Challenges, problems, and triumphs
-- from a manufacturer's perspective.
More Vendors Respond...
A dialog between vendors and a savvy but
by Various Industry Vendors & Lisa Kanak (September
(Note: Inspired – and worried – by an email from Lisa
Kanak, owner of The Cropper's Corner in Fredericksburg, VA. (www.thecropperscorner.com),
CLN sent emails to various industry veterans. Lisa's original
email is in the 9/6/04 edition of CLN. Various vendors,
retailers, and others responded. What follows are three new
responses that didn't reach CLN in time. Following them are
the earlier responses – and now Lisa's answers to them.
Retailers' responses are in Benny Da Buyer); the original CLN
email and responses from a scrapbook industry veteran and a top
designer are in Business-Wise.)
(New) Gretchen Denker Devinsky, Paper Love Designs
I wanted to give you my comments on the independent scrapbook
store article. As a small independent (mostly) scrapbook
manufacturer, this is a subject of vital interest to me.
Of course, I also deal with plenty of store and website owners
who are prudent businesspeople and run their stores/websites well.
Of these, the ones that seem to be enjoying the most success are the
larger ones (store sizes over 3,000 sq. ft.) that can stock a very
wide selection, plus have the space in their store for lots of
workspace for classes and crops which encourage a feeling of
One store that you might want to talk to (because she is doing
pretty well after little over a year in business) is Scrapbook
Territory in Berkeley, CA (www.scrapbookterritory.com).
She is a customer of mine and is also the store where I do my own
When I started my company, I did a lot of market research
concerning things like paper pack size. As a result, we sold our
paper in packs of 25 from the start. We're introducing stickers at MemoryTrends,
and those will be in sets of 25 as well. We charge a little more for
our paper (which is printed in the U.S. on fairly heavy cardstock)
and the same for our stickers and cardstock.
We also have a low minimum initial order and, for now, no minimum
reorder. Despite what these last two policies would have you think,
our average order size is over $300, for a product line that
currently contains only paper.
I'm all too aware of the ever-increasing pace of "NEW NEW
NEW!!" that is making it very difficult for small manufacturers
to introduce designs/products that will garner some cachet among
scrapbookers, thus driving sales and at the same time managing some
longevity, thus ensuring that the manufacturer can make some money
by selling all of a large paper or embellishment order (large enough
to get competitive pricing from printers, etc).
To increase my chances of success, I chose specific themes for my
paper that are always needed (travel, life event milestones, etc.).
I designed them in a style that's not especially hot or trendy, but
has remained popular for years (a vintage look, but not heavily
I also reach out to find customers beyond the independent
scrapbook or craft store – mainly higher-end stationery and gift
stores. These strategies have, so far, done well; we are growing
steadily (not wildly).
I'm not sure what 'universal truths' you can draw from any of
this - I just wanted to give you my perspective.
(New) Anonymous Vendor
It's no surprise that many small independents are
struggling. Most finance their inventory purchasing via credit
cards; of all my independent scrapbook customers, maybe 8% have
applied for net-30 terms. The vast majority do not seem to know
their inventory levels well enough, or have the time to be
proactive, to reorder out-of-stock items unless they are reminded to
do it when they receive a catalog in the mail – or they just put
it off until the next trade show.
I make calls to my retailers two to four weeks after I've shipped
them an order to see how the paper is doing (and hopefully net a
reorder), and I can't tell you how many times I've been told
"Oh, I'm glad you called; your paper just flew off the shelf,
and I've been meaning to reorder it for two weeks!"
(New) Craig Curtis, Petersen Arne.
We, too, are seeing many independent scrapbook stores struggle in
this economy. I consistently see three issues that can make success
impossible: 1) under capitalization; 2) poor inventory
turn; and 3) poor cash flow management. As a distributor, I can
help a store with both 2 and 3. However, most independent stores are
wedded to the concept of "buying direct." Buying direct
without the correct guidelines can stress cash flow to the point
that the store becomes illiquid.
(New) Anonymous (Manufacturer's Rep in Great Britain).
Scrapbook products are flying over here. We're really having a
party, and I can speak for a number of leading manufacturers, as I
represent several in the UK. Although scrapbooking is doubling year
on year, it started from a very low base. It's only in the last
18-24 months that we've had product suitable for our taste.
