Archive for October, 2008
Sales and Discounts a Priority for This Year’s Holiday Shoppers
Friday, October 31st, 2008
As expected from bargain shoppers over the years, more than 40 percent of consumers have already started their holiday shopping, according to the National Retail Federation.
But over the past four holiday seasons, consumers as a whole have grown more cautious and calculative. This year, they plan to spend an average of $832.36 on holiday-related shopping – a mere 1.9 percent increase from last year, and the lowest increase anticipated since 2002.
Wholesalers in addition to discounters should do relatively well this season, said Michael Niemira, International Council of Shopping Centers chief economist and director of research.
“Not surprisingly, big-ticket purchases are likely to take a backseat to more traditional, basic and value-oriented goods and services,” he said in a statement.
Four years ago, holiday consumers dodged discount stores and items in favor of luxury goods and brands. Now about 70 percent of consumers plan to shop at discount stores, while 40 percent of them will consider sales and discounts as the most important factor in choosing where to shop. Only 13.4 percent ranked merchandise quality as most important today, according to a National Retail Federation survey.
With odds against them in the housing and job markets, holiday consumers even plan this year to decrease spending on gifts for family members. And with such priorities in mind, Kohl’s launched Wednesday a holiday campaign implementing aggressive savings and a resonating tagline: “Gifts That Fit Your Budget Beautifully.”
“Our entire holiday program is designed to help customers stretch their budget during an especially difficult holiday season,” said Kevin Mansell, Kohl’s president and CEO, in a press release.
But even with early promises of savings, researchers predict that this holiday season will bring the weakest growth since 2002. The National Retail Federation predicts that sales will rise by 2.2 percent; the International Council of Shopping Centers, 1.7 percent. Sales have risen an average of 4.4 percent over the past ten years.
Tags: christina lee, holiday shopping, International Council of Shopping Centers, Kohl's, national retail federation
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Q&A: How to Become an Apparel Buyer
Thursday, October 30th, 2008
Q: How does one become an apparel buyer for a retail store or company?
A: While they may shop for a living, apparel buyers do so under the scrutiny of perhaps an entire merchandising department, certainly for an entire consumer base. The fashion sense buyer positions require is not entirely inherent. In fact, many of them require a bachelor’s degree, with completion of business, economics or finance courses.
An aspiring buyer could even earn at the Fashion Institute of Technology a Bachelor of Science degree in fashion merchandising management. Required courses in buying and planning specialization include FM 322 (Fashion Inventory Management) and FM 325 (Financial Assortment and Planning).
But while such a degree is not entirely necessary, retail experience is. Students attending the Fashion Institute of Technology often take trips to buying offices in addition to retail stores, specialty shops and showrooms. According to a job listing posted October 21, New York and Company requires that applicants for its assistant buyer position have spent at least a year in fashion retail.
Through all of these experiences, aspiring buyers should have also gained a sense of how business for the retail store or company can be conducted efficiently. Buyers are constantly tracking orders and analyzing figures, all to keep merchandise flowing and sales rising. A BCBG Max Azria junior buyer also evaluates seasonal performances of stores and departments, in addition to writing up weekly business recaps.
Finally, aspiring buyers must be able to work as team players. A BCBG Max Azria job listing for a junior buyer rattles off eight individuals and departments to whom he or she must report. Perhaps most important, apparel buyers must be able to maintain relationships with suppliers, ideally so that both are catering a store or company’s customer.
Tags: apparel, BCBG Max Azria, christina lee, Fashion Institute of Technology, how to, New York and Company
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Flea Markets and the Wholesale Strategy
Wednesday, October 29th, 2008
When Manuella Lizzio co-founded the International Trade and Marketing Group (ITMG) in 2001, she originally conceptualized it to be an exporter. But when inspiration struck Lizzio to design a line of handbags, the Rockville, Md.-based company soon had to figure out if her vision could sell.
“The main goal of the company was really to do wholesale as opposed to retail,” Lizzio said, “but to make something that’s really tailored to the consumer would imply that we really want to get into that retail mentality.”
