Distributing Your Llamas

<body topmargin=0 leftmargin=0 marginheight=0 marginwidth=0> <table cellpadding=0 cellspacing=0 border=0><tr> <td valign="top" colspan=2 height=90 BGCOLOR="#006699" TEXT="#080000" bgproperties="fixed" background="133285a1erlcgo.png"> <div> <FONT SIZE="5" COLOR="#FFCC66" FACE="Arial" ><B>Highland Llamas</B></FONT><B>    </B><B> |     </B><A HREF="index.htm" TARGET="_top" TITLE="Highland Llamas"><B>home</B></A></div> <div> <A HREF="id61.htm" TARGET="_top" TITLE="Leveraging Your Marketing $ part one">Leveraging Your Marketing $ - part one</A>   |   <A HREF="id62.htm" TARGET="_top" TITLE="Leveraging Your Marketing $ part two">Leveraging Your Marketing $ - part two</A>   |   <B>Distributing Your Llamas</B>   |   <A HREF="id59.htm" TARGET="_top" TITLE="Advertising Today">Advertising Today</A>   |   <A HREF="id63.htm" TARGET="_top" TITLE="Making Your Advertising $ Count">Making Your Advertising $ Count</A>   |   <A HREF="id81.htm" TARGET="_top" TITLE="Promoting a Stud Before He Comes of Age">Promoting a Stud Before He Comes of Age</A>   |   <A HREF="id64.htm" TARGET="_top" TITLE="Farm Ranch Displays">Farm & Ranch Displays</A></div> <div> </div> </td> </tr><tr> <td valign="top" width=210 BGCOLOR="#FFCC66" TEXT="#080000" background="132d2c00dkelyh.png"> <bR> </td> <td valign="top" height=390 width="100%" BGCOLOR="#FFFFFF" TEXT="#080000"> <div> <I><B>Distributing Your Llamas</B></I></div> <div> <I><B>by Dan and Marilyn Milton</B></I></div> <bR> <DIV ALIGN="LEFT"></DIV> <div> <I><B>Our success in the marketplace is determined largely by how well we package our product or service and the methods we use to take that product or service to the buying public.</B></I></div> <bR> <div> Distribution, how we package and provide our goods and services, in what has become a very competitive marketplace, is the most important aspect of our business today.  To help realize the impact, we will contrast the methods used outside the Camelid industry with those used within the Camelid industry.  We will show how distribution methods have evolved and why it is important to understand how they relate to the dynamics of the buying public.  We will look at the methods that produce results and discuss why they work.  We will look at current trends in buying patterns and changes that are taking place.</div> <bR> <div> <B>Outside the Camelid Industry</B></div> <bR> <div> A revolution has taken place in America over the past 40 years -- a revolution in the methods of distributing good and services.  This revolution exploded in the 1990s.  Traditional methods have given way to those that satisfy the needs of today's buying public.  Distribution will be the key element to a store's survival today.  Let us take a look at how distribution has evolved.</div> <bR> <div> <FONT SIZE="3" COLOR="#000000" FACE="Symbol" >·</FONT>     <U>The individual shop</U> -- the corner market, corner drug store, the mom and pop sole proprietorship that has been the backbone of distributing goods and services in the United States and is still the backbone in many other countries.  Customers shop at an individual store for each different category of product needed (e.g., food, clothing, hardware, candy, bakery, butcher).</div> <bR> <div> <FONT SIZE="3" COLOR="#000000" FACE="Symbol" >·</FONT>     <U>The full-service store</U> -- a one-stop shopping store.  Customers purchase groceries, dry goods, hardware, meat and fish, drug items and other products at a single location.  Combines the functions of a group of mom and pop stores.  Customers need travel to only one location to buy what they need.  The full-service store is larger than the typical mom and pop and carries a much larger and varied inventory.  The trend is away from specialization and toward generalization -- necessitating a more impersonal service.</div> <bR> <div> <FONT SIZE="3" COLOR="#000000" FACE="Symbol" >·</FONT>     <U>Chain store</U> -- may take two forms; a chain of individual specialty stores (e.g., the Gap, Radio Shack) and a chain of full-service stores (e.g., K-Mart, Target).  The chain provides store identification with storewide policies on levels and type of service provided.  Some chains also have their own name products.  Provides multiple identified outlets within a geographic area.</div> <bR> <div> <FONT SIZE="3" COLOR="#000000" FACE="Symbol" >·</FONT>     <U>Strip or shopping mall</U> -- the strip mall came into being within the past 40 years.  A group of compatible stores got together in one location to provide their goods and services.  Strip malls are located convenient to where customers live; typically the suburbs.  Each strip mall tries to attract each of the types of stores that will allow customers to do all their shopping at that mall.  Providing one-stop convenience is an important goal of the strip mall.  Most individual stores or chains now locate in a strip mall.  It is the way that these individual stores can compete with the large multi-function full-service stores.  