Imports: right or wrong?
Carl Vice -- Casual Living, May 15, 2006
We have all felt the impact of the import products within our industry. For some, it's the increased profit margins, for others it's a unique pattern that separates specialty retailers from the mass market. At best, imports are increasing our profit margins; at its worst, we are devaluing the retail price point and that reduces our cash flow.
Let's face it: The only reason we import containers is for the price. Is the low price helping or hurting your bottom line?
Yes, we can all sell more sofas at $600 than $1,200; however, with every sale at $600, we take less money to the bank. We will add new customers by offering the lower priced sofa, but will we double or triple our customer base to make up the revenue? Probably not!
All across America, retailers are devoting more floor space to import products and less floor space for domestic-made products.
The grill industry has been changed dramatically by imports, and more and more specialty retailers are vacating the category.
Full line furniture retailers now import their private label collection and complain that consumers will no longer pay higher prices for premium quality American-made furniture.
Fireplace manufacturers are headed to China to knockoff their own designs and shut down American production. Are they wrong? Have we decreased our prices and profits without a clear mandate from the public? Have we loaded our floors with the same sling chair, cast aluminum chair or woven rocker that the mass merchants offer? Are we naïve enough to think we can undercut the price of the big smiley face store?
Then there is the supply question. When will the container arrive? Did I order the right mix of inventory? What happens if I need more lounge chairs to complete the sale? Will I have to purchase another container? Add another $6,500 freight charge? Will I be stuck with excess inventory? If you can't answer the questions, then you had better trust your vendor or your sales representative.
Before I place an order for overseas product, I must have 100% confidence in my vendors. They must have a competent office staff and customer service. I expect them to have a mainland warehouse with product on hand to fulfill shortages, damages, warranty replacements and even the occasional special order. My success with importing lies with the vendors who service me totally. I can grow my business with vendors that provide terms, have inventory to draw from and unique freight programs designed to help me. The vendor that only has a low price on import goods for me and the mass merchant alike is very low on my priority list.
Now is the time to pre-plan for your 2007 import program. First, select carefully the product categories desired. Be selective and create patterns that will be exclusive to your store. Second, determine the price points you want to be at, interview the sales representatives and the officers of the company. And third, find out how they can design a container program that fits your company's needs.
The better the communication now, the greater the profits in 2007.
Best of luck during this selling season.
Tiny Girl, Big Dream