Archive for May, 2009

Independent Shoe Designer plans to launch Men’s Boot on shoestring budget – Mission Impossible or Definitely Achievable?

Thursday, May 21st, 2009

Reprint of a thread post on Linked In
http://www.linkedin.com/groupAnswers?viewQuestionAndAnswers&discussionID=3559287&gid=1840289&commentID=3755921&trk=view_disc

I’ve been working on this project for quite sometime but I’m not sure of the best way to go about getting my product in to boutiques given the current climate. Any suggestions would be greatly appreciated.

Mark Charles Client Services Account Manager – No Fluff Recruitment
 
Money is tight for Retailers (and most businesses) so if you can fund the stock then you could try the Concession route or offer the retailers the goods on sale or return.

Obviously it’s cheap to set up a website with an ‘on-line’ shop to sell the stock. You could also link this in with an eBay shop as this will give immediate access to 10m+ UK customers.

You can try and come up with some ‘viral marketing’ to get the brand known. A good/funny/odd YouTube video can work well – How about some Redneck with southern American drawl saying ‘Assholes are …. Assholes are… etc then cuts to your boots with English accent saying that ‘Our Soles are made from finest leather… Our Soles….etc

Getting samples into the magazines, newspapers can get you good ‘free’ publicity and credibility.

Good Luck

Tony Heywood

lol….absolutely genius, really appreciate your feedback mate! Especially the viral marketing idea, very funny – I will definitely work on some concepts for a video.

Regarding the “Sale or Return” option, I have to say, I am in favor of this route as I think it will be hard to get indies to buy in to an unknown product in this economic climate.

My concern is that without them parting with money initially, how keen will they be to push the product.

Which I guess leads me on to my next question. How effective do you think POS Merchandise is? I’m concerned about producing something that is effective and unique, yet at the same time fits in with the shops theme.

Also, what do you think about getting celebrities to promote the brand? I have to admit, it seems quite risky with such limited stock to work with and no guarantee that they will even wear it, much less get photographed wearing it.

Mark Charles
 

POS is good and helps enforce the brand but it depends how much marketing spend there is. Wouldn’t be my priority as although it helps it’s probably not a deal breaker for shops to stock your items.

Celebrity endorcements do work (sadly a sign of our times!) however shoes don’t get as much visual coverage on the ‘red carpet’ as other items of clothing. You could send samples to some celebs and claim in your PR that X, Y & Z have our boots (doesn’t mean to say that they wear them!)

Tony Heywood

Retail Troubleshooter
Rescue and Recovery Consultant
www.gilcrest.com
http://www.linkedin.com/in/tonyheywood2

In the hands of the Credit Insurers

Monday, May 11th, 2009

The British Retail Consortium has reported that more than 40% of small and medium businesses believe the credit insurance situation has undermined their ability to trade.  It is also widely believed that the withdrawal of credit insurance, although not responsible, certainly accelerated the demise of the likes of Woolworths and Bay Trading.

In the recent budget the Government heralded ‘£5 billion’ of credit insurance assistance. However, in common with many of this Government’s initiatives the detail delivers far less than the headline suggests.

Firstly, any business affected by withdrawal or reduction of credit limits prior to 1st April 2009  receives NO assistance. Withdrawal of credit after 1st April 2009 receives NO assistance. However, if cover is reduced after 1st April, top up cover can be purchased for 6 months for a fee of 2%. The scheme runs from 1st May to 31st December 2009.

Oh, and by the way, the Government will only MATCH the current insurance, so if your cover is reduced from £100k to £10k the government will only top it up to £20k!

So you can see that the headlines read well but reality is that few retailers will benefit.

Digressing slightly, of the £2,000 offered on new cars when you scrap your over 10 year old existing car only £1000 is offered by the Government. The balance is offered by the manufacturer who will only reduce the fabulous discounts currently being offered. But then, if you buy, for example, a new Ford Fiesta, for say £10,000 reduced from £12,000 the Government receives back £1,304 in VAT!! So Alister Darling gets over £300 which he wouldn’t get if you traded your old banger for a used car. “It’s magic” as Paul Daniels would say.

So, given that there is only limited help from the Government what can you do to ensure your supply lines are not affected by nervous insurers?

Firstly try and set up a dialogue with the insurers. Let them know that you’re happy to answer any of their questions. Try to reassure them that you are a safe, reliable business. Don’t on any account misinform them or try to b*llsh*t them that you’re doing fantastic if you’re clearly not.

 Secondly, make sure all your accounts are filed promptly even if they are not too good as late filing often make Insurers assume the worst.

Thirdly, don’t give any cause for any of your suppliers to make a claim for non-payment even if you have genuine grievances. Ensure that you get disputes for non-delivery, returns or quality issues resolved (as far as you possibly can) as the accounts department may be informing the insurers of an overdue account whilst the sales departments are sitting on your credit note authorisations.

Don’t forget that no matter how good an account you may be or how long you’ve had a good relationship with a supplier, if cover is withdrawn they may have no alternative but to demand prepayment.

 Tony Heywood – Gilcrest Services Ltd
Retail Troubleshooter
Rescue and Recovery Consultant
www.gilcrest.com
www.linkedin.com/in/tonyheywood2

Comments (4)

Igor Zax Founder of Tenzor Ltd.-consulting and interim services for corporate turnarounds

Tony,

Just a small note- to the best of my knowledge the particular scheme is only covering reduction of cover through providing top up, not complete withdraw. My guess is most of the cases you refer to the cover is completely withdrawned, so the scheme would not help…
Tony Heywood  Retail Troubleshooter – Rescue and Recovery Consultant – Gilcrest Services Ltd – e sell it

Hi Igor
 
You are correct – it only covers reduction after 1st April and then only tops up to a max of the existing cover. So if cover is reduced to 30% it will only bring it up to 60%.

My feeling is, that it is likely to be of little help to the industry and is another Government initiative which is big on headlines but of little actual help.

I was hoping that I may be wrong but the lack of replies from here and other requests re-enforces my belief.

Igor Zax Founder of Tenzor Ltd.-consulting and interim services for corporate turnarounds

Hi Tony,

I guess one shall question the relevancy of the scheme for your sector. Firstly, it is for sellers based in UK- so unless the retailer buys from UK company (manufacturer if these still exist or distributor) it is not relevant at all.

Secondly, it only applies to whole turnover policy. What it is likely to mean is that there may be an incentive for insurer to actually reduce the cover, as they are still being paid on all sales, get less exposure and plus might charge a commission for administrating government policy on top of the 2% cost. This may also substantially increase cost to supplier, that is likely to be passed to retailer.

Could not agree more with the point in your blog about importance of communication with insurers. This would focus on three areas- complete and timely information (obvious point), getting the right interpretation (often the underwriter do not understand enough about the industry or company specific factors) and getting to the right level (somebody who can make an exception to general mechanical approach based on additional facts). Two latter points require a lot of credibility that one needs to build.

Lastly, do not assume supplier cannot take uninsured risk. Unless the insurance is tight to their own financing (such as invoice discounting or factoring), there is no reason they cannot take uninsured risk. The credit controller may think they cannot- CEO might have a different view if you are a very important customer AND you can provide reasonable comfort that you will be able to pay.