Is JBT Screwing You?
If you don’t know…JBT (Jeweler’s Board of Trade); taken directly from their website say they provide, “Confidential credit reports and credit ratings on over 70,000 jewelry-related companies contained in our database are all thoroughly investigated and analyzed. So you know, for example, how well your business partners pay their bills, whether there have been collections placed with JBT, how long they have been in business, and what the principals’ backgrounds are.” What they don’t mention is how they go about giving your store a rating.
First off let me decode the rating system:
1. 4 = Slow payment. You generally do pay your bills but over 90 days on average
2. 3 = Fair payment. You pay your bills between 59-90 days
3. 2 = Good payment. You pay your bills between 30-59 days
4. 1 = Prompt payment. You pay your bills between 1-29 days
Now here’s what can happen that can change your rating even if you are rated #1. Let’s say a manufacturer puts out one claim on your store-that you owe an outstanding invoice-well your rating is not affected by just this one claim. A couple months later another manufacturer puts out a claim-well even if you are #1 that claim drops you one whole rating. Now let’s say you take care of the claim right away (even though JBT doesn’t send you an email blast or anything letting you know your rating has been adversely effected)-well JBT keeps that same rating on file for 7 months. So-you find out your rating is a 4 from a vendor nice enough to tell you something is wrong-you have to call JBT and give them new references-but this process of them correcting and verifying your rating could take more than a month and your still stuck with a 4.
Here’s the screwing part…JBT sent me a claim letter. In 2008 they said Guliani’s Fine Jewelry, Inc owed a company $1145. I had no idea who this company was and was not doing business with them in Charlotte. I further researched the company and found out when my folks left the business they owed this one outstanding invoice. I called my dad up-and after months he realized he did owe this company some money but it was more like $600. I contacted the company and made them go back thru all their invoices, exchanges, and returns throughout their long business relationship and they too found out that the balance was approximately $600. I sent them a check right away. Now-JBT doesn’t know I paid them because the company wasn’t nice enough to contact them. I had to contact JBT myself and for months had to let them know I paid the invoice with a copy of the check and a computer generated payment slip.
Who is to blame…JBT? I contacted JBT whom faxed me the so called “proof” of the $1145. A computer generated invoice showing the store address in FL, contact info, and a balance of $1145. How efficient really is your system?
Just to get this info I had contacted the person handling my account for over a month-my account rep was apparently changed and a young lady was kind enough to decode the rating system but could not answer any information about as to why JBT put outs claims with a manufactures computer generated invoice. I am awaiting a call from the head of the claim department and will let you know what he says tomorrow.
Have you contacted JBT lately to verify your info? Because of tough times many companies I have talked to have been paying their bills but 90 days or so later. Has your rating dropped due to economic times? Is JBT taking into consideration hard economic times?
Computer generated invoices-JBT-really is that enough for you all to send out a claim? Don’t you think a better system needs to be in place?
retailer commented:
Amused, my intent was not to belittle Shanu. She is green but clearly has a passion for the industry.
More pointedly, I think this discussion needs to be had behind closed doors with only retailers in attendance. Manufacturers are getting screwed because retailers agree to unhealthy terms (for them). The industry needs to change, but the rulebook needs to be consistent and simply defined. In the end, this is a retailer problem and as a group we need to do some soul searching.
inc commented:
We will not need the JBT if people pay on time, a very easy solution.
Amused commented:
retailer commented: "Finally Shanu, you may want to kill this blog. You are going on record each time you write as being severely partisan without consideration for the manufacturers."
retailer, you left out: spoiled and naive, too.
Another Frustrated Supplier commented:
Shanu: Please listen to our frustration. Terms and due dates are normally clearly listed on orders, invoices, and statements. These are the supporting documents the JBT is looking wants and uses. "Retailer" makes some good points. Example: My sales rep sold and delivered two pieces for a total of $2,500(wholesale)at a pre Christmas Trunk Show Dec 15, 2008. Terms: Net. The store rang the sales up on the customers' credit cards that night. We never got paid! After dozens of phone calls, monthly statements and several faxes and letters, the store refused to pay. Unbelievable. We finally turned them over to the JBT in late April. I still haven't gotten paid. This is why we need the JBT.