Two years later the Bethesda Flea Market, hosted by the Montgomery Farm Women’s Cooperative, would become Lizzio’s testing ground. While selling five to ten handbags would have sufficed, her stand sold 15 handbags on the first of three days she spent there.
“It was just a good way of really seeing how people react to the designs that we were trying to start with,” she said.
Shoppers across the United States can now visit more than 2,000 flea markets, with each of them hosting hundreds of vendors. And while they are typically known to house antiques and vintage wares, flea markets have also slowly become promising venues for aspiring wholesalers, with any sort of merchandise.
Over the past year, the number of flea market shoppers has grown by 2.3 percent, while the number of vendors has grown by 1.2 percent. And with the number of sources for antiques and vintage wares dwindling, now more than two-thirds of vendors sell new merchandise they get from various suppliers, said John Schoen, executive director of the National Flea Market Association.
According to Schoen, the industry flourishes a little during an economic downturn because today’s flea market shopper and vendor are both looking to save money. “Shoppers say, ‘I’ll be going to the flea market because I can get what I want for my family, for a lot less money.’”
Meanwhile, vendors are likely selling at flea markets for supplemental income. Jerry Stokes, National Flea Market Association founder, stands convinced that the flea market provides the cheapest, easiest way to start a business, being “the landlord for the entrepreneur vendor.”
The Pasadena City College Flea Market – which regularly hosts over 450 vendors – charges $70 to $100 for space ranging from 17-by-16 to 17-by-32 square feet. Meanwhile, the San Jose Flea Market charges anywhere from $20 to $75 for a space approximately 17-by-20 square feet.
“If a person is going to get into a business, they have to rent a storefront. They gotta get a license, they gotta get the overhead, they gotta have a lot of money to start up,” Stokes said. “But a [flea market] vendor, they can rent a booth and they can be in business.”
For the past ten years, Stokes has worked to create representation of the flea market industry. Since founding the association, he has created a number of online resources for flea market vendors, including Vendors Only and Find a Flea Market. Suppliers of anything from closeout apparel to sporting goods have also begun noting that they sell to flea market vendors – or, like AAA Flea Market Supply, work solely with them.
Meanwhile, Lizzio and a number of jewelry designers she met in Bethesda have since moved on to wholesale efforts, thanks to the responses they received.
“Just staying in your community is sometimes the best way to begin something,” Lizzio said, “and the flea market just presented itself as a pretty good opportunity to do that.
Tags: AAA Flea Market Supply, Business, buying wholesale, christina lee, Find a Flea Market, flea market business, flea markets, International Trade and Market Group, ITMG, Jerry Stokes, John Schoen, Manuella Lizzio, National Flea Market Assocation, Pasadena City College Flea Market, San Jose Flea Market, Vendors Only
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Company Spotlight: Halloween Costume Wholesalers
Tuesday, October 28th, 2008
Last month, the National Retail Federation found that more than a third of Halloween consumers still planned to buy a costume, while spending an average of $39.31. Based on their observations, the organization theorized that consumers were still looking for a way to escape life’s daily stresses – and, perhaps, that Halloween was the answer.
This Halloween retail season will last longer than last year’s, with Halloween on a Friday rather than a Wednesday. This could mean for retailers that “their strongest sale days are yet to come,” said Howard Beige, executive vice-president of Rubie’s Costume Company.
As for costume wholesalers, they can still sell easily what they have either deemed the “classics” or the “perennials”: witches, pirates, vampires. And more than ever, they are selling to online retailers and temporary stores, ones that stay open solely for the Halloween season. This year, costume wholesalers have been as busy as ever, to bring the new and exciting costumes to storefronts across the U.S.:
- Spotlight Costumes
“We are small but mighty,” said owner Kim Brown. Spotlight Costumes mainly supplies full ensembles for theatrical productions and themed weddings.However, for Halloween it also ships out to 350 brick and mortar costume shops, with most concentrated in the east coast. The former National Costumers Association president also designs each costume, the most popular ones of the wholesale line being the flapper, the pimp, the Tin Man, and Marie Antoinette. - Franco American Novelty Company
Franco American Novelty Company has been distributing to an increasing amount of temporary stores, said Jay Dinhofer, one of the company’s account executives. He added to any number of their 4,000 total retail store fronts, they have shipped thousands of its Cleopatra women’s costumes. That being the company’s best seller is a testament to consumers’ growing appreciation of the industry.
