The rottenest retailer

While some of the fun may have gone out of the schmutta business, there is still plenty of not-fun left. Picture this. A garment supplier presents his range to a retail chain buyer who grudgingly compliments him on its quality, price and fashion content.

The supplier is asked by the buyer to leave the 40 samples for few days while she assorts her order.
This buyer is in her 20s, has a marketing degree, some retail sales experience but none in business until she joined the buying office where she was catapulted into the position of buyer because she made the right noises about fashion.

As to understanding the buying process and establishing profitable relationships with suppliers, that would be all taken care of by computer models and printouts, forecasts, reports from the stores, advice from accountants and a whopping open-to-buy that handed her the magic buying stick.

When she held the stick aloft, every supplier went into raptures over her intelligence, beauty, wit and utter reasonableness in every request she made. Understandably, this not only made her arrogant but dangerous to the store and suppliers alike.

Back to our supplier and his samples. Days went by while he waited for the promised orders. After a week, and wanting to show the samples to somebody else, he asked for them to be returned – presumably with the orders to follow.

When the 40 samples arrived back in his office, nine of the knitwear styles had the entire backs cut out of them. This was so the buyer could hand on the knit construction to a more favoured and fawning supplier – to whom she gave the order.

The supplier was furious and went right up the tree to the top to complain about this treatment. The manager did a “tut tut, I must speak to her about that”, and lost interest in the matter.

If you think I’ve made this up, you’re wrong. If anybody wants to challenge me I’ll name the store and the buyer.

2010 - year of the log jamb

Every year, importers get a nasty surprise when Chinese New Year comes along. Retailers get an even nastier surprise when it affects their deliveries, especially those where they demanded last-minute changes, not realising Chinese factories love an excuse not to deliver close to Chinese New Year.

This year the starting date is 14 February, but the factories are shut down some days before that to clean up, ready for annual maintenance and repair.

This year the last vessel to leave China will be on 12 February. By that time the factories will have stopped producing and the workers will buy their tickets home – which can be anywhere in the world.

Start-back is not as clear-cut. Employers are tolerant of late returners, so the factories don’t really get cranked upuntil first week of March.

Young retail buyers, whose education may have not included the study of Chinese New Year, can get very angry at these factory people sloping off and mucking up their deliveries.

And this year has been especially bad because the factories were nervous after the cancellations brought about by the economic downturn, and took every order they could get in the belief some of them would fall over. Now the opposite has happened and new year has placed a dam across the production river.

Towards the end of the first quarter of this year the situation will ease and might get back to normal but there’ll be plenty of screaming in February and March when winter deliveries will be desperately wanted by the stores – even though we all know it will still be hot in Australia and nobody will want to wear winter gear even if they do buy it.

Some suppliers, in trying to appease their retail customers, will airfreight goods in order to meet delivery dates. Retailers who demand this ought to know their supplier will say goodbye to any profit when he lands goods by air freight.

The rest of 2010 is highly uncertain. If the US does recover, its buyers will be weighing in to Chinese factories and gobbling up production as they did a couple of years ago. Europe ran down its stock levels in 2009 and will keep the factories busy in the first half of 2010 building up again. In both the above cases, Australia’s place is well back in the queue, which means it’s vital buyers from here, whether wholesalers or retailers, put some effort into strengthening ties to Chinese factories.

Too often the economic purists are heeded when they trot out the mechanics of supply and demand. But that’s only part of it. Factories in China are run by people, with peoples’ likes and dislikes, where loyalty and trust is worth something.