Shanu S. Guliani commented:
I think there is room for improvement on JBT’s side. More communication with the retailer and the vendor is necessary. Handshakes are a thing of the past–but still many of my vendors verbally agree to terms and then when money is tight they call day and night. One of them threatened to go to JBT for my store in Charlotte, NC. JBT wouldn’t know we agreed to X terms. I now have my retailers write the terms right onto the invoice–but does JBT ask for a copy of that…they go by computer generated invoices. Improvement is necessary.
retailer commented:
The customer cash argument is bs. There is shared risk that a product will sell - however a majority of the risk belongs with the retailer.
The best practice is to switch to a cash basis. There shouldn't be terms on special orders and certainly not on memo. Retailers know when a memo good moves so these should be paid immediately. It is sad to hear of special orders/memo vendors being strung out on these goods.
On massive stock orders, well that's another story. These terms should be more generous but the retailer should pay within terms or when the product is sold - whichever comes first. FYI Manufacturers, 30 days isn't enough. The average jewelry store only gets around 1-1.2 turn. Think 6 months - but that's a drop dead date.
Shanu, JBT isn't screwing you. they're not perfect, but they are not very different from DNB. Now, perhaps the vendor screwed you or you ignored the vendor's cries.
This business really needs to move back to a cash on the barrelhead basis if we are all to survive. Unfortunately, the recovery will be slower for manufacturers since retailers will need to choke down until cash avails itself.
Finally Shanu, you may want to kill this blog. You are going on record each time you write as being severely partisan without consideration for the manufacturers.
JJ commented:
If someone walks to a retail store to sell their unwanted jewelry they will pay him cash but the regular vendor can wait for his payment 9 months or maybe more.
Frustrated Supplier commented:
Who is "screwing" who? The JBT is an organization of supply side jewelery firms intended to help protect themselves. Stores are filing Chapter 11 all over the place to help "protect them from creditors." Who else is there to help JBT members in "protection from delinquent accounts receivable?" It's hard to believe that the $1,145 claim is the first you ever heard of these people. Besides, it's not right that your father "after months" realized he did owe the company money. Maybe the difference in amounts was in finance charges. The manufaturer had to pay his bank for the use of the money; why should you get it for free? Turning a claim over for collection is a last resort; after all other means have failed. We must submit proof that the claim is real. It costs us more money to have them try to collect. When are the retailers going to realize that manufactures are people too? We have obligations that we must meet. Since when is it OK to think that 90 days past due is ever acceptable. I'll bet that the over 90 days is after several months of extended dating, before the due date. I spend too much of my time trying to collect money that is from 2008 invoices, and with January 2009 dating, are now almost 9 months past due. Those extended terms are a thing of the past. Live up to your obligations, and claims won't be submitted. If you work with your vendors on a payment schedule, and stick to it, claims will never be filed.
gingeete commented:
Did the company to which your father owed money, ever call you? As a wholesaler, I would only issue a claim if all other communication failed. Lately, most of my retailers are struggling, and, through communication with them (which is mandatory) we agree to a less structured payment schedule. A claim isn't a bill or phone call requesting money. It indicates frustration with the retailer. After repeated attempts to be paid, it is a last resort. If there are claims from 2 different sources, they likely indicate a general lack of consideration for the manufacturer (or claimant.)
jack800 commented:
Maybe there is room for improvement in JBT’s system. It may not be perfect, but it is the only yardstick that comparatively ranks members of the jewelry industry.
As a manufacturer, I use JBT as an informational service, not a Decision Tool.
When reviewing a new account application, we routinely ask for references which we then check. We also ask your existing brands for credit and payment history. When the ‘live’ data doesn’t match the JBT rating we run a JBT credit check to see if there is a history of credit issues.
Our final decision incorporates all the data and is never based solely on the JBT rating.
For us, your bad JBT rating would not be a deal killer.
