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October 1999

Managing: Your Credit Rating

JBT Live

What is the Jewelers Board of Trade and why should jewelers care?

The Jewelers Board of Trade was founded in 1884 to serve as a credit– reporting service for manufacturers and wholesalers to learn which jewelry companies were financially secure. They wanted to be sure the retailers with whom they did business could be trusted with valuable goods and would honor their debt obligations.

Today, as a retailer, you may think JBT is still only for manufacturers and wholesalers and really has nothing to do with you or your business. But there are good reasons why a retailer may want to consider membership, says Nathaniel C. Earle, president of JBT (see box on next page). Even if you aren't a member, recent changes and improvements make it all the more important you know what JBT does.

The Facts

First and foremost, JBT is a credit– reporting service offering members access to 38,000 current credit reports (on retailers and manufacturers) in the U.S., Canada, Puerto Rico and the U.S. Virgin Islands. The annual membership fee of $740 includes two Confidential Reference Books (referred to as the Red Book, published in March and September) for quick name, address, phone, business description and rating reference on each company listed. The rating reference is derived from
information provided to JBT by companies that receive a questionnaire annually. Based on the rating, the member can order a full credit report, which provides a wealth of information about the company.

The annual fee includes weekly confidential service bulletins that update the confidential ratings contained in the Red Book. It also includes 25 credit reports annually. Additional credit reports are only $7 each for U.S. and Canadian members, $11.50 for foreign members.

The Red Book is available now on CD– ROM also. It allows for more flexible searches by name, telephone number, address, rating or type of business. The CD version is available for an additional $60.

JBT also offers Continuous Service Automatic Updates for an annual fee of $25. With this service, once you order a credit report on a company, you receive all updated versions of the credit report on that company for the next 12 months, eliminating the need to order additional reports later in the year.

The collection department performs a major function of the JBT and recently underwent some changes to become more efficient, less expensive to use and more successful in collecting over– due accounts. Because JBT is a not– for– profit association, its collection fees are very competitive. About one third of JBT's 3,200 members use this service.

For an annual fee of $200, you also can receive JBT's Bankruptcy Report and New Claims Report. The Bankruptcy Report lists key developments in industry cases filed with the U.S. Bankruptcy Court. The New Claims Report lists all claims placed with JBT's collection department in the previous week. Both reports are faxed to subscribing members every weekend so they can learn even more quickly about companies that are slow to pay their bills: a plus if you're trying to retrieve money owed you, but a real minus if you are the slow payer and your debt is turned over to JBT.

Providing Information to JBT

From a reporting viewpoint, JBT offers every retailer a chance to present its business profile to the entire manufacturing and supply side of the jewelry industry. While not every jeweler feels comfortable sharing sensitive financial information, if you do, you should report as fully and accurately as possible to enhance your ability to to get credit and get it at the best terms.

"The information a retailer provides to JBT is one of the best ways for him to tell his story to the industry," says Earle. The more information provided, the better able JBT will be to present the most accurate picture of your company and its creditworthiness to the thousands of manufacturers and wholesalers with whom you'd like to do business.

Should A Retailer Join JBT?

"There are good reasons why a retailer should consider membership in the JBT," says President Nathaniel C. Earle.

As a jewelry retailer, you're not likely to extend credit back up the chain of distribution. However, there are other reasons you may need to know the financial stability of your suppliers. For example, when planning inventory, advertising, catalogs, in– store displays, promotional events and direct mail campaigns, you make certain purchasing decisions involving immediate and future orders. You need to know the product you're marketing will arrive when you need it and that you'll be able to replenish stock as needed.

You can lose a lot of time and money if you develop brand– name recognition in a company that's on the verge of going out of business or can't manage its own bills in a timely manner.

In an industry where you need to know as much as you can about your supplier as well as your customer, membership in JBT can be a valuable tool.

Copyright © 1999 by Bond Communications.


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