money: through commissions. For every NEW retailer Faire brings me, they keep a hefty commission. For every reorder that retailer makes, Faire also takes commission.

But, if I have first already claimed that retailer as a HABA retailer, the commission is zero.

Faire does that because they want me to upload my customer base and claim them for zero commissions. Then Faire can sell those retailers all the other brands on the platform and gain commissions that way.

I have to say, it is a smart business plan.

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It is also a double-edged sword for our reps.

On one hand, if I zero-out the commissions through Faire, I can still pay my reps because I know most of them have been calling on those retailers and deserve to be paid for their effort. On the other hand, now all my retailers have been exposed to Faire and may start buying from other vendors who aren’t protecting their Reps.

MINDSET

Here is my mindset when I view Faire. Faire is simply an ordertaking platform, no different than the platforms many of our reps have built and no different than our own B2B platform we launched late last year. I’ll take orders any way the retailer wants to send them in – even on a napkin!

Like any vendor, I want to minimize my costs, therefore I have claimed all my retailers on Faire to zero-out the commission. My belief is that by now most of the retailers in this industry have already been exposed to Faire.

When I take the mindset that Faire is just an order-taking platform, then it is easy to justify paying commission to my reps who brought me those accounts in the first place. (Note: if you don’t think your reps deserve it because the order came through Faire, you don’t understand how retailers work.)

FAIRE IS IMPORTANT, BUT REPS ARE MORE IMPORTANT

Since we launched on Faire, that platform has brought us as many new retailers as all our reps combined. That is a huge number! We don’t offer any special promos or deals on Faire to get that business, either. Faire is important to my business.

At the same time, the new retailers our reps have brought us are buying three times as much as the ones from Faire. The sales reps are more important to my business.

See why I want to protect the sales reps?

MOVING FORWARD

In our two years, we have learned several ways vendors, retailers, and reps can use Faire in a way that protects the sales rep industry.

For vendors:

• Zero out your commissions to Faire by uploading all your retailers (we claimed the entire ASTRA list just so we could pay our reps for our best accounts). • Pay commission to the reps for all those accounts • Offer the same or better minimums/ terms for your reps as you do on Faire

For Retailers:

• Before you order from a new vendor on

Faire, see what their policies are towards your rep. • See if your sales rep can get you different terms • You can zero out the commission to Faire yourself either by going through the Faire link on the vendor’s website to place the order or asking the vendor to claim your business first before you order.

For Reps:

• Understand that Faire isn’t going to go away • Recognize that some of your retailers will prefer to order via Faire • Ask your vendors to provide you with new retailers they find through Faire and grasp them as leads • Work with your vendors so they know a better way to reward the hard work you are doing • Let your vendors know when you are working with new accounts (some may claim them on Faire just to protect your commission).

Finally, before the debate on Faire breaks down into individual situations, let me just put this out there: Yes, some individual vendors, reps, or retailers suck, but collectively we are all together and together we are good.

Just like with Amazon, the cream will rise to the top. The vendors, sales reps, and retailers that adapt to Faire the best will thrive. If there is one lesson we should have learned over the last decade, the sooner and better we adapt, the less disruptive it will be for the whole industry.

Faire helps retailers and vendors, but not as much, collectively, as sales reps do. Therefore, the vendors and retailers need to protect their most important asset – the sales reps.

That is the fair thing to do.

ASTRA

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