However, the big sales are still to card-makers, who use the same
techniques and products as scrapbookers. I've never understood why
in the U.S., there is the demarcation between scrapbooking stores
and what you call "stamp stores." Why not put it all in
the mix and have stores which specialize in paper crafting; then
you'll pull in more customers and get the cross merchandising.
Regarding the paper pack quantities, retailers must realize the
cost of packaging and distribution. Do they want to pay 30% more per
sheet and buy fewer sheets?
We offer several lines in mixed packs only, but then you get the
comment that a few lines sell out straightaway, leaving the rest of
the pack to trickle through before the store can reorder the mixed
pack again. Suppliers hold thousands of SKU's. To add to them will
A suggestion: How about clusters of retailers get together and
pool their buying? Hey, they may even get to negotiate terms to help
them compete better with the big boxes. Maybe this happens already
in the US. The products these days are very inexpensive. Smaller
packs will only put up prices. I doubt if anyone other than
packaging companies would want this.
(Old) David Wilke, Paper Adventures.
David informed CLN that Paper Adventures will introduce
new papers at this month's MemoryTrends show (booth #528) in
Las Vegas – in packs of 25s instead of 50s. It was already in the
works, David told CLN, because he had heard similar
complaints from other retailers.
(New) Lisa's Answer.
I (and many of my retailer friends) applaud the work of vendors
like Paper Adventures, Leisure Arts, Hot Off the Press, EK Success,
Chatterbox, and others who are moving to packages of 25 for papers.
This will be an enormous help, and it will also move orders for
Paper Adventures higher on my "to buy" list; they are now
a "Must See" for me at Memory Trends.
(Old) Sandra Joseph, Reminders of Faith.
(Note. Sandra is the former executive director of the
Memories Community. Reminders of Faith sells a variety of scrapbook
supplies and books with religious themes.)
I have always (and will always) insist that the small retailers
have to understand how to market to women. Recently in The July
issue of CNA magazine there was an interview with Brenda
Lugannani who just left Michaels' management. I thought her comments
were excellent and represented what is missing in so many small
"We have to embrace and understand the craft customer who
yearns to be successful. We can capture her for a short time with
great price or interesting items, but to capture her heart, we have
to embrace her. We have to care for her. We have to build her a
community made up of real people who identify with her – and we
have to invite her to join it."
I love the fact that Brenda said that we have to care for her;
that is crucial and something the bigger stores will not be able to
do. Also, understanding the niche markets will bring the smaller
retailer their core customers. All of this is relational marketing
which the smaller retailer must have an understanding of.
I know that Reminders of Faith is willing to work with our
retailers to accommodate their ordering needs; it is extra work for
us, but we need and want these stores to succeed. Very often stores
do not tell us of their needs when they cannot meet the ordering
(Just the other day, we found out that a store within a 30-mile
radius of our warehouse jointly ordered with another store in NY; in
other words, we shipped an order to NY which that store owner split
and then sent back down to western PA to this store. Another thing
to consider here is that the western PA store is not on our Internet
listing of stores – which could be a great marketing tool for
them. We would have been more than glad to accommodate this store by
filling a smaller order and figuring out a cheap way to get it to
Now we are doing a major program for a Pittsburgh radio station
and since we had no idea this store had our products, we were not
Tell the stores to ask vendors for what will work for them.
(Old) Kathy Brundage, Reminders of Faith.
1. Develop a relationship with the smaller manufacturer (such
as Reminders of Faith) who will accept smaller orders and listen to
the store's needs.
2. Have an in-store designer who can work with the new
products to show how to use them simply.
3. Find a new niche in your area that hasn't been emphasized
– the home school market, the teenage market – teens who have
money and love to be creative, etc.
4. Learn how to creatively cross-market, papers and books
that compliment in a unique display instead of on the same racks.
Have a store showcase that gets rotated to show off a new item(s)
every month, then a bulletin board with pictures of the past
"showcases": More ideas to stimulate the buyer.
(New) Lisa's Answer.
I also appreciate the willingness of companies like Reminders of
the Faith to work with independent retailers to better accommodate
our needs. But they probably shouldn't be "shocked" by the
local store's decision; the owner probably didn't know, or feel like
she could even ask for a "favor."