In recent years, with the prevalence of strip malls, the new ones being built, to be competitive, have turned to providing factory outlet stores to attract customers.  Attracting customers is the main function of the mall concept. </div> <bR> <div> <FONT SIZE="3" COLOR="#000000" FACE="Symbol" >·</FONT>     <U>"Mile-of-Cars"</U> -- a variation of the strip mall idea.  Various car dealers get together and locate along the same street in an area where real-estate prices are lower.  The idea is to attract the potential buyers to come to a specific location for whatever type or brand of car they desire.  Customers do not have to shop all over the city to find the car they want.  In practice, car dealers have found that locating adjacent to their competition in a "mile-of-cars" location has increased sales for all dealers.  The hardest job is not to sell a car, but to attract the buyer to come look.  The "mile-of-cars" concept attracts customers.</div> <bR> <div> <FONT SIZE="3" COLOR="#000000" FACE="Symbol" >·</FONT>     <U>Superstore</U> -- a very recent and successful innovation that takes a large chain store and expands it into a very large store that has an inventory of, for example, every brand of electronic device manufactured.  The object is to move a large inventory and allow products to be discounted -- to provide all possible choices to customers so that, whatever the needs, they will be satisfied.  Several book dealers have gone to this distribution approach, as have several electronics stores.  When we speak of size, these stores sometimes cover an entire city block.  </div> <bR> <div> <FONT SIZE="3" COLOR="#000000" FACE="Symbol" >·</FONT>     <U>Discount Warehouse</U> -- a variation of the superstore.  A very large outlet in a warehouse layout, typically requiring membership, providing discounts on products usually packaged in multiple quantities (e.g., Price Club, CostCo, Sams Warehouse).</div> <bR> <div> <FONT SIZE="3" COLOR="#000000" FACE="Symbol" >·</FONT>     <U>Auction</U> -- a specialty form of distribution that is used to sell items typically purchased by collectors (e.g., art, old cars, and antiques).  The object is to bring together a large selection of specialty items for customers' preview and purchase.  The object of the auction is to maximize the prices realized for the items by creating a competitive purchasing environment.</div> <bR> <div> These forms of distribution have evolved over the last 40 years, as competition for products and services has increased.  We have, as a buying public, moved from purchasing our goods and services from the local single owner store with personal service, on a friendly name basis, to purchasing from multi-function or strip mall stores where service is impersonal.  We have moved from being able to walk to our neighborhood store to having to drive from our housing development to the strip mall.  We have opted for the convenience of one-stop shopping.</div> <bR> <div> <B>Inside the Camelid Industry</B></div> <bR> <div> A revolution has also taken place inside the Camelid industry over the past 10-15 years that in some ways closely parallel that which has taken place outside the industry.  It is a revolution in the methods of selling our llamas and alpacas and in providing our services.  This revolution expanded in the 1990s as we looked at other methods to be competitive.  The traditional method of selling off the ranch is being augmented by other methods to satisfy the increasing demands of today's buying public.  Let us take a look at some distribution methods currently in use.  As you do so, let the creative juices flow because your success in today's market will depend on how innovative you can become to attract and get potential customers to purchase from you.</div> <bR> <div> <FONT SIZE="3" COLOR="#000000" FACE="Symbol" >·</FONT>     <U>Individual ranch</U> -- this has been, and still is, the backbone of how we distribute those llamas and alpacas we have for sale and the services we provide.  The owners usually do the showing and sale of animals.  The individual ranch is compared to the individual store that provides personalized service on a name basis with customers.  The main advantage to potential customers is that individual ranches spend time with their customers, especially if they are new, to help them learn.  The disadvantage for the customer is that most individual ranches do not have a large selection of available animals so the customer must travel to several locations to find what he/she is looking for.  It is also hard for the customer to do any comparison shopping because of the time involved in going to multiple ranches in diverse locations.  In many cases customers will settle for an animal that may not fit what they are looking for in their breeding program because of the time involved or their lack of experience.  When visiting an owner's ranch the potential buyer may see, in person, the owner's breeding program, the sire and dam of the animal the buyer may be interested in and other relatives or offspring.