“Instead of going sexy and short – as the trend may be – this has more to do with the sophistication today that is available at reasonable prices,” Dinhofer said. - Disguise
Disguise claims itself to be the second largest costume manufacturer in the U.S. This San Diego wholesaler has sent out about a million costumes this year, said Bernice Nesbit, senior marketing manager. Disguise’s biggest sellers this year stem from their movie and television licenses. Boys will likely be seen as either Iron Man or Transformers characters, while girls will probably transform into either Hannah Montana or Disney princesses. The company also offers an easy, timely idea for adults, with their Obama and McCain masks. - Rubie’s Costume Company
This New York-based wholesaler has distributed over 25 million costumes to retail store fronts this year, Beige said. And if any manufacturer/distributor could prove that movies drive the Halloween costume business, it is this one. (After all, it is the largest of its kind in the world. Rubie’s has offices in Europe and Asia, in addition to those all over North America.) Key licenses Rubie’s obtained include “The Dark Knight,” Indiana Jones and “Star Wars: The Clone Wars.” But of course, the boys cannot be allowed to have all the fun. Popular girls’ costumes this year include Sharpay and Gabriella from “High School Musical.”
Tags: Bernice Nesbit, christina lee, Company Spotlight, Disguise, Franco American Novelty Company, halloween, holiday shopping, Howard Beige, Jay Dinhofer, Kim Brown, national retail federation, Rubie's Costume Company, Spotlight Costumes
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How To: Get a Manufacturing or Wholesale Distribution Job After College
Monday, October 27th, 2008
A recent study by the National Association of Colleges and Employers revealed that in light of an economic downturn, employers plan to hire 1.6 percent less college graduates than they anticipated in August
But while more than half of the 146 organizations surveyed also said they planned to cut hiring, the study revealed stark differences in hiring expectancies between the manufacturing and distribution industries. While manufacturing industry plan to hire nearly as many college graduates as they did two months ago,the distribution and utilities industry expects to hire 17.6 percent less.
The association typically conducts its job outlook survey annually, said Andrea Koncz, its employment information manager. Researchers felt compelled though to poll the respondents again for more than a week in October, seeking more up-to-date information.
"We kept hearing more bad news coming from Wall Street," Koncz said, "and with the original projections in August… we didn’t feel comfortable going with that."
Despite expected cuts, today’s employers still plan to hire 1.3 percent more college graduates than they did from the class of 2008, In response to the study’s findings, Heath Weems, National Association of Manufacturers director of education and workforce policy, and Phyllis Russell, Power Transmission Distributors Association Foundation executive director, talked with goWholesale about these industries’ abilities to hire and how college graduates can find jobs in both.
The Current State of the Industries
In general, manufacturers are downsizing unless they export or carry a product with a niche, Weems said. He attributes this trend to increasing global competition, though he also argues that its full impact has yet to be seen.
In a National Association of Manufacturers survey conducted three years ago, 81 percent of manufacturers responding said they faced a moderate to severe shortage of qualified workers. About 65 percent of them said also that they could not find enough scientists or engineers. Not much has changed since, Weems said.
Meanwhile, because of their close ties with manufacturers, distributors are just as affected by the economic downturn, Russell said. But college graduates can also look forward to a number of job openings to come, due to, at the very least, the number of baby boomers retiring.
"This year’s tough everywhere, but that is not a long-term trend," she said.
"Homework" Assignments for College Graduates and Industries
From a manufacturer’s perspective, "just because you’re unemployed doesn’t mean you’re employable," as Weems said.
A lot of positions available in the industry now require some sort of post-secondary training, by either working toward a two-year degree or participating in some other credential program. The great question then becomes, "How do we target resources to the unemployed to give them the training and skills employers are looking for?" as Weems said.
With that, the time for an answer is now. Since training programs take anywhere from six months to two years to complete, Weems says that the manufacturing industry needs to make them more readily available as soon as possible.