After all, order minimums are just that, order minimums. It's a
fact that most vendors won't work with retailers; it's a "take
it or leave it" approach. The minimums should be set to reach
the maximum number of stores with the minimum amount of impact to
Manufacturer OR Retailer.
There is no way a manufacturer can hope to accommodate all the
needs of every independent retailer, but they can make it easier.
Packs of 25 for printed papers, and packaged stickers help do just
Just keep in mind that even with a pack of 25, you're still going
to have people who "need" less, and will still split to
get less. Perhaps as a part of your retailer website you could
direct individuals to a place like www.scrapbookmanufacturers.com,
where there is a forum to create splits. You could let them know
that such a feature exists with groups like Crafter's Home, too.
The important thing is for manufacturers and retailers to work
together, create dialog, and both be willing to "give". As
long as the industry remains "us" and "them" --
we aren't going to solve anything.
(Old) Anonymous. (Major manufacturer).
For us it's a very timely topic as we continue to push the
envelope on new product ideas and techniques that could help some of
the independent scrapbook retailers. I have no particular order to
our collective thoughts. Use them however you see fit.
1. The key for any business is maximizing the cash return on
cash investment, not necessarily having the most inventory or best
price. The Hallmark card story is an excellent example and helps
explain why cards cost so much. Hallmark figured it out with their
marketing. Minimums are a tough challenge for all of us. A
majority of the products don't turn, but a variety is mandatory for
consumers. It's very difficult for manufacturers, whether domestic
or overseas, to affordably make minimum production quantities or
ship ideal retail minimums and not pass the handling costs of this
along to the consumer.
The cost comes in the form of higher unit cost when dealing in
volumes that are less than optimal (for producing or handling) or
higher cash inventory investment with low unit cost when buying at
volumes that are optimal (from a production or handling cost). The
chains have the same problem as independents. In spite of their
size, they don't always reach the optimal minimums to enable a lower
2. Knowing the consumer base is critical to making the bet on
how you go about expending cash available to make purchases. Each
store has to develop and continually re-develop its sources of cash
generation. This enables the business to dabble in other ideas.
Although it seems that the scrapbook consumer is always looking for
new, the retailer must figure out what the basic supplies for their
consumer base are and exploit this to the max – and don't stop
there; keep looking for other niches to exploit.
3. Don't fall in love with a hot trend for too long. Look for
the signs of slowing and de-emphasize and move on. Inherent in all
this is willingness to experiment with a variety of offerings.
Independents can do it much quicker than any chain can!
4. A lot of independent scrapbook stores do not appear to
know how to "buy smart" and calculate retail sell-through
and inventory turn. Unlike many industries, distributors are
available. This can really assist retailers in their inventory
5. There are many affordable computer solutions to accurately
track movement of inventory and profitable vs. unprofitable items.
Independents should challenge themselves to maintain this for their
business. It doesn't have to be a complex system, but it has to be a
6. Independents should use their in store classes to learn
rather than teach. The consumer invariably "figures things
out" that makes something more achievable or easier to do. Pay
great attention to what's going on there.
(New) Lisa's Answer.
Unfortunately, the one from the Anonymous "Major
Manufacturer" is pretty much the typical response retailers
The typical major manufacturer pours thousands of dollars into
"new" papers each year – for design, printing, and
promotion. They have an image and have created demand for their
products. In order to create a line of papers and embellishments
with a price point consumers are willing to pay, it does take large
quantities. No one disputes that.
However, there IS a happy medium. Scrapbook retailers do
"know" their customers. The basic supplies for our
consumer base include albums, cardstock, adhesives, and the black
pen. These are pretty much it. A few other things might be lumped
into that group, such as eyelets, brads, perhaps slide mounts, and
8.5x11 vellum for journaling – but other than that there are no
universal products that people buy over and over again.
