Betty Buyer Jan/Feb 2010

YOUR SWELL HAS SHRUNK! And it’s not “swell” at all, Sammy!
BY BETTY BUYER
Hey Sammy, how come your swell allowances have shrunk? It’s not because there’s less product damage or out-of-codes. Could this be one of your strategies to raise money during the recession? If you spent as much time fixing your production and logistics problems as you do thinking up ways to pay us less, you’d be richer than Bill Gates. But here I am, paying my way with reclamation centers on a volume basis, when you cut back on payments. That’s just “swell.”

Your latest gambit is a real hoot. You’ve found “new data” showing that our return rate is higher than at your leading retail partners. That’d be great info we could use to help improve our operation — we love to compare ourselves against benchmarks. But it’s obvious that your “leading retail partner” is from another channel of trade — one with high volume on limited SKUs. Come on, Sammy! Be fair. (And by the way, we scan your damage before it goes to reclamation, but you rarely ask for that information. It’s better than any of the audits you get.) We both benefit when we carry more variety from your company, even though this brings down average volume per item. You like how we carry more of your SKUs, but then you cover the sins of your products as though you are dealing with a retailer that carries only your top items. Over the years we’ve revised our unsaleables claims based upon reasonable demands. For example; we agree that you should not pay for product we damage. Nor should you pay more as a percent than what actually occurs in real dollars. After all, a swell allowance makes life easier and reduces costs for both of us.

So here’s what I propose:
1 You make your packaging strong enough to hold up from your plant to our dock. Some sustainability initiatives are hurting packaging integrity.
2 We set up a system to account for hidden damage. (We have agreed that the cost is significant for both of us if we have to review every case upon delivery or acceptance.)
3 Products that go out-of-date still need to be managed, and we need to partner on this. (As you have steadily reduced your in-store sales support over the past decade, you’ve relied more on us stocking and rotating products correctly. As with other areas of our business, when you show us that WE are not doing our part, we will consider other alternatives.)
4 We should verify actual damage/unsaleables costs versus the established swell allowance on a regular basis to protect both of our interests. You can participate in this analysis to gain whatever level of confidence you need.

NOT SO FAST, BETTY!

BY SAMMY SELLER

Betty, have you lost your mind? You have the unmitigated gall to complain to me about what we pay you in swell allowances when you charge me outrageous fees — totally unrelated to any sort of reality — for slotting, demos, “unauthorized POS” or a truck that backs up to your dock 90 seconds late? Fact is, Betty, we went to swell allowances after your unsaleables deductions got out of control. And as for our data on our leading trading partners, I know that we break our data out by channel, but I can’t speak for others. Sounds like your Walmart obsession is acting up again, though. Get a grip, Betty. And next time you want to throw a stone, remember that you live in a glass house.

Read the December Edition of Betty Buyer

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