Retailer’s Perspective: The Ordering Process aka “What Can Go Wrong Will”

Hello Everyone,

In a previous Retailer’s Perspective post, I wrote about the viability of special order programs for boutiques and focused on how customer pick-up times and behaviors influence store policy, but I neglected to discuss another important factor in offering special orders:  manufacturer lead times.   A manufacturer’s policies and reputation impact which brands a store will work with and whether special orders are feasible.  As a result, today, I want to walk you through the seemingly straightforward process of placing purchase orders and discuss how and why problems arise.

Special orders starts with a common scenario:  An individual either physically visits the shops or consults via email and decides to order something we do not have in stock.  The person’s name, contact information, and order are then written in my mostly legible hand-writing on a sheet like this:

Customer_Order_Sheet

At this point, the easiest part of the entire process is over, and I am now responsible for obtaining the item(s) requested by the customer.  In a perfect world, all of our vendors would implement a back-end software system where retailers could place orders the same day and receive both a confirmation email and shipping information which includes tracking.  Within a couple of days, the item would arrive at the shop and be ready for its new home with the customer.  As all adults know by now, the real world and the perfect world rarely intersect. 

The Art of the Meeting Your Minimum

Most lingerie companies require all orders meet a minimum amount to decrease expenses for them, the warehouse, and the retailers.  Some minimums are low, such as six units, but others are upwards of $250.  A few manufacturers will relax their minimums for a fee, usually in the ballpark of $25.  Even if a company allows you to order a single item, often referred to as one-off ordering, a minimum shipping charge will apply and ranges from $7 to as high as $30.  On a small order, the final cost to the retailer of each item will be much higher because shipping costs cannot be absorbed across multiple products, thus creating a lower overall profit margin.  For some companies, reaching the minimum is never a problem because our turnover rate for the manufacturer is high.  Since Eveden sells Freya, Fantasie, Elomi, and Goddess which covers a huge expanse of sizes and styles, we often order from them weekly.  Other manufacturers, especially those offering specialty products like hosiery, shapewear, or lingerie, can take as long as eight weeks to reach the minimum order point.  When an individual wishes to order from one of these companies, we alert him or her to the time frame, or depending on the situation, order excess inventory to allow for the special order.  Interestingly enough, middle-ground companies which sell well but not consistently create more issues because we could hit our minimum in a week or it may take as much as three.

PO_Meme_1

One of the safest ways to meet a minimum in a pinch is to pull from items on your buying agenda, such as more sizes in an existing style, a new colorway, or even a soft trial of something new.  However, it’s hard to gauge when to place these orders and when to wait out sales, especially because we can only order above what we need so often without running into cash flow issues.  As a result, customers are typically called or email to let them know about delays.  A corollary complication to meeting minimum order requirements is when a customer orders an item immediately after an order has been placed.  Some companies can add items up to 24 hours later, but in other cases, that item is tacked onto the next order instead.

Writing & Submitting an Order

One of the joys (or curses) of business ownership is the need to handle multiple responsibilities, ranging in nature from generating marketing ideas to balancing the checkbook.  This quote sums up my view on said responsibilities perfectly:  “Details, details. Things to do. Things to get done. Don’t bother me with details, just tell me when they’re done.”  (Bonus points for knowing the reference).  I love running a business.  I love writing blogs.  I love doing bra fittings.  I also love planning purchases, researching bras, networking for the shop, decorating, and organizing.  Tedious detail-oriented work?  I do it, but I don’t love it.  Writing successful purchase orders—a pivotal component of any retail business—involves meticulous attention to detail.  Everything you and your customers need must be included with nothing left out, and every model number, color code, and size has to be precise and correct.  There have been times I rushed through assembling an order and wrote 8720 when I needed an 8740, even though the name of the style I wanted was correct, and I received the 8720s.  Some reps note the disparity and email me to confirm what I want.  General customer service, on the other hand, looks at the model number only and proceeds from there.  Even colors are not straightforward and require the exact written code.  Consequently, I may know what I need, but translating those needs to an Excel spreadsheet is mind-numbingly tedious for me.

