Small Retailers Say The Big Boys Get All The Breaks

September 14, 2015

Some suppliers of home textile products admit that they often favor large retail chains with timely order deliveries, leaving small retailers to wait. Some suppliers insist that they treat all customers alike, but many say that it is more economically favorable to serve the larger stores first. For example, Spring Industries will only directly serve accounts of $75,000 and up. Other stores must order goods through distributors.

Small retailers say the big boys get all the breaks, especially when it comes to delivery.

What do their suppliers say?

Many vendors insist they treat all, their customers alike, regardless of size. Others, however, admit they play favorites, citing economies of scale as their excuse.

At Springs Industries, for instance, the smallest account the company will service directly is $75,000 a year. Stores that cannot meet the volume limit must order through distributors, said a company executive who requested anonymity.

It is “very difficult” servicing the small guy, contended the executive, adding, “We don’t put those accounts in the hands of the salespeople. We have a telemarketing operation. It works”

Another mill executive said small retailers’ gripes are legitimate, but the issue boils down to one of numbers. “If you asked some companies how many salesmen they had 10 years ago compared with today, you’d find that the number had diminished dramatically – from 25 to perhaps six or eight,” the executive said. “That being the case, how are you going to handle the little account? Fundamentally, it gets down to foot power.”

The executive also pointed out that vendors have closed numerous offices around the country. “If Penney’s weren’t in Dallas there’d be no Dallas offices,” he added.

The advent of Electronic Data interchange and the proliferation of retail mergers, the executive said, have helped reduce the number of sales-people vendors need to service major accounts. There is another consideration, too. “The cost per call is the same whether you call on a big or little guy, so the payback is different,” he noted.

Some vendors, such as Fieldcrest Cannon, have an interest in servicing boutiques. “We sell a lot of better goods so we need to sell a lot of those better stores,” said Bob Dale, president. Fieldcrest’s solution to overcoming the difficulties of servicing independents, Dale said, is “a fairly broad investment” in sales representatives. Also, the company has a telemarketing division for retailers who use credit vehicles like MasterCard to pay for orders, he said.

“If there’s a longstanding relationship, we bill. The [telemarketing] division has its own management team and a nice level of sales,” Dale said. But, he said the downside for retailers serviced by this division is that their orders are taken over the telephone. No sales representatives visits these accounts, he explained, therefore they do not get to see product samples.

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