Bad Business

When we asked the JCK Retail Panel for tales of trouble with suppliers, we got back a harvest of horror stories. In fact, 55% of panelists said they’d had a “terrible experience” with a vendor. Asked if they’d ever deal with those suppliers again, 88.6% said “No.”

Below are some of the stories jewelers shared with JCK, plus tips on how retailers and suppliers can work together more harmoniously.

THE POWER OF NEGATIVE THINKING. A customer who purchased an engagement ring at Don Jenkins Jewelers in Lima, Ohio, returned six months later wanting a matching wedding band. Owner Christine Franklin called the vendor for an estimate and was told it would take four weeks to make the band. It took three months. Worse yet, it didn’t match the engagement ring. When Franklin complained, the manufacturer said the job “couldn’t be done.” Franklin had a matching wedding band made by another supplier and didn’t charge the customer.

WHEN TIME HAS NO MEANING. When Keith Rivenbark, owner of CMI Jewelry in Raleigh, N.C., was resizing a sapphire and diamond ring purchased for a client, the square-cut sapphire chipped. Rivenbark contacted the supplier, who said he could repair it in three weeks. Eight weeks later, the ring was still “on the way.” When it finally arrived, it hadn’t been repaired. The jeweler refunded the customer’s purchase price plus 15% “for her trouble” and stopped doing business with the vendor.

THE PERILS OF PREPAYING. At a jewelry show, an East Coast jeweler prepaid for merchandise that was to be shipped within three weeks. After three months, the store had received only a partial shipment. When the jeweler called to inquire about the order, he was told: “Why don’t you try paying your bills on time?” When he explained that he had prepaid, he was called a liar. After he faxed proof of the prepayment, the company said they’d ship the balance promptly. Six weeks later, the merchandise still hadn’t arrived. The jeweler called the vendor again and was told, “You’ll get [the merchandise] when I’m ready to send it! Get off my back!” It took four more weeks for the rest of the order to arrive.

THE PRICE IS WRONG. Continental Jewelers, Wilmington, Del., special-ordered a men’s gold bracelet at a price quoted by the vendor over the phone. The clasp was defective, so the jeweler sent it back to the manufacturer, who sent a new one priced $90 higher. “We were told that the gold price was higher and so we were being charged accordingly,” says owner Chrysa Cohen. “But we charged our customer based on the original pricing.” The manufacturer refused to adjust the price, and the jeweler absorbed the difference.

DOODLE-HEADS. Erik Jewelers, Tonawanda, N.Y., special-ordered a three-stone platinum mounting from a vendor who insisted on prepayment with a certified check “because some people might not pay.” The workmanship was poor, and the piece was stamped “14k” on one side and “plat” on the other. When storeowner Jann Anderson phoned the company for an explanation, she was told, “Those guys in the shop are a bunch of doodle-heads. Just buff out the 14k stamp.”

“There was no buffing [the mounting]—it had to be filled,” says Anderson. The vendor suggested that the jeweler “just give the ring to the [buyer] and have her bring it back and send it to the supplier to remove the 14k stamp.”

“We got this ring on a Friday, and the wedding was the next day, and the vendor knew that,” says Anderson, who reworked the mounting herself.

GHOST ORDERS. Just before Christmas 2001, a Midwest jeweler received a ring it didn’t order, from a company with whom it didn’t have an account. The jeweler called the supplier three times and finally had the ring picked up. That’s when the manufacturer began billing the jeweler for shipping costs; the company credited the store for the cost of the returned ring but not for the shipping costs. The vendor billed the jeweler every month for eight months before the situation was resolved.

HANDLE WITHOUT CARE. A customer of a New England jeweler brought in an 18k gold and diamond watch to have the bracelet resized. The jeweler sent the piece to the manufacturer for repair. Months passed. Calls were made. Finally, the watch manufacturer told the jeweler that they’d sent the watch overseas and it had been lost. No replacement was available. The jeweler took a watch from stock, handmade an 18k bezel, and set diamonds around it. He also deducted the total cost and more from his account with the manufacturer.