</div> <bR> <div> <FONT SIZE="3" COLOR="#000000" FACE="Symbol" >·</FONT>     <U>Large ranch</U> -- a variation of the individual ranch that provides personalized service with a large supply of animals for sale (e.g., 50 or more).  In many cases the showing of animals and the sales effort is handle by a ranch manager and not the owner.  The advantage to the buyer is that they have a much larger selection to choose from.  The large ranch is compared to the full-service store or in some cases to the superstore (e.g., Meadow Wood Farms).  Large ranches sell their animals off the ranch, using the following methods:</div> <bR> <div> -     Private treaty, throughout the year.</div> <bR> <div> -     Production sale, usually once a year or every 2-3 years, by auction or private treaty.</div> <bR> <div> <FONT SIZE="3" COLOR="#000000" FACE="Symbol" >·</FONT>     <U>Bazaar</U> -- normally established by a local association to provide, once a year, an outlet for ranches that belong to the association.  The bazaar is usually a private treaty sale between the individual ranch, displaying animals for sale, and the potential buyer.  The bazaar may collect a percentage of the sale price from the sellers to cover the cost of putting on the bazaar.  In some cases a portion of each sale goes to a research fund.  Bazaars simulate the strip mall used in the retail industry.  The difference is that the bazaar is only a once a year event over a two-day period.  It provides many advantages to the potential buyer including the availability of a large number of animals for sale in one place that may be seen and handled, the ability to talk to the owners and learn first hand about the animals, and the ability to do comparison shopping and negotiate for specific animals that fill the buyers' requirements.  The buyer has the advantage of buying from an owner as if the buyer was buying off the owner's ranch without having to drive to a number of different ranches.  The disadvantage is that the potential buyer usually sees only one or two of what the owner has for sale and will have to settle for pictures of the sire and dam or related offspring.  One option a bazaar gives the potential buyer is the chance to meet many ranch owners in one place and decide which he/she would like to visit.  Sellers are member of the association putting on the bazaar and are usually from the local area.  Most buyers at bazaars are usually from the local area or region around where the bazaar is taking place.  Bazaars attract many new buyers. </div> <bR> <div> <FONT SIZE="3" COLOR="#000000" FACE="Symbol" >·</FONT>     <U>Auction</U> -- the auction is similar to the bazaar, in that a group of ranches brings a selection of their animals together at one place (usually their best representation), at one time, for sale.  Typically, commercial promoters get the consignments from owners, put together the facility, promote the sale, publish the catalog and put on the auction.  Sellers come from a large area -- usually most of North America.  Likewise, buyers also come from the same wide area.  Most advantages of the bazaar are also available to potential buyers at an auction.  Buyers may speak to the owners of displayed animals.  The potential buyers will see a large selection of animals that will probably satisfy the buyers' need.  The disadvantage is that purchasing is via the auction process and is competitive with other potential buyers who may also want the same animal.</div> <bR> <div> <FONT SIZE="3" COLOR="#000000" FACE="Symbol" >·</FONT>     <U>Cooperative groups</U> -- this closely equates to the "mile-of-cars" method of distribution.  Many groups around the country have banded together either formally or informally to cooperatively market and sell their animals.  This gives the individual ranch a much stronger pull to attract people to come to an area to look for animals.  If five or six ranches, in a fairly close geographic area get together, each with four or five animals for sale, there is a much greater supply to attract and satisfy the potential buyer.</div> <bR> <div> In today's competitive environment we must be aware of the various methods available to us to distribute the animals we are breeding for sale.  Most of us will continue to provide the more personal off the ranch sale of our stock.  In addition, most of us are also using or exploring the other methods; specifically the bazaar and the auction.  Each of these has advantages and disadvantages.  The bazaar will help move those animals desired by new buyers.  The auction helps us move those animals that help existing ranches upgrade their breeding stock.  We should take a close look at using the cooperative selling approach.  The important point is to find a small number of ranches willing to work together to help sell each other's animals.  Cutthroat competition is not a part of this approach.  If people work together they will usually achieve much more than they could alone.</div> <bR> <bR> </td> </tr></table></body>