And, unlike the assertion by Anonymous, most retailers don't
"fall in love" with a hot trend. We usually have it forced
down our throats. Demand is created by heavy promotional activities
by major manufacturers. In order to attempt to satisfy the hard-core
artistic scrapper, retailers wind up buying a product they neither
like nor want. We sell a few, and don't re-order them. They allow it
to sit around too long perhaps because they don't want to take a
bath. Rough edges exist on the when to clear out SKU's for every
retailer -- but they don't usually hang onto something because they
In my store, I do have some things that have worn out their
welcome. But depth requirements cause these problems: a) I
have more of certain products that aren't selling than I have
clearance space to put it; and b) at clearance prices, I can
only afford to replace two-thirds of what I used to have (again due
to depth requirements), which means I get more "white
space" to use creatively – and also means my customer has
less product to choose from.
This next comment completely skirted the issue I raised in my
"A lot of independent scrapbook stores do not appear to know
how to "buy smart" and calculate retail sell-through and
inventory turn. Unlike many industries, distributors are available.
This can really assist retailers in their inventory
This is a total cop-out, and the manufacturers know it.
Distributors are great for filling in gaps, such as: I ran out of
black cardstock because someone cleaned me out of 100 sheets for a
special project, so let me order my Raven Black from Roger's
Wholesale this time, because I just got my Bazzill order in last
Here are some facts about distributors:
1. Distributors DON'T break down paper packs. If the
manufacturer packages it in 50s, the distributor sells it in 50s.
2. Distributors DON'T break down sticker rolls. If the
manufacturer packages rolls in 50s, the distributor sells it in 50s.
3. Distributors DON'T break out Packs. If the manufacturer
sells it as a pack of 12, the distributor sells it as a pack of 12.
4. Distributors DON'T necessarily carry either the entire
lines or the latest and greatest.
I don't get any break on DEPTH of product by ordering the
Doodlebug line through Notions, or ordering the Doodlebug line
through Doodlebug. I either have to order less, work out a split, or
DEPTH is the major problem. It is product DEPTH that affects
profitability. And distributors have not been the solution to paper
and sticker DEPTH issue.
And no computer records can solve this because if the DEPTH issue
isn't answered, it's merely a numbers game. Sell half profitably,
25% at break even and 25% at a loss.
(Old) Don Guidi, Paper House Productions.
I have seen the similar thing happen over the years in the gift
industry as well. The card/gift industry has been flat to declining
during the past ten years. I think there are a few ways to improve
the business of small retailers (and it's in our best interest as
manufacturers to have strong retailers!). Inventory is the number
one area that needs improvement.
Managing inventory is the biggest challenge for all of us (small
independent retailer as well as a small independent manufacturer
like Paper House). In that area we share the same concerns as our
retail friends, yet there is also a paradox (small manufacturers
have the same issue in reverse because of retailer buying habits).
As a small manufacturer, often we have to do larger runs than we
want to in order to compete with larger paper companies who print
themselves (they own printing equipment) or in print China (we print
in USA with high quality paper stocks).
Often, retailers and consumers don't want to pay a premium price
for our quality (who does anymore?) but we won't sacrifice quality
for price; it's our competitive advantage when we get in front of
our customers and consumers. So we do larger runs to get the cost
down to what they will pay.
We also sell in paper in 50's to move our inventory faster so we
can introduce more new items for the next show – which the market
demands! If we sell in 25's, the small store usually orders once and
moves on to something new, so I'm left with extra stock of the line
just introduced and find myself in the same boat as your complaining
The answer to this problem is balance in inventory and in
Small retailers need to work with all companies to keep in stock
the basic, good selling items; about 70% of their inventory should
be in these products, and they should keep them in stock for at
least as long as they sell well by the turn standards of the
particular store. Ironically, Michaels is famous for this approach
and you see how well they have performed.
The independents also can experiment with new items, but only
about 30% of their inventory to keep the assortments fresh and on
trend. If they could do this, manufacturers could keep most SKU's
active longer to amortize the cost of development and help deplete
their inventory faster. The trendy new stuff can be managed by a
lower, 25-count putup's and smaller initial runs by manufacturers
(which I would be happy to do since I'm making money on basic good
sellers). Thus, all parties achieve a balance in their inventory
that lets all of us make money while keeping new things in the
Expectations need to be balanced by the store to the consumer
that we don't need the entire store to be new every three months. We
are a world of ADD shoppers where what was introduced last month is
"old" and something needs to follow up right away. No one