Viva la Vendor
Undeniably, satisfied customers are vital to any store—a message you’ll hear at nearly every trade show seminar you attend. So jewelers at the recent American Gem Society Conclave may have been surprised when a speaker, Minnesota jeweler Mark Moeller, forcefully asserted that there’s someone else just as important as that proverbial happy customer—someone who can also make or break your business. That someone is the vendor.
Moeller runs two impressive stores that ring up $6.4 million in annual sales (on an inventory of a mere $1.7 million!), and he attributes a large part of that enviable performance to good vendor relationships. Sure, the primary role of all your vendors is to supply you with goods that sell. But they can help you in so many other ways that it’s almost a retailing sin not to cultivate them. Consider:
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Vendors are excellent merchandising consultants. Their salesmen attend the major shows and visit scores if not hundreds of stores. This enables them to serve as walking seismographs of consumer taste—they’re among the first in the industry to realize what’s becoming popular or passé. They can also keep you updated on what successful stores are doing in the way of advertising, promotion, and product display.
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Quality problems plague retail jewelers year round; even the best manufacturers slip up occasionally. Store owners who have established strong relationships with their vendors invariably get the fastest response to complaints and have the best leverage on returns.
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Suppliers can be critical in helping with inventory control. Moeller has found that the just-in-time delivery prevalent in Japanese and American industry is directly applicable to his jewelry stores. It works wonders for profit margins, but it will never happen without smooth relations with suppliers.
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You get financial support. Suppliers who know and trust you are willing to help you in tough times and to negotiate favorable terms in good times. If you’re having cash flow problems, a good vendor will work out a lenient schedule of payments.
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When a customer wants a particular piece of customized jewelry, you can pick up the phone and call that friendly vendor. He’ll bend over backward to fulfill the order, and do so promptly.
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When suppliers are designers with their own lines, they not only will help you display the goods but also will leap behind the counter to sell them. Imagine the enthusiasm they’ll bring to the customer presentation. “When I have designers in, my sales soar,” observes Sissy Jones, owner of the famous Log Cabin store in Arkansas.
Curiously, many jewelers take a hard-nosed attitude toward their suppliers. If an item hasn’t sold in a few months, they’ll demand the entire lot be taken back immediately. When salesmen call, they’ll force them to wait and then will assume a casual, offhand manner when they examine their lines. Relations even become adversarial.
Then there are jewelers like Moeller and Jones who make vendors feel as if they’re partners in their businesses. “It gives them an interest in your success,” says Jones. If the sheer number of vendors you deal with makes this sound impractical, Moeller has some advice: Reduce the number of suppliers you use, concentrating your business with as few as possible. Moeller was stunned a couple years ago when a records analysis revealed he was buying from 43 diamond dealers. Today he buys from eight, and you can bet each of them strives to keep him happy.
So, yes, keep those important customers so satisfied that they return again and again. But don’t forget the second half of the success equation: Keep your vendors so happy to do business with you that they become your silent partners. The approach works brilliantly for jewelers like Mark Moeller and Sissy Jones. There’s no reason it can’t work for you, too.