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August 1999

Managing:Supplier Relationships

The Two-Way Street of Supply

Don't be shy about protecting your store in retailer/vendor partnerships. But don't overlook your vendor's concerns either

When it comes to jewelers' relationships with suppliers, a good offense is your best defense. Elizabeth Parker of Curt Parker Inc., St. Louis, MO, practices this philosophy in dealing with her suppliers while remaining sensitive to their needs.

Parker shared the following tips with other jewelers during a seminar organized by Charlotte Preston Catalysts, White Bear Lake, MN, at the JCK International Jewelry Show in June in Las Vegas, NV.

What Jewelers Should Ask For

  • Will suppliers agree to fast-pay terms? It always pays to ask suppliers for a 10% discount if you're willing to prepay or agree to other fast-pay terms, she said. This helps the supplier with cash flow, and the savings you accrue, even if you have to pay from a bank line of credit, will be worth it to your bottom line. If suppliers won't give a full 10%, they may agree to a smaller discount or other perks that could save you money. "If you don't ask, you'll never know what you might have been able to negotiate," she said.
  • Is the supplier dependable? Try to obtain a promise from a new supplier that it won't renege on your order to satisfy a bigger customer. Parker cited a case in which she bought a line from a new supplier at a show last year. The supplier promised to deliver the line to her in time for a special promotion in September. When the deadline passed, she learned the supplier had given an exclusive on the line to a bigger competitor in the same area.
  • Is it easy to do business with the supplier? Reordering should be a simple task, preferably on-line or through another easy system.
  • Will communication about your order be simple? Parker said picture orders are a great way to simplify communication. Many suppliers now use order confirmation forms that include a photo and stock number of each piece you order. This is particularly handy when dealing with overseas suppliers, where misunderstandings are more common. Some tech-savvy suppliers can even e-mail merchandise photos with a follow-up order-confirmation message.
  • Will exclusive agreements become a problem? Though they may seem terrific at the outset, these arrangements can backfire. Some exclusive lines will switch allegiance to a local competitor, even after you've sold the line well and built up name recognition for it in your area. You may be better off sticking with non-exclusive companies such as Stuller, which sells to any jewelry store that pays its bills, she said.
  • Will the supplier keep your business confidential? Be wary of suppliers that may gossip about your business. Ask for an agreement that your confidential business affairs won't become fodder for industry buzz.
  • Will the supplier treat you with respect? This seems like basic advice, but Parker has stopped doing business with several companies because of rudeness and an inability to remember who she is even after being a customer for years.
  • Will the supplier keep you updated on new products? "Nothing is more frustrating than opening up a consumer magazine and finding an advertisement for a brand new watch from one of your suppliers – and you've never seen it," she said.
  • How will the supplier deal with "tradebacks"? Get all agreements in writing about how and to what degree you can trade back unsold merchandise.

How to Improve Relations
You can take several actions to improve your relationship with vendors. Among those Parker suggests:

  • Always treat your suppliers with the same courtesy you expect from them. "If you're nice, you'll be treated well when you have problems," she said.
  • Communicate quickly and efficiently. Suppliers are busy, especially at trade shows, so rehearse a 30-second commercial about yourself that includes your store name, location, credit rating and what you're looking for. This will help the supplier deal quickly with your needs.
  • Go over merchandise you've received right away. Let the supplier know immediately about defective pieces or styles you didn't order so you can get a quick exchange. Don't wait and find out unpleasant surprises later, which could be harder then for a supplier to fix.

Suppliers on the Internet
The Internet is changing supplier-jeweler relationships, Parker acknowledged, especially in the case of suppliers selling direct to consumers on-line. Parker said her store's defense is a good offense. The Curt Parker Web site, which she and her husband, Curt, operate, is a well-organized, informational site that consumers praise as "not just trying to sell me something," she said.

Consumers tell the Parkers they learn from the site, which also links to popular consumer-information sites such as those operated by Jewelers of America, the American Gem Society and the American Gem Trade Association. Sometimes people want to buy based on what they see on-line, but more often, consumers end up visiting the Parkers' store instead.

Unless vendors are willing to open retail locations, they'll never have that asset, she said. Still, there many be types of jewelry that will be sold primarily on-line. "Jewelers have to face how Internet selling will change their inventory," she said. "We sell very little plain gold anymore – that's been taken over by Internet marketers and home shopping networks. You just have to get out of those parts of the business." But she says your presence on-line, especially if you have an informative site, will lead many on-line surfers to your bricks-and-mortar location when it comes time to buy an important piece.

– by Peggy Jo Donahue



Copyright © 1999 by Bond Communications.



 

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