By Abe Sherman
The auto manufacturers have this one right… it doesn’t matter which dealer sells their car, as long as someone sells their car! If you’ve ever sat in a car dealer’s showroom looking for a specific car in a specific color with specific options, you aren’t surprised to learn that the dealer whose showroom you happen to be in doesn’t have what you are looking for. How do they get you the exact car you want? Do they order a new car to be built for you from Detroit, Germany or Japan? Do they tell you you’ll have to wait 6 – 8 weeks until it comes in? …Well, maybe, but only if they have to. The way they find you that car is by logging onto their manufacturer-provided dealer-network so they can find the exact vehicle you are looking for among all of the authorized dealers in their market area. We accept this as normal since it makes so much sense to us, as consumers looking to buy a specific car.
The auto manufacturer doesn’t care who sells the car, they just want the inventory sitting in showrooms to clear out as efficiently as possible so they can keep their own production lines moving. Building exactly the right number of cars in the right colors with the right options is a constantly evolving process, informed by the buying public each time a car is purchased off a lot or put into production as a special order. Produce too many of a particular model or color, and someone will likely be stuck with that inventory at the end of the year. Produce too few and risk missing out on tens of millions in potential profits within that model year. And the real rub is they have to go through this every model year – because in the auto industry, each and every product has a life cycle. Last year’s inventory is devalued immediately – in effect punishing the industry for poor production or inventory planning.
Our two industries think very differently about several important issues, however. In our beloved jewelry industry, for example, when a customer is looking for a specific item that we don’t have in stock, we think nothing of ordering a new one, making the customer (and us) wait upwards of 6-8 weeks before we can deliver that item and collect the dough. Where the auto industry provides the systems to allow dealers to buy or swap cars among themselves, the jewelry industry doesn’t provide that same transparency. In fact, the jewelry industry thinks very differently about who the ultimate consumer is. The car companies believe that the consumer is their customer and they use their dealer network to facilitate the sale and servicing of their brand. However, jewelry manufacturers believe (or at least they act as if) the retail jeweler is their end customer. There are some stark ironies created by the distinctions between these opposing philosophies.
The auto industry supports dealer-to-dealer swaps, year-end blowout sales and incentives to encourage the sales of aging inventories. The result is they are constantly supplying their network with new models resulting in the dealers being left with precious little aged inventory at the beginning of each model year – furthermore, that aged inventory is incentivized by the manufacturer to sell first. The jewelry industry takes the exact opposite approach. For starters, jewelry manufacturers do not provide systems for retailers to trade among themselves. In fact retailers are often forbidden by brands to ship “their” (the brand’s) merchandise to other retailers, even those who are authorized dealers of that same brand.
Furthermore, jewelers are forbidden by the brand (or at the very least, strongly discouraged) from discounting the aged inventory, but, at the same time, the brand is often not willing to take that inventory back. I should point out here that I am not an advocate of manufacturers just taking back aged inventory (what are they supposed to do with it!) without a clear path of how to unload that inventory.
So, here we are – decades of inventory build-up, an industry without any transparency between manufacturer and retailer and we find ourselves in situations where, often, the relationships between brands and retailers are strained. Retailers want the manufacturers to help them out of non-performing inventory and manufacturers continue to up the ante (inventory requirements) in order for the retailer to remain an authorized dealer – or at least to remain an ‘exclusive dealer’ in their markets.
Ultimately, this is not a healthy environment for either party. While each side complains (albeit sometimes quietly and to anyone other than the manufacturer), the problem of non-performing inventory in our industry remains a burden for all. Well, we now have a solution that can do something to significantly improve this situation for both parties.
We are introducing the BrandShare Network™ in the coming weeks, a stand-alone service built on the Balance to Buy™ platform. The concept is simple: Adopt the solution provided by the auto industry.
BrandShare Network™ retailers will be able to buy, sell or trade with other like-branded retailers who carry those brands as well as non-branded jewelry lines. This is a permission-based system, where all participants will decide which manufacturers they want to exclude from the searches and which retailers they would like to deal with. Only retailers who carry that brand are able to buy or sell with other dealers – hence the name, BrandShareNetwork™. We have built the network for like-branded retailers to trade among themselves.
BrandShare Network™ Benefits:
· Completely permission-based – you decide who to deal with and what brands to show
· Search the BrandShare Network™ database 24/7 for inventory in-stock in other stores
· Buy items at lower costs than current replacement cost
· Receive the item in days, not weeks
· Sell your aged inventory to other like-branded jewelers
· No need to stock balance with the vendor at 3:1 or worse
· Maintain brand integrity by selling your inventory to other authorized dealers
· Improve your cash flow
· Improve your margin
· Find discontinued items sitting in other retailer’s inventories
· Use BrandShare Network™ as your exit strategy when you part ways with a brand
· We collect no commission
· Very low introductory monthly pricing
Our Plexus Performance Group™ members have already begun buying, selling and trading inventory within their Plexus groups; saving money while helping to move out aged inventory from other jewelers. Soon we will be reaching out to jewelers who carry a wide range of lines to finally begin to fix the problem of non-performing inventory.
Stay tuned for more information about special introductory pricing and the BrandShare Network™ presentation at JCK Las Vegas.
Stay tuned for more information about special introductory pricing and the BrandShare Network™ presentation at JCK Las Vegas. Visit www.BrandShareNetwork.com or email firstname.lastname@example.org. Of course, you can always feel free to email me directly, email@example.com.