A rack jobber is a vendor who rents space in a retail store or supermarket to display and sell products. Many rack jobbers are distributors, bringing in products from larger wholesale companies to sell in local stores. Others actually make or manufacture their own items and contract with store owners to allow them to use floor space. Conducting business in such a way is beneficial to both the rack jobber and the store owner, in that the jobber is able to expose his or her product to a wide customer base while the store owner gets to share profits without the burden of taking inventory or restocking items.
Before contracting with a retailer, a rack jobber generally conducts market research to try to predict if the store's regular customers will be interested in his or her goods. The jobber determines what quantities of items to stock and what percentage of profits should be given to the retailer. He or she likely will meet with the store owner or manager to negotiate contract terms and decide where to set up the items. As the job title implies, a rack jobber usually brings his or her own rack to display goods. A retailer may also be willing to allow the jobber to use store shelves if space is available.
Some rack jobbers work exclusively with one store or chain, while others do business with many retailers. A jobber visits stores regularly to check on inventory, create new displays, and restock items. It is important for the rack jobber to keep careful sales and inventory records to determine if he or she needs to adjust prices in order to make a profit.
Many people who manufacture their own products utilize rack jobbing as a way to get their businesses off the ground. By setting up displays in prominent grocery, hardware, or clothing stores, an independent rack jobber does not need to rent a building, advertise, or hire employees. Instead, the jobber is able to expose his or her products to a large number of potential customers and build profits before tackling the other elements of running a business.
A host store can benefit from working with rack jobbers as well. A manager does not have to worry about ordering, stocking, pricing, and selling a new product; the jobber handles it all. The store does not suffer a loss if a product does not sell. If the item is successful, however, the store is entitled to a cut of the profits for granting the jobber the right to use floor space.