Vendors, we need to talk…again

I’m climbing on my soapbox, so buckle in. I’m ticked.

This summer, my heart was buoyed by the fact so many vendors and sales reps brought a positive attitude to their showrooms and booths. The negative complaints about buyers, marts, traffic, etc. were replaced by (what I thought was) a realistic understanding that the economy stinks, consumers need to be engaged, and that with some compassion, patience, and understanding, we’d all come through this thing together.

Sadly, now that the summer show circuit has ended, I’m getting an inordinate number of phone calls and emails about vendors who have taken off the white gloves and replaced them with boxers, using strong arm tactics designed to corner accounts into impossible situations.

And what do I classify as ”impossible?” Suddenly changing a long time account’s status from N30 to pre-pay after their first late payment. Or telling a retailer it’s “too much trouble” to ship one high priced piece to the store at a paying customer’s request, but offering instead to drop ship it direct to the customer (complete with an insert advertising the vendor’s web store). Or requiring mandatory buy-in on a new release, then threatening to pull the entire pre-existing line if the retailer doesn’t comply.

Excuse me? Is bullying really the way to inspire loyalty and promote sales at a time that most retailers have stopped paying themselves, are working 80 hours a week, and have remained committed to promoting your products?

And no, these are not unique instances. Each and every one has come to me from multiple retailers about multiple vendors.

So, without naming names, here you go. A re-run of a post that ran in March, since I think the message bears repeating. Read it while standing next to a mirror, then when finished, look up at your reflection and see if you can say, in complete honesty, that you’re not pressuring your retailers. If you can say it with a clear conscience, please accept my utmost respect.

If you can’t, well…keep in mind this flat line economy is a temporary condition. When it turns around-—and it will-—that “beat down” strategy might look a titch ill conceived. Retailers have long memories. Like elephants.

Or, in this case, like elephants that have been kicked in the kneecaps. Hard.

(P.S. Before you whip off that angry comment about how retailers need to be more responsible, spin back to the March 19th post that preceded the one below. You’ll see I’m not playing favorites.)

End of rant. Thanks for playing.

Vendors, we need to talk

March 20, 2009 post

Yesterday, I had a heart to heart with retailers about late invoices, asking them to take a deep breath and call you. Today, it’s our turn to visit. Want to make sure there isn’t a disconnect on your end of the line.

Before you jump to the conclusion my heart rests solely with retailers, please hear me out. Like you, I have had late paying customers. I understand the impact that can have on one’s life. The bills still need to be paid, after all.

But I also understand the level of humility that comes with picking up the phone to make that call. Most retailers are, by nature, Type A-—over-achievers, head strong, determined…and proud. Admitting a shortcoming of any kind is like peeling their skin off. Admitting financial difficulty feels like the ultimate failure…even though it’s not.

So here they are, poised with telephone in hand, about to step off the high board and admit to a vendor they can’t pay an invoice in full right now. What will your reaction be? How will that soul baring admission be met?

If you hope to see a penny of that invoice, it best be met with compassion or odds are good that call will be the last you hear from them.

You’re struggling through all this too, I know. Your reps are living in fear that the next call they get from you will instruct them to “Get on that store about their invoice” (no one likes to be the henchman…if they do, I don’t want to meet them). Your credit line is stretched so thin you can see through it. And your deadline on the holiday production run is practically sitting in your lap.

The best…the only…way to recoup that revenue is to welcome those callers with open arms. The ones who are picking up the phone to make that nerve jangling call are the ones most likely to come through and pay when they have the money. They need to be nurtured, comforted, fed, and watered. They need to hear a tone in your voice that says “I see you as a human, and I get it.” They need to understand you don’t automatically assume they’re going out of business (trust me, those accounts won’t call).

They need you to treat them the way you’d like to be treated if you felt like the most exposed person in the room.

And yes, that goes both ways.

One thing I’d like you to please, please keep in mind, my lovely, admired vendors, is that-—sadly-—on the retail food chain, you place about number five at best. When the trickle of money comes into a store, it must flow back out in a very specific order, based on threat level. Translated, that means that bills get paid as follows:

1. Rent
2. Taxes
3. Payroll
4. Utilities
5. Vendors

You will never outrank numbers 1-4. If the door is locked, the state comes calling, employee vaporize, or the lights turn off, the store is toast. Yes, this is tough love time, I know. But you need to be aware that this is reality on the street.

(Did you notice that nowhere on there was “salary?” I can name all the retailers I know who are still paying themselves on one hand…and have fingers left over.)

So please, kind souls out there in Product Land, welcome your retailers with warmth and understanding when they call. They want to hand you money, albeit in different “chunks” than you may have hoped. Talk to your reps. Talk to your customer service department. Talk to your accounts receivable office. Explain to them that if they’re nice, the odds of getting paid increase exponentially.

If they aren’t, the odds of getting paid are pretty much zilch.