Manufacturers as ‘Retailers’

Does JCK consider it ethical for a vendor to sell wholesale at the JCK Shows and to market retail on the Web?

Leslie Haberer, Manager/Owner, Diamontrigue of Lubbock

Frank Dallahan responds:

Thanks for your question. I wish it were simple to answer. Unfortunately, today the distinctions among retail, wholesale, and manufacturing are blurring as never before. You need only to look at the “regional outlet malls” that have sprung up all over the country. It used to be that retailers in these “malls” were local entrepreneurs who bought closeouts and resold them. Today, well-known manufacturers such as Lenox, Waterford, and Ralph Lauren populate these shopping centers.

Jewelry is subject to the same pressures. Manufacturers will tell you their biggest problem is returned goods. Financial realities today put enormous pressure on all manufacturers to quickly dispose of goods that do not sell. They can no longer put them into inventory and hope they will eventually be sold.

Jewelers confronted with a local manufacturer or wholesaler who decides to go into the “retail” business face a difficult situation. The jeweler’s credibility is put at risk by unfavorable price comparisons. Your options are really limited, but strategically, you cannot appear to consumers to be “overcharging.” You have to carefully shop the “offending” wholesaler to make sure you absolutely differentiate your product offering from his. For similar items you believe you must keep in your assortment, I’d take a smaller markup. The key tactic is to position your store in the local marketplace as different – better, but also value-oriented.

In an absolute sense, such competition isn’t right, but effectively you can’t do anything to address it except merchandise away from it and position your store differently.

Frank Dallahan, Executive Director, Trade Relations, JCK

Correction

A photograph of the Forest Series of boxes from Rocket in the article “Using Packaging to Sell Your Store” (JCK, September 1998, p. 88) inadvertently was flopped; the accompanying caption contained an incorrect telephone number for the company. The correct number is (800) 762-5521.