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The difference between buyers and merchants

buyers vs merchants

Throughout my career in the produce industry, I’ve been blessed to be exposed to many different perspectives.

As a jobber with a small wholesale company, I learned a great deal about produce from the terminal market in Detroit.

I worked for several notable retailers, both privately held regional chains and a publicly held national/international chain.

I also worked for exceptional grower-shippers who exposed me to another side of the industry.

Each of these experiences helped me gain perspective on how to effectively promote fresh fruits and vegetables and enabled me to draw distinctions between decision makers throughout the supply chain.

Two terms that get used interchangeably in the industry are buyers and merchants. Sam Walton was the gold standard when it comes to merchants. In fact, at one time, a prevalent expression applied to everyone at Walmart was “We are merchants first.”

I think Sam would have been an outstanding produce individual had he not began as a general merchandise purveyor first, because being a merchant is critical to maximizing the sales potential of fresh fruits and vegetables.

But it’s often the case that buyers are in the primary decision-making roles. This, in and of itself, is not a bad thing. But I would suggest that many opportunities to maximize sales are never realized because of the orientation of the person making the decisions.

And from a supplier perspective, knowing whether you’re dealing with buyers or merchants can help tailor offerings to accomplish their goals.

Following are a few characteristics to differentiate the goals of each:

• Buyers make money off the buy, so they’re always pressuring costs; merchants make money off the sell, so they’re always pushing for sales.
• Buyers are rewarded for maximizing gross margins; merchants are rewarded for maximizing sales.
• Buyers focus on getting product to the distribution center; merchants focus on getting product to the consumer.
• Buyers have a developed financial background; merchants have a developed operations background.
• Buyers are valued for their degrees; merchants are valued for their experience.
• Buyers focus on how long they can keep product to control shrink; merchants focus on how fast they can sell product to control shrink.
• Buyers are disconnected from product location and pricing; merchants are responsible for product location and pricing.
• Buyers defer to marketing for signage, product information, and product use; merchants are fully involved with marketing and communication to the customer.
• Buyers see themselves as the customer of suppliers; merchants want both themselves AND their suppliers see the consumer as their customer.
• Buyers tend to dictate; merchants tend to collaborate.
• Buyers are intellects; merchants are artists.

Throughout my career, I’ve observed decision makers manifesting traits of both buyers and merchants, but just as a dominant gene will determine the color of a person’s eyes, the dominate orientation of decision makers, be they buyers or merchants, will influence how they approach transactional activity.

Both approaches can produce good results, particularly when considering the type of product. Yet general merchandise and dry grocery usually lend themselves better to a buyer approach, while fresh foods and perishable items lend themselves more effectively to a merchant approach.

Recognizing these distinctions will always help facilitate the outcome of the sales, procurement, and distribution of fresh produce.


Bruce Peterson is the founder and president of Peterson Insights, Inc., a consulting company specializing in the complex challenges of the fresh food industry. Peterson began his career bagging groceries, and went on to work for several supermarket chains, including 17 years at Walmart Stores, Inc. He has owned and operated a wholesale produce company and served as chief executive officer of both Naturipe Foods LLC and Bland Farms.