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Competing Against the Customer

Carole Sloan -- Home Textiles Today, November 26, 2007

It looks like we're in for another, even more vicious round of import activities — aka the buying divisions of major retailers vs. the same companies' ever-growing import divisions.

What it basically is doing is pitting the vendors — many award winners for performance at the specific retailers — against the retailers' own import operations. The vendors are assured of one thing — the first opening order. After that, all bets are off if the import divisions can present a semblance of a competitive bid — often achieved by shopping the facility used by the original vendor.

The latter import divisions are profit centers that tack a specific profit margin on top of their import merchandise and then sell it to the buying divisions. The gobbledygook palaver of these retailers calls the transactions by other names, but basically that's what they are.

What is making this scenario more interesting these days are the current macroeconomic conditions combined with the tightening noose at retail for higher margins, more vendor participation in buying goods, and a return policy of unsold goods from other vendors that all makes one wonder what fantasy excursion we're living through.

Then there are the financial do-se-do's that would make the most sophisticated Wall Streeter beam with admiration.

With the home textiles marketplace in a critical stage, the accounting maneuvers are becoming even more creative. This column reserves the right not to discuss some of them, in order not to encourage less creative retail accounting departments to emulate them.

Talking with a number of key players on the supplier side, one wonders what happened to the now very old-fashioned term "partnership" that existed between buyer and seller. In fact, I remember a host of mentors on the seller side that definitely helped this neophyte buyer to learn the market.

Once again I must ask: "Who eats it?"

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