Fewer Reps: Part III

Jewelers are over-inventoried in the wrong things. Stands to reason, doesn’t it? 

I mean, the difficult economy has revealed many things, but most notably that jewelers are over-inventoried. We all…EVERYONE IN THE JEWELRY INDUSTRY…knew that to be the case, but didn’t really concern ourselves much with it because up until 18-24 months ago the jewelry business was humming along as usual:

Vendors were selling, reps were selling, and jewelers were selling…and buying. Then everything came to a screeching halt because jewelers stopped buying…and selling.

Once they sold all their good sellers, the cash register wasn’t ringing enough to justify replenishing them when they still were sitting on too much inventory (the wrong stuff).

Jewelers have now had the chance to pare down vendor lists and stop buying inventory based on fads, feelings, and friends.

• FADS: Seeing something new, being told it is hot, and jumping in without knowing the depth.
• FEELINGS: Following a gut-hunch, an instinct because it has worked before…..well…..sometimes.
• FRIENDS: Buying from a company because someone you know and like has gone to work for them.

While there are other reasons jewelers buy, they have bought on these three for decades, maybe centuries. When leaned on individually, collectively, or primarily for buying, each of these can be very harmful to a jeweler’s bottom line and ability to manage business.

I will say that I have been party to the "Friends" part. Not only have jewelers bought from me again because of a friendship and previous experience, but I have sold on that as well.  Look, it is most easy for reps to go back to the jewelers with whom they’ve had relationships when representing a new line. It is the path of least resistance and a path vendors have come to rely upon.

Mentioned in my previous blog was the fact that almost every vendor asks a prospective new rep for his/her account list. Why do they do that? Because they think the rep will have an ‘in’ with those jewelers and be more likely to sell them sooner because of it. 

It cuts both ways, by the way. Some jewelers get tired of reps changing the companies they represent because they:

• lose continuity with the company the rep just left
• feel like they need to add yet another vendor
• wonder if this will be the line that works (turns, is profitable, and has proper customer service)
• hope this will be the company the rep finally stays with.

Most reps take on a new line or join a new company because somehow the vendor they are leaving has not fulfilled its promises, whether to them or to their jewelers. Bad reps, of course, have other reasons for taking on a new line.

Still, vendors and reps alike believe their quickest and most profitable path to business is to go after the jewelers the rep has had a relationship with. And that has been a true path most of the time over the years.  Just ask Abe Sherman of Balance to Buy. Ask Abe how many jewelers’ vendor lists and inventories have swelled over the years because of relationships and not sound business and inventory management practices. He will be eager to tell you, because he knows.

Being a former retailer, Abe knows how the industry has worked and how the game has been played—by all of us.  He knows that we buy from and sell to people we like. It’s human nature. And I have practiced it and benefitted from it myself over the years.

Has that practice stopped now because of the pinch the industry is in? Will it pick back up again? Once the economy stablizes and cash registers ring regularly, will jewelers buy from reps because they like them and because they have a longstanding relationship with them?

Maybe. Maybe not. Jewelers may not have the choice because maybe the rep(s) they have worked with can no longer afford to be in the jewelry business. Or maybe their favorite rep has been downsized, fired, or simply let go. Or maybe their rep has found another company to represent.

Will the jeweler buy? Maybe. Maybe not. But let’s hope all of us have learned some things over these past two years of struggle. 

• Let’s hope vendors realize they have to plan for hard times and take longer term approaches to their business relationships—both with jewelers and their reps—and not just the "satisfaction" from the transaction-of-the-moment.
• Let’s hope good reps can stay with good companies or good companies can find them; that they will sell on the merits and value their company has to offer; and they can build longstanding business relationships because of those merits and values.
• Let’s hope good jewelers can have frank, honest, and open discussions with their staff, reps, and vendors as to what consitiutes a good, sound, profitable business relationship and make decisions accordingly.

Finally, if vendors, reps, or jewelers want to peer through a telescope to see where the industry is headed and how it will get there, one place to look is www.balancetobuy.com …..and there are others who are willing to tell it like it is.