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Vendors with Varoom KATIE MULDOON OK, you want great merchandise? If you guessed that step number one is hunting like the dickens to find something that's truly unusual, you got it. Stories abound about the lengths topnotch catalog merchandisers will go to unearth treasures that at least look like they aren't in everybody else's catalog. But beyond just pounding the pavement or jungle paths, there are some lesser spoken truths. What you need day in and day out is a vendor who not only delivers what he says he will — and when he says he will — but also alerts you first about the new goodies that are right for your catalog. How do you get one of these smart, savvy, helpful, on-your-team vendors? Yep, it always goes back to nurturing — being fair and honest. But these days it also means re-evaluating some of the vendor policies you most likely have had in place for a long, long time. Granted, if you're a big guy with huge demand, you can pretty much make your own rules. If you're a small company, you have fewer options. So what should every company, regardless of size, do to attract vendors with varoom? And what is “varoom,” anyway? Varoom, in this sense, is that quality in a vendor with a firecracker sort of character — the guy or gal who's hot with ideas to help your business. Varoom gives a vendor the class to be both fair and honest, treating you with old-fashioned professional courtesy. To get this kind of partnership, one that makes you and your company's business indispensable, you may need to rethink how we catalogers have done business in the past. We've always been good negotiators. Not content with just getting goods for the best cost, we've bargained for all and more of the following: * Advertising allowances and discounts They're percentages off the base price. Historically, catalogers have reasoned that their books are like magazines in that they provide “ads” for the products. * Backups When catalogers are allowed to place a small initial order with a guarantee that two to three times that number will be available to the book if it is needed. * Photographic allowances Dollar credits that catalogers use against the cost of actually shooting a photograph. * Rebates and co-op payments Partial refunds of purchases and co-op payments that usually are associated with particular promotions. * Forward-dating invoices When the cataloger doesn't pay for the goods until well after they actually arrive. * Anything else we could think of… Like extraordinarily lenient return policies and/or bending minimum order policies so catalogers could take fewer inventory risks. What I'm advocating for serious discussion is that we should banish this old way of thinking pretty much altogether. Whenever possible or advantageous to your vendor, forget advertising allowances, backups…everything in the aforementioned list. Simply go for the absolutely cheapest possible cost of goods. You gain several advantages this way: * You increase your margin, which does wonders for your bottom line. * Alternatively, you pass the savings on to your customer and maybe — just maybe — increase your response rate as a result, which also doesn't hurt the bottom line. * You save a lot of time haggling over a lot of different points. * Your vendor saves a lot of time haggling over what seems like a billion nitpicks to him, and he starts to think of your company as the one he most wants to do business with. Don't try this with a new vendor. Knowing what the “absolutely cheapest possible cost of goods” is depends on past experience. Renegotiate your cost at least every year. If your volume has gone up, expect the cost to go down. Don't accept that a lower cost per increasing quantities isn't possible. Negotiating is not going away completely. It's just going to be a lot more focused. One last point: Never just knock off a vendor because you found a cheaper source for something that vendor has been selling you for some time. Of course it's your job to get the lowest price possible, but give the original vendor plenty of notice that you may switch sources. Allow him the opportunity to meet or even beat the new source's price. If that doesn't work, then yes, you will have to move the business. What are some of the arguments you can use to convince a vendor to give you a great cost of goods, his expertise and loyalty — and not just sell everything possible to the truly huge, like Wal-Mart? * Image By and large, catalogs have superior images than most large-volume retailers. Even with retail that's not based on discounting, the overall feeling is one of ongoing sales and private retail brands. An appearance in your catalog enhances a vendor's product because your non-discount approach gives the product real value. * Advertising Because your catalog goes into thousands, or even millions of homes, it's a stylish advertisement…and one that literally gets into the hands of consumers the companies behind the products you offer want to impress. * Access to new customers Your targeting can bring new customers that a vendor may wish to target but has not yet been able to. * Cost of goods As hard as you negotiate, it's unlikely that your catalog's volume will generate the kind of ultra-low cost of goods that, say, a Wal-Mart can demand. But, though your volume is lower, the vendor's profit per order is higher . * Nice people Take care of your good vendors by doing the little extras. Remember their birthdays, take them out to lunch (and you pay), and send a handwritten note of thanks when it's earned. |
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