The following comments are reprinted with authorization from the author, Mr. Alan J. Zell

"Whether one realizes it or not, selling to department stores can be a boon
or a bust . . . heaven or hell.

But first, we have to define "department stores." They are almost a thing
of the past. What we have now are a few chains such as Federated, Belks,
Target, May Company, Penny's, Sears and Montgomery Ward, to name the most
prevalent ones. What has taken the place of the many department stores that
were in most cities are the "category killers" such as Wal-Mart and Office
Depot and Costco, some chain theme stores, and then some catalogue houses.

Department stores are a trade show for the public. If one goes back in the
history of commerce, one would find that they grew to the size they are
because the started small and began to expand or buy out other small
retailers. It was an economy of size that prompted this growth.

If one wants to sell the department stores one should be aware of is that
the bigger the chain, the harder bargain they drive. They are, they believe,
rightly or wrongly, that they are in the catbird seat. Also, the bigger they
are the less open they are to new lines. They look to lines that are well
established in their industry or merchandise category. That means that they
expect their suppliers to do the advertising and promotion that will make
the public aware of the name and/or items.

A few will look for lines or items that are "blind" in that they have no
established, in the publics' minds, suggested retail price. They are looking
for long mark-up items that they can run at that price for a time and if the
situation warrants it, offer it at a discount and still have some mark-up in
it.

The "bust" aspect of selling to these big operations is that they will take
some unauthorized discounts and other advantages such as taking 9 months to
pay the invoice and still take the cash discount; they will take
advertising, freight, shrinkage and anticipation discounts even if they are
not warranted. This can come to as much as 15% to 20% of the invoice. The
attitude being that if you want to sell them that is the price you pay them
for them to pay you.

Catalogue houses and department stores that have catalogues do it
differently. Here, they don't buy stock. They buy, most often, enough to
cover emergencies. They expect the vendor to have enough on hand to take
care of the mail orders as they come into the mail order office. Besides
which, they will expect the vendor to pay for their share of the cost of
producing the catalogue.

This means that anyone jumping into this fray needs to have their "terms
and conditions of sale" well spelled out and to make sure that it is part of
their price lists. It may even call for several versions of one's prices.
Some firms want the price to include such bells and whistles as shrinkage,
advertising and freight allowances while others want "net, net, net" prices
without all the frills and then they'll take them off as described above.
One of any buyer's responsibilities is to spend their firm's money as
efficiently as possible . . . so when one sees these things happening, while
it may not be pretty, they are just doing their job.

But, don't despair, selling to retailers is not all bad. It can look rosy.
In some communities, one can find a few local or small chain stores, but
they are a dying breed. Lastly, while not department stores in the usual
sense of the word, there are the small multi-line stores, usually with a
theme, that are going into the rejuvenated shopping areas that are bursting
on the scene. And then, one shouldn't underestimate the small specialty
shops that dot the map. When they are all in the same vicinity they offer
among them the same variety that a department store offers the public. Many
are looking for the lines that the big stores do not offer as they can't
compete . . . some big stores are selling goods for the same as a small
retailer retails these goods for. Besides which, small stores pay faster and
don't take all the unauthorized discounts.

This is where reps come in. They have had to change their ways of working.
It used to be that they would spend the majority of their time with the big
chains. The little guys got whatever time was left over. In some cases, reps
would use sub-reps to call on the little stores. Well, it ain't that way
today. Some big firms such as Wal-Mart say that due to their volume they
don't need the rep to call on them and they want the commission usually paid
to the rep for themselves. That means that reps have to look for other ways
to make money. They do this by two methods: One, call on smaller retailers
and call on them more often; two, take on lines that the smaller retailers
are looking for.

So, as a supplier to the retail market, seek out the reps. Ask some stores
that might be potential candidates for your line who they believe is the
best rep that calls on them. Interview several reps, see what other lines
they have that would cause them to call on the same type of firm you believe
your goods could go into. They are your best bet for getting into all types
of stores both large and small, that is their profession. And, lastly, don't
begrudge them the commission you pay them. Without them, you wouldn't have
the exposure or sales you're enjoying."

Alan J. Zell, Ambassador Of Selling
Offers seminars, workshops and consulting on selling
and business topics that affect sales.
He can be reached at: azell@aol.com