by David Brown
“A General is just as good or bad as the troops under his command make him” – General Douglas McArthur.
In the same way that a General depends on his soldiers to move forward, a jeweler’s success will rise and fall depending on his associates. Aside from staff and customers, the other human resource crucial to a business, which is often overlooked by storeowners, is the vendor – after all, without him there is no product to sell.
Vendor relationships are as varied as human emotions. Antagonism can often develop, caused by either party and it is easy to see your vendor as being on the other side of the fence. Yet despite any differences, you share a strong common bond – you both benefit from the sale of their product. From this perspective you can see each other, less as friendly adversaries and more as united partners.
So how can you make the relationship stronger?
- Make a commitment to your vendor. The more money you spend with them the more valuable you become and the more they will do for you in return. You know with your own business that the customers who spend the most with you get the best treatment. If you spend a little with each of thirty different suppliers, you can’t expect the same treatment as you would if you spent a lot with ten.
- Re-order your fast sellers. This is basic common sense for both you and your vendor. What is the cost of buying a new item? Is it the wholesale price? No. For you it’s: 1) the time you spend looking at the vendor’s product range, 2) the cost of traveling to jewelry shows, 3) the time spent setting up the item in your computer system, along with 4) your staff’s time spent creating a display area 5) your time to train your team on this new product or collection. For your vendor, it’s 1) the design and set up costs, and 2) the travel to retailers or jewelry shows. What is the cost to you both when you reorder that item? Ignoring freight and restocking, the only cost is an email and the price of the goods, and the same is true of your vendor. The profit comes for both of you when that item sells a second, third, fourth and fifth time. What’s more, the chances of an item selling again, when it has already sold once, is four times as great as a brand new item that you just bought.
- Pay your bills when they are due. Will a vendor show his best stock to the customer who meets his obligations or the one he has to hound for payment? I know what I would do.
So enough of keeping your end of the bargain. What more do you gain from all of this?
This is the best part! A retailer that has a strong relationship with a vendor will often find the vendor is able to do the following:
- Offer you their best price. Doors open when you commit to a vendor. Like anyone, they can offer better deals the more you spend, and it need not be an upfront payment. A promise to reach certain buying targets over an extended period will help you get the best price possible.
- Provide memo inventory. Certain vendors can only provide large quantities of this in a limited capacity, but almost all are able to send you some extra pieces around special promotional periods or to show special customers. Again, the ability to take advantage of this will depend on the how much they value your business and the extent to which you are prepared to reorder what sells. It is in both your interests to get good sellers back whether they are items you own or have on memo.
- Exchange slow moving inventory. Again, it’s in the interests of both of you to move out old items in order to make way for products that can sell several times over. The vendor can often on-sell this to another retailer. However there is no point in asking 18 months after you bought it and the market has changed. This product needs to move on while the vendor can still sell it.
- Sometimes the items you buy can be exclusive to you in your shopping area or town. You can also get first choice in new items when they are introduced to the range.
- Customer evenings. Your vendors will often provide you with extra product or specials for these special events and may even attend these events themselves with their full range of products.
As the good General also said, “we are not retreating – just advancing in a different direction.”