Margin Support
It is interesting to read about the problems that Saks are facing in the US about improper collections of vendor markdown allowances".
I have never been a big fan of retrospective discounts of any sort as they are often used to wrong foot the inexperienced buyer or seller, and they obscure the view of achieved margin
(How many of you have margin reporting systems that show you the actual or potential effect of overriders and /or other retrospectives?)
Also, asking your suppliers to "support markdown" is effectively asking them to take the stock risk for you, which is like having your margin cake and eating it. Nice if you can get away with it
I suppose, but maybe not the best way to ensure a robust and responsive supplier base.
This is really the antithesis of the Quick Response projects that I worked on in the 90's
Couple that with the fact that in the UK at least many retailers insist on 90 day payment terms, so they would probably end up asking for the markdown support payment before they had paid for the goods, and you can see why I think that a training course for buyers on "keeping a straight face when dealing with suppliers" would be a real money spinner ;-)
I have never been a big fan of retrospective discounts of any sort as they are often used to wrong foot the inexperienced buyer or seller, and they obscure the view of achieved margin
(How many of you have margin reporting systems that show you the actual or potential effect of overriders and /or other retrospectives?)
Also, asking your suppliers to "support markdown" is effectively asking them to take the stock risk for you, which is like having your margin cake and eating it. Nice if you can get away with it
I suppose, but maybe not the best way to ensure a robust and responsive supplier base.
This is really the antithesis of the Quick Response projects that I worked on in the 90's
Couple that with the fact that in the UK at least many retailers insist on 90 day payment terms, so they would probably end up asking for the markdown support payment before they had paid for the goods, and you can see why I think that a training course for buyers on "keeping a straight face when dealing with suppliers" would be a real money spinner ;-)
posted by John Hobson at 4:54 pm
1 Comments:
Asking your suppliers to "support markdown" may not be the best practice but to me at least is understandable, supplier sell thousands of units at a time while we sell one unit at a time. It seems to me it is only fair that the risk is shared if not transferred totally to the supplier.
Yes this might shield mediocre buyers, in the short time, that is, until other KPIs are developed. This would put on the spot those suppliers that care only about how much money they make, regardless of whether they stuff sells or not. Can you believe that there are suppliers who do not know our customer profile but insist on selling us their products? Have you heard some of the advice these suppliers give to our buyers, plain dangerous stuff!
Thembelani
19/05/05 @ 08:35
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