"If we don’t try to address those challenges now, we’re going to be back to where we were before, in need of those skilled workers. It’s going to hurt our ability to rehabilitate."
Meanwhile, Russell assures college graduates that they still have a number of job opportunities available – but they cannot wait for them to come knocking.
College graduates first need to look beyond the bigger distributors, to the smaller ones located outside of the cities.
"We still hear from many industrial distributors that they are hiring, that they are interested … that they are looking for folks," Russell said. "But those companies are not always located in the biggest cities."
In such an economic environment, college graduates also need to be assertive. They need to be seeking employment in those smaller distributors, for they "are not going to be showing up necessarily at college career days," as Russell said. Graduates can also still approach the bigger distributors, or any distributor they wish.
"If you know that you’re prepared for walking in and introducing yourself, not waiting for those openings, but rather saying, ‘this is the work that I want to do’ … that is tremendously appealing for an employer."
Bottom line: whether college graduates want careers in manufacturing or distribution, they must understand the industry and develop the necessary skills. As for the industries themselves, they may need to prepare themselves as well for the class of 2009’s arrival.
"Now may be a great time to snatch up some talented graduates," as Modern Distribution Management said last week .
Tags: Andrea Koncz, christina lee, college graduates, distribution, employment, Heath Weems, manufacturing, Modern Distribution Management, NAM, National Association of Colleges and Employers, National Association of Manufacturers, Phyllis Russell, Power Transmission Distributors Association Foundation, PTDA
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Save the Date: NAW’s Billion Dollar Company CFO Roundtable
Friday, October 24th, 2008
Wholesaler-distributors need not approach November with questions of their financial wellbeing. Instead, they can turn to the National Association of Wholesaler-Distributors‘ next billion dollar company roundtable at the Hilton Chicago O’Hare Airport, November 10 to 11.
Association members from 22 distribution companies have already registered to hear what top chief financial executives expect next month. Among them will be JPMorgan Chase’s senior vice-president Peter Connolly and vice-president Patrick Fravel, who will present solutions banks are providing to wholesaler-distributors post-commercial banking crisis.
Jade West, the association’s senior vice-president of government relations, will also open the roundtable’s second day to discuss what the presidential election results could mean for wholesaler-distributors.
“It’s really the only place I know of that CFOs of wholesaler-distributors at a billion-dollar level can really get together like this,” said Dana Neill, the association’s director of member services. “You may find something like this for other industries, but this is probably the only place solely for wholesaler-distributors.”
For more information, call 202-872-0885 or visit www.naw.org.
Tags: billion dollar company roundtable, christina lee, Dana Neill, Jade West, National Association of Wholesaler-Distributors
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Q&A: How Will the Bailout Plan Affect Wholesalers?
Thursday, October 23rd, 2008
Q: How will the bailout plan affect wholesalers?
A: Financial suffering is bound to trickle down the supply chain because of unstable credit conditions. As a result, “many wholesale distributors will be affected by the government’s efforts to stabilize the credit markets,” said Brent Grover, managing partner at Evergreen Consulting and National Association of Wholesaler-Distributors author (“Official Guide to Wholesaler-Distributor Success”).
The extent of that effect depends upon how quickly the government can stabilize the banking system. Because of economic times like these, the bailout plan – or, the Emergency Economic Stabilization Act of 2008 – implemented discount rates to the costs of both purchasing and insuring troubled financial institutions, as once defined by the Federal Credit Reform Act of 1990.
Distributors typically have two primary sources of financing: supplier credit, or how much self-financing goes into company operations; and bank credit, or how much a company borrows through either credits or loans. A typical distribution business usually borrows 30 to 60 percent of its capital, or total amount of financial resources available, according to Grover.
Such a business still has to consider then how interest rates can rise and how the availability of credit can fall. For a distributor, weakened suppliers and apprehensive customers “can be dangerous to deal with,” Grover said, for all can suffer from decreases in sales and profits.
With this, highly-leveraged companies – or those with a heavy use of bank credit – may also struggle to make regular payments back to banks. Add struggling banks into that relationship, and “the problem is exacerbated,” Grover said.
In sum, “the government’s efforts to stabilize the banking system, if successful, will bring a great deal of relief to the customers of those banks,” as Grover said.
