A rack jobber is a vendor who rents space to display and sell products in a retail store or supermarket. Many rack jobbers also act as distributors, bringing products in from larger wholesalers to sell in local stores. Others create or manufacture their own products and work out a deal with store owners to use their space. Both the rack jobber and the store owner benefit from this method of doing business because the jobber is able to expose his or her product to a large customer base while the store owner is able to share profits without having to take inventory or restock items.
A rack jobber usually conducts market research before signing a contract with a retailer to see if the store’s regular customers will be interested in his or her goods. The jobber decides how much inventory to keep on hand and what percentage of profits should go to the retailer. He or she will most likely meet with the store owner or manager to discuss contract terms and determine where the items will be displayed. A rack jobber, as the job title suggests, usually brings his or her own rack to display goods. If space is available, a retailer might be willing to let the jobber use store shelves.
Some rack jobbers only work with one store or chain, while others work with a variety of retailers. A jobber checks inventory, creates new displays, and restocks items on a regular basis. The rack jobber must keep meticulous sales and inventory records in order to determine whether or not he or she needs to adjust prices in order to make a profit.
Rack jobbing is a common way for people who manufacture their own products to get their businesses off the ground. An independent rack jobber can avoid renting a building, advertising, or hiring employees setting up displays in prominent grocery, hardware, or clothing stores. Instead, before tackling the other aspects of running a business, the jobber can expose his or her products to a large number of potential customers and build profits.
Working with rack jobbers can also benefit a host store. The jobber takes care of ordering, stocking, pricing, and selling a new product, so the manager doesn’t have to. If a product does not sell, the store does not lose money. If the item is a success, the store is entitled to a portion of the profits in exchange for allowing the jobber to use floor space.