Furniture frustrations: Time to pay the piper?
While CIT’s latest challenges may not be the straw heavy enough to break the camel’s back, it certainly seems to have the potential to put the darn dromedary in a corset.
And with CIT’s future still murky–and credit still tight as a tick–the added stress of an uncertain outcome certainly appears to have shortened the tempers of more than one vendor.
So much so that after having extended conversations with a a number suppliers last week, I am devoting this blog to a summary of the major gripes they shared with me.
In fact, this blog could very well be titled, What your best suppliers won’t tell you…at least not while on the record.’
For openers, most of the suppliers I chatted with last week said based on their behavior, lots of retailers have still not accepted that there is a credit crisis.
When I asked for proof, one supplier shot back with, “Are you kidding? Try and get them to pay an invoice in 30 days. Go ahead, I dare you.”
“It’s true,” argued another vendor. “Based on how they are paying bills, or should I say not paying their bills, retailers are acting like the vendors are making mega-margins,”
A third supplier was complaining that now that times are tougher than ever, some retailers are really playing by the golden rule. “They think that as long as they have any gold, they are making the rules.”
When I asked what he meant, he gave this example. “Say I ship a $10,000 order and $500 of that order is questioned for whatever reason. The retailer will just sit on the entire payment as a way to drag his heels.
One upholstery vendor said, “If you miss consecutive payments on your car, they will remove it from your driveway. If you miss your payment to your credit card company, you will pay late fees and finance charges. Why not here?
Good question, actually. Why not?
And since there is two sides to every story, I would encourage any retailer reading this to weigh in.
But please keep in mind that this is a time we should be working together to build bridges as opposed to blowing them up.
Ray Allegrezza commented:
As always, thank you all for your opinions.
As Mary said, we need to pull together in times such as these. That may mean that each side has to give a little. Hopefully, as an industry, if this happens, the business can be stronger.
motives commented:
Hey MILT Little sensitive are we... Read my response SOME of the Lousy REPs...Maybe you are a good one (based on your temper I doubt it) but there are way too many times the REP is NOT there to service the account when problems occur. Don't get off subject... this is about credit and the problems dealers are encountering. I pay my bills MILT! I own my building MILT and I"m a woman who did it on her own for the bast 22 years, MILT.. A respectable jewish man... you should be ashamed of yourself. Focus on the solution don't add to the problem. Whats your solution for the CIT problem? Sitting behind a computer calling names? My comment was the only one offering up a solution. I'll bet you voted for Obama and we he doesn't defend Isreal you'll be the first one crying!
Michael commented:
Mary nailed it! – Thank you for your comments. I love it when a manufacture/ rep tells a retailer how to sell with no real understanding of operations. (Previous comment: talking about turns and leaving out profit. It takes 21 Lifestyle beds to equal on 1 Lexington bed) I also love it when a retailer tells a manufacture how to schedule cuttings with no real understanding of their operations. (The old saying “you should have it when I order it.”) Ladies and gentlemen the world has changed and our industry has not! When I grew up I passed 4 furniture factories on my way to high school, now we call them warehouses. Here is the simple truth, we have to change - change our understanding of each other, internal systems, computer systems, cash flow methods, how rep’s operate, and frontend / backend operations regardless of what side of the fence you are on. It is no long the strong will survive; it is now "only the smart will survive!"
TTL commented:
Retailers should consider reorganize their floor and buying products that have higher turnover ratio. Buy from local factory that could deliver to you in days not weeks. Be important to your suppliers and ask for additional 15 days term. That should give you a better cash flow.
Mary Frye, HFIA commented:
Ray, I'm not sure you got what you asked for - the retailer's story. I think I hear explosions and see pieces of bridges flying through the air as I type this. How much energy and effort do we burn up arguing among ourselves? Can we afford to act like this? If we talked to and with one another instead of about one another or at one another, we might get somewhere. These are times for us to pull together not try to tear one another apart. Manufacturers, how would you respond if a retailer called and said, "I can't pay my entire invoice, but I can pay this much, and as I sell what I ordered from you, I expect to be able to have it paid by this date." Would you accept this offer or make a counter offer? Or would you start spreading the word that Retailer So-in-So must be failing because he can't pay me? Regarding the problem shipment, if the retailer paid all but the $500 in question, would you still have a sense of urgency about addressing the problem? Vendors, do you ever ship incomplete orders, with items that can't be sold until the balance of the order ships, and still expect to be paid as if your actions haven't impacted the retailers ability to sell your product? Retailers, do you respect your reps and their time? Do help them help you? Are you doing business with your suppliers and their reps in the way you'd like to have business done with you? Reps, are you part of the solution or are you part of the problem? All of you, would you like to have your actions broadcast to the industry? To your community? To your mother? We've got too much to do to waste time attacking one another. We are on the same team and pleasing customers and creating experiences so that they love doing business with us are goals for everyone on the team.
Michael commented:
Howard - Retailer are not the ones who took furniture to China! However, now, I cannot get casegoods in the U.S. because the EPA will not allow the level of finish that I sell to be produced in the U.S.
milt emold commented:
TO THE IDIOT THAT WROTE ABOUT LOUSY REPS:
WHAT A STUPID COMMENT ,LOOK WHATS HAPPENING TO THOMASVILLE THEY ARE REALLY GROWING THEIR BUSINESS, DA !! THE BIG DEALERS CANT PROCESS THE INVOICES FAST ENOUGH TO PAY UP FRONT.WHOS GOING TO TAKE CARE OF THE DEFECTS, AND OTHER PROBLEMS.WHOS GOING TO TRAIN YOU.
YES THERE ARE BAD REPS ,BUT THERE SURE ARE A TON OF GOOD ONES.
WE SHOULD GET RID OF SCHMUKS LIKE YOU, NOT THE REPS.
Motives commented:
How about eliminating some of the lousy sales reps and reducing the cost of the products. How about 3 % incentive to pay 50% before it ships and 50% in 10 days. How much does it cost the supplier to use CIT, BB&T and pay a sales rep?? I'll take the percentage they are getting combined and pay every invoice before it ships! Get rid of Dun & Brad street too they only report bad information
HOWARD BUTTENOFF commented:
THE RETAILERS SHOULD TRY TO HELP COMPANYS THAT STILL BUILD PRODUCT IN AMERICA AND THAT ARE AMERICAN OWNED . LET THE CHINESE,VIETNAMESE,FACTORIES AND THE FOREIGN OWNED COMPANYS WAIT FOR THE MONEY.AMERICANS SHOULD FAVOR AMERICANS.LET THE LIFESTYLES AND ASHLEYS AND CHROMECRAFTS OF OUR BUSINESS GO TO HELL!
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