Of course, how quickly these efforts will be made has yet to be determined. But with the determination amongst the administration and Congress, as the Wall Street Journal’s David Stout wrote last month, “while a couple of venerable investment banks could fade into oblivion or be absorbed by mergers, the entire financial system could not be allowed to collapse.”
Tags: bailout plan, Brent Grover, christina lee, economic crisis, Emergency Economic Stablization Act of 2008, Evergreen Consulting, National Association of Wholesaler-Distributors, wholesale distribution
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Safety First: NAUMD Aims to Keep Modern Uniform Design Challenging
Wednesday, October 22nd, 2008
Perhaps not in every “best dressed” competition do judges evaluate details like a pocket flap. But such a contest held by the North-American Association of Uniform Manufacturers and Distributors may consider it the difference between a right and a wrong look.
“If there is any possibility at all in the duty of an officer that the cover of that pocket can get caught in his or her hand — whether they are reaching for a weapon or doing some other act — then you’re not doing your job,” said Richard Lerman, president and CEO. “They can be hurt, the person they’re trying to assist can be hurt, and they discharge that weapon simply because of a problem that should have never occurred.”
Since 1933, the association has created alliances between companies working in all aspects of outfitting policemen, firefighters and medical staff, among others. Such companies are recognized in the association’s “Best Dressed Public Safety Awards” at its annual convention and expo.
Safety measures only account for part of what judges — ranging from law enforcement members to apparel consultants — evaluate. They also analyze how well a uniform conveys an image and identity, of both the department and the community.
Police officers used to wear solely “navy, navy and more navy,” as Lerman said. But these days, with a number of municipalities popping up in communities, designers have since taken more creative liberty.
Regardless though of whether they are suited in brown, grey or green, judges reward elements that make an officer easily identifiable. An iridescent stripe, for example, can be seen as a life-saving and perhaps winning addition, Lerman said.
While its “Best Dressed Public Safety Awards” rewards a final product, the association has become increasingly concerned with a uniform’s creation. As a result, this year the association deemed its annual convention and expo “Meeting the Challenge of Change.”
One challenge the convention will address is the increase in sourcing abroad over the past 20 years. Due to union and federal regulation, U.S. labor and energy costs can add up, resulting in sourcing from, lately, Vietnam and Africa, Lerman said.
The association works with the Environmental Protection Agency regularly, Lerman said. All parts of a uniform’s life can be made into green initiatives, from its creation — with only approved chemical solutions — to its disposal — possibly grinding it into coat insulation.
“What they use to enhance uniforms — a plastic seam product used on the elbows of jackets, depending on the work environment — those have to be environmentally acceptable now,” Lerman said.
When the association recruited Lerman in 2006, he had to quickly acquaint himself with the industry’s many and growing concerns. But the reward of facing such challenges can be summed up in one moment, he said.
“When a new police officer is able to put on a real uniform and not training for the first time, you see the look in their eyes, and you know that just putting on that uniform is a great achievement, that the honor and dignity they’re seeking as a police officer is there. The challenge for our members is to make sure the uniform they’re putting on is worthy of that respect and dignity and honor, and not in any way taking away from that.”
Tags: christina lee, distributors, Environmental Protection Agency, green movement, NAUMD, North-American Association of Uniform Manufacturers and, Richard Lerman, working with manufacturers
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Wholesale Prices Still Dropping After 27-Year High
Tuesday, October 21st, 2008
Wholesale prices dropped for the second month in a row after reaching the highest annual rate in 27 years, according to a U.S. Department of Labor report.
Prices fell by 0.4 percent in September, following a 0.9 percent decrease the previous month. They are still 8.7 percent higher than they were in September 2007, as the Bureau of Labor Statistics reported last week.
The two-month drop in wholesale prices – collectively referred to as the producer price index – follows a 1.2 percent month-to-month increase and a 9.8 percent rise from July 2007, that being the sharpest increase since a 10.4 percent jump in June 1981.
Energy prices continued to decline as well, by a total of 7.5 percent over the past two months. While this has helped ease economists worrying about inflation, they cannot claim overall financial stability with the current state of wholesale prices.