BROKEN PROMISES. A Southwest jeweler placed an order for merchandise to be delivered in October, agreeing to pay for half the shipment in December and the other half in January. The terms also allowed him a 25% return privilege. In December, the jeweler made the first payment. In January, he paid the balance and sent back 25% of the merchandise. The manufacturer refused the goods, claiming the jeweler owed money, even though the terms were clearly written on the purchase order. The company said the salesman who negotiated the deal wasn’t authorized to make such an agreement. The manufacturer did eventually take back the merchandise.

UNBALANCED. Cal Griffin, owner of Griffin Jewelers in Walterboro, S.C., signed up for a diamond engagement ring program under the following terms: The vendor would stock-balance the merchandise or write a check for what the store didn’t sell. After two and a half years of business and $140,000 in orders, Griffin Jewelers needed to exchange about $17,500 worth of merchandise. But the manufacturer refused to exchange the merchandise. “They told us they’d changed their mind about the stock balancing,” says Griffin.

CO-OPNOT. A Southeast jeweler contacted a manufacturer about having previously approved co-op money allocated. The jeweler deducted the funds from its account with the manufacturer, but the manufacturer never recorded the transaction in its books. The error affected the jeweler’s credit rating, and the jeweler unsuccessfully tried to contact his sales rep and the manufacturer’s accounts receivables department, finally reaching a sales manager only after the jeweler’s account was posted as “C.O.D. only.” It took more than two years for the manufacturer to agree to write off the amount, and the jeweler’s account still doesn’t state that co-op funds had been approved.

What jewelers want from suppliers:

  • Long-term relationships. Retailers figure they’re more likely to get better terms in long-standing relationships, and they’re more willing to discuss business details with trusted vendors.

  • Liberal exchange policies. Some products, no matter how stylish or well made, just won’t sell in a particular market.

  • Unique merchandise. It helps small operations differentiate themselves from chains and mass merchants.

  • Training and advertising materials, co-op programs, and displays. These items help retailers promote vendors’ products.

  • To be treated like valued customers. Jewelers—not consumers—are the customers of suppliers.

  • Timely notification of policy changes. Nobody likes to hear about major changes after a decision has been made.

  • Appreciation of the jewelers’business. Being taken for granted happens too often.

  • Assistance in balancing stock. Retailers appreciate a phone call from time to time to chat about what’s selling and what’s not. Everybody wants to see products move.

  • Quality control. Jewelers’ time can be wasted sending back items that aren’t assembled properly or are poorly finished or set.

  • Favorable terms. These make life easier for retailers who have to stand behind slow-moving products.

What suppliers want from retailers:

  • Help in keeping traveling salespeople safe. Walk sales staff to their cars after a visit and show lines out of shoppers’ sight. These measures add a degree of security to the risky traveling jewelry sales profession.

  • Ordering merchandise from a wholesaler’s secure Internet Web site, through a catalog, or at shows. This cuts down on the number of trips traveling salesmen must make to stores.

  • Acknowledgement that memois a courtesy. Package goods carefully when returning items to suppliers. Some suppliers say many returned memo goods are damaged.

  • Payment on time. Vendors also have bills to pay, pay-rolls to meet, and families to feed.

  • Reordering items after they sell. The sooner you reorder an item, the sooner you can sell it again.

  • Salespeople who get excited about carrying new lines. Talking enthusiastically about products makes it easier to train staff—who will sell the goods more quickly.

  • Perception of vendors as “good guys.” Vendors also are in the business of selling jewelry and benefit from seeing your business thrive.

  • Interest in new product. Manufacturers want and need feedback to nurture their own businesses and better serve you.

  • Information, such as annual growth goals, about your business. A vendor-retailer relationship is successful only if each party understands the other’s business.

  • Assurance that you’re able to evolve and adapt. Running your store the same way you did 20 years ago won’t work today; the industry is constantly changing.

  • Your willingness to ask them for assistance if you need it. Vendors are willing to help retailers in many ways, such as advertising and marketing.