THE STORY OF RETAIL

THE MAIL ORDER AGE IS UPON US AND BRICK RETAIL STORES MAY GO BY THE WAYSIDE

Over the weekend I read that Nike expects 50% yes 50% of its revenue will come from digital marketing sales. They have sent letters to several employees who will be terminated because of the digital direction they are taking.

Today I read that VF Corporation owner of The North Face and several other well-known brands will be putting more emphasis on their online sales.

There are several more or possibly many more companies that have been selling their products to retail stores that have web sites that they are paying more attention too and have online sales now.

The reason that this is happening is a result of so many retail stores having shut down unfortunately because of the coronavirus. However, long term even if the virus is held in check this method of selling product is not going to change.

I have learned that these companies as well as others like Columbia don’t actually sell their products to the retailers but deliver them on consignment.

These companies may generate an invoice but the dating if it appears on the invoice is just a formality. Since these companies are publicly traded do the stockholders know this.

Whenever I read about the many companies serving the outdoor market- place I am really astounded by the dollar volume they report. Of course, the publicly traded companies see their stock value increase as a result of the numbers reported.

Many years ago, I received a call from the camping buyer for Sports Authority a chain store with 90 stores, they eventually were sold and they increased their numbers to 400 or more stores.

Anyway, they had just opened store number 90 in Anchorage Alaska. They ordered about 15 bags. I shipped them thinking I could wind up getting orders for as many as 90 stores. My invoice dating read “1/10 net 30” which meant they could take a one percent discount if paid in 10 days or all when paid in 30 days. 10 days came and went, 30 days came and went, at 105 days I received payment. The amount was $2005.00. About 2 weeks later I receive a call from the buyer wanting to place a second order. I have no idea how many bags he wanted because I told him unless I had a written commitment from the CFO stating I would be paid according to my 30-day terms I would not accept the order. He told me the CFO wouldn’t do that, so I said goodbye.

I am probably the only vendor he ever dealt with that took the position I did. But it was a lessen I have never forgotten. I then chose to stay away from reason I have stayed away from retailers ever since. I continued to build Wiggy’s as a mail order company.

These large companies do not sell their products to the retailers, tell the retailers what they will be putting in the stores for each season, similar to the way drug stores and supermarkets work, the so-called salesman/woman stocks the shelves with their product as is necessary. That is why they the retailers courting the outdoor marketplace are now referred to as “drug stores”, because they seem to carry everything, good, bad, or indifferent.

A few years ago, via a good friend who knew the hole chain of command at rei tried to sell sleeping bags to them. We knew from people on the inside they have had for quite sometime a 40 percent return rate of sleeping bags. so, I said buy my bags and if you get returns for any reason send them back to me and I’ll replace them. That offer fell on deaf ears for some reason. Was it because if they sold my bags, they would take over the volume that was held by all of the other brands combined or the fact that I would want to be paid on time as per my terms?

Rei like ll bean couldn’t stay as mail order companies they just had to make deals with cities like Cabela’s did and also their parent bass pro and now that these retailers are for the most part downsizing if not shutting some locations down it becomes a drain on their finances. Of course, as their finances deteriorate, they hold back paying their “vendors” of the funds collected from what they have sold.

Many of the companies like Nike use these retailers as where houses to hold inventory to sell. As far as I am concerned there are no longer retailers, people who at one time were considered merchandisers. There are only people at the top of the food chain making deals that in time will raise the market value of each company.

Today in my opinion penney’s is doomed as well as is macy’s. I grew up with macy’s and saw the window display every Christmas for close to 25 years, from childhood to adulthood.

I read about people taking over this position or that position from people who were in the position for 6 months to a year at some of these giant companies, but I believe it will be to no avail.

If companies that want to make products have the knowledge; I believe they are few and far between; they should start up manufacturing here in the USA as mail order companies. I do believe those at the top of the food chain are very much worried about their companies.