Without food and energy prices factored in, the producer price index of finished wholesale goods still rose by 0.4 percent in September – a “good news, bad news story” as stated by Peter Morici, University of Maryland international business professor and Seeking Alpha contributor.
“That indicates that we have yet to see moderation in what businesses charge at a wholesale level,” he said in a phone interview.
Some wholesale prices of finished goods – including that of women’s, girls’ and infants’ apparel; plus office and store machines and equipment – fell after rising in August. But the prices of finished consumer foods continued to increase by 0.2 percent, after rising 0.3 percent in August. Those declines also accompany a 15.4 percent rise in prices of intermediate goods as received by manufacturers, according to the report.
And while those producers may have noted a change in their prices, consumers did not see much change at all. In fact, the consumer price index, or the change in prices as seen by households, was “virtually unchanged in September,” after just a 0.1 percent decrease in August, the Bureau stated. This follows a 1.1 percent overall rise in June, which included a 3.8 percent increase in transportation prices and a 6.6 percent increase in energy prices.
Morici had predicted for September a 0.2 percent decline. Now he expects more of the same moderate pricing in the future – “more tepid increases, or maybe decreases in wholesale prices through the end of the year.”
Tags: Bureau of Labor Statistics, christina lee, consumer price index, Peter Morici, producer price index, Seeking Alpha, U.S. Department of Labor, wholesale pricing
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How I Did It: Selling Wholesale Direct-to-Consumer
Monday, October 20th, 2008
Pablo “J.P.” Kochen created Wholesale Furniture Collections so that he could sell and ship to any customer, in any state. His main motivation: the stories he kept hearing from customers who attempted to purchase furniture online, only to see their checks disappear with the companies.
Kochen’s Florida-based company has since joined an increasing number of others that are selling wholesale direct-to-consumer. These wholesalers generally adjust from merely receiving orders to dealing directly with customers, then earning their trust. For Kochen, that meant teaching the basics of secure online purchasing.
Kochen first began selling furniture in 2005, to interior designers decorating model homes along Florida’s west coast. People who saw these model homes became some of the company’s first regular clients.
“We saw that potential going nationwide, not just locally,” he said.
Wholesale Furniture Collections now works with seven delivery companies to ship from manufacturers like Drexel Heritage, Lane Home Furnishings and Kincaid. Nowadays, as Kochen estimates, at least a fourth of company sales stem from word-of-mouth.
The majority of company sales are made online, through a Web site made shortly after the company’s founding. With this, most of the advertising efforts are also online, the latest being the use of advertising platform Google AdWords.
“We just keep trying to market ourselves better,” Kochen said, later adding, “What’s good for us is that now people are shopping around, so we’ve been getting a lot of those clients.”
But those clients are sometimes too tempted by low prices. Companies that sell for three times less than the retail price can get away with asking for full payments, only to never deliver the pieces of furniture, Kochen said.
“The problem is, there’s a lot of bad business out there. The consumer can get in trouble really easily.”
To build confidence in his company, Kochen explains to individual consumers – who he estimates make up 70 percent of sales – the basics of making a secure online purchase. For one, he encourages first-time customers to pay by credit card rather than by check, so the purchase can easily be tracked.
“I tell my clients, you gotta worry about how you pay for this,” Kochen said. “They come in wanting to pay with a check and I say, ‘Listen, I don’t want you to stress about this later. Pay with a credit card and then, send in an order with a check the second time you do business with us, after you get to trust us.’”
Also, rather than taking a payment in full, Wholesale Furniture Collections first accepts a 50 percent deposit, and then only takes the rest of the payment once a delivery is scheduled.
Up to 2,000 customers from the United States and Canada usually purchase from the company around this time of year – and Kochen is one of six in the company headquarters ready to address their needs.
Despite news of the economic environment, Wholesale Furniture Collections is still striving for a 30 percent year-to-year growth, Kochen said.
“For the bad economy, we’re doing okay.”
Tags: buying wholesale, christina lee, direct-to-consumer, Drexel Heritage, furniture, Kincaid, Lane Home Furnishings, online, Pablo "J.P." Kochen, Wholesale Furniture Collections
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