Even the dogs get bored when I try to write purchase orders.
Even the dogs get bored when I try to write purchase orders.

Once the order is checked and rechecked against special orders sheets and sales, I email it either to a sales rep I work with directly or to the more general customer service.  Sales reps often note when items are back-ordered and provide exact dates for when they will be in stock.  Customer service may not.  On more than a dozen occasions, I did not know an item was back-ordered until my shipment arrived missing pieces.  At this point, I request an open orders report to see why items were not included, and even then, the answers can be vague.  Open orders reports are also essential to managing inventory.  Not only can they make sure all of your information was entered accurately, but they will also show you what items are missing from the system entirely.

A missing item creates enough headaches, but there’s also the opportunity for a larger problem, such as entire purchase order never making it into the system.  The email was missed, someone forgot to input it, etc.  Meanwhile, because not all companies offer you shipping information, you wait the appropriate amount of time for the order to arrive and nothing shows up.  A quick call to customer service yields a polite “I don’t see that order in our system,” leaving you behind on the time frame you gave customers.  The delay can also create long range problems, such as an item that was in stock at the original time of order is now unavailable for several months.  The 5th Rule of Retail Ownership dictates that these items are almost always paid for in advance by the customer or are time sensitive.

PO_Meme_2

Given my disdain for writing POs and the issues surrounding them, Cake Lingerie deserves serious praise.  Cake managed to accomplish something amazing in business:  They did something that makes total sense.  Hold onto your socks people:  Cake has a back-end system where you can select items to order like you would on a retailer’s website.  There are pictures and colors and sizes and prices and all manners of easiness.  Stuff that is out of stock is clearly marked with a date on when it will be back.  You can verify the order you submit, they send an email confirmation, AND they let you know when it ships by providing  a tracking number.  Mind blown!  In all fairness, as a computer programer, I know these systems costs serious money too, especially to be reliable and easy-to-navigate, but given some of the problems I and other retailers have had with other, much larger companies than Cake, you’d think they would invest here.

What Happens (or Doesn’t Happen) After Placing an Order

Ideally, once the order is entered (in completeness with no back-ordered items) into the system, it is sent to the warehouse for pick, and the warehouse then sends your merchandise to you.  In reality, there is credit hold.  Credit hold is exactly what it sounds like:  The manufacturer has cut you off because you’re either behind on payments or the current order takes you over a predefined limit.  Sometimes, this is your fault.  You have a bill you didn’t pay, or you ordered too much for your credit line.  Other times, it’s the company’s fault.  When you have a terms agreement with a vendor, you typically have a certain amount of time to pay for invoices, sometimes a shorter time if you want a small discount.  Typically, a credit card is maintained on file for your account, and payment is authorized for the invoices due.  However, there instances where this doesn’t happen because:

  • The account specialist does not receive your email or message authorizing payment.
  • The payment authorized is applied to the newest invoices instead of the oldest, which are due.
  • The payment is charged to your credit card but not actually applied to the account.
  • The payment is credited to another account not belonging to you.

I know what you’re wondering, and I’ll answer it honestly.  All of these instances have happened to us, and once the account is deemed on credit hold, getting out tacks on additional time.  Someone needs to audit the account to see what happened, and once the problem is corrected in finance, a message must be sent to customer service to release the hold.  In a best case scenario, this takes two days, but it can take as much as a week.

Other Things That Can (and Will) Go Wrong

  • The Weather:  Most of the warehouse for the companies we stock are located in New England, and when they have a brutal winter (as happens pretty often up there), shipments are delayed.  One year, a supplier had significant inventory damage which took months to recover.
  • Trade Shows:  Twice a year, the Curves Expo is held in New York and Las Vegas, and Curves is arguably the largest premier trade show for lingerie, sleepwear, and bras in the US.  Buyers across the nation have the opportunity to preview coming seasons and take advantage of trade show discounts on orders.  Because so many orders are placed during those months, customer service and processing times frequently slow down, and it’s more likely problems will pop up with your account.
  • Warehouse Shut Down:  Sometimes the warehouses are shut down for inventory counting while other times it is holiday related.  For example, Panache recently shut down the warehouse for end of year inventory, and it will not reopen until June 11th.  December holidays are another problem.  Many warehouses will shut down sometime before Christmas without reopening until after New Year’s.
  • Delayed Release:  Certain fashion styles have their expected ship dates pushed back while others may fall victim to quality issues and need to be recalled.  This becomes more of a problem for customers taking advantage of pre-ordering.
  • Customs:  Not all of our inventory is kept in a state-side warehouse, and customs processing time can delay shipments coming from the UK or Poland by a couple weeks.

College computer networking classes love to compare the way Internet works to the postal service, and after studying networking and working as a contractor for the post-office, I thought it was a miracle anything made it to where it needed to be.  Now, after having owned a retail store for several years, I am lumping purchase orders in with the Internet.  Most retailers are not trying to cause issues for customers and will go above and beyond when needed, sometimes buying products off other retailers and losing their profit margin.  Sometimes we are just at the mercy of our manufacturers, who themselves are at the mercy of other outside factors too.

Erica

 

Retailer’s Perspective: The Ordering Process aka “What Can Go Wrong Will”
Erica
Erica is a lover all things lingerie and is passionate about helping people find the bra which fits and flatters. Side passions include reading, writing, hiking, dairy-free food, walking her Jack Russell terrorists, and dying her hair everything from black to red.

8 thoughts on “Retailer’s Perspective: The Ordering Process aka “What Can Go Wrong Will”

    • Erica
      June 2, 2015 at 2:48 pm
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      I wanted to do a funny flow chart, but I ran out of time. It’s certainly not easy! 😀

      Reply
  • June 2, 2015 at 8:17 pm
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    Erica, I am glad to see you explaining this and hope it helps not only your customers, but you by gaining their understanding! My business and vendor list are small enough that, thank God, mishaps such as the ones you note are pretty rare (weather/shipping and “that order never arrived” are my biggest issues), but I worked for retailers of varying size during high school & college, including in management, and sometimes it’s a wonder anything arrived in our store! Even when I worked in the front office for a major auto supplier we’d run into similar issues on the back end—materials didn’t arrive, something was invoiced improperly resulting in a credit hold, you name it. It’s too bad, IMO, that more people don’t have such experiences and thus the understanding—the world is not the internet (no matter how it may seem), and we’re still ultimately dealing with people and nature all around.

    Anyhow, good cogent post, and I hope people read it and realize a little more what you have to deal with! 😉

    Also, I dearly wish some places would take handwritten-on-notebook-paper POs just scanned in and emailed. Why does that seem easier to me?!

    Reply
    • Erica
      June 3, 2015 at 12:52 pm
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      Thanks, Jen! It’s so funny because I really hadn’t worked retail before this, and it has certainly been an eye-opener. Most of my customers are shocked that we’re not always provided with a tracking number for shipments or sent some kind of confirmation email, but I’ve gotten used to it now. It’s funny you mention hand-written orders because I have thought the same thing with certain companies. I try to use Excel to save on printing costs for me, the manufacturers, and the sake of being a ecologically responsible. Then, I ran into this issue with Company X sending me the wrong sizes on half my order, and we figured out that when they were printing the excel sheets out and not watching the sizing bar. And what was the point of me trying to save paper costs again? 😀

      Reply
  • June 12, 2015 at 7:11 am
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    Oh wow! It’s great to see that I’m not the only company dealing with the ebbs and flows of ordering. Maybe we’ll all find the perfect process that takes some of the pain out of the process. I feel you sister! Write on!

    Reply
    • Erica
      June 12, 2015 at 12:03 pm
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      Hi Tonya! I imagine it’s a nightmare across every industry sometimes. 🙂 By the way, I am LOVING my necklace. It’s GORGEOUS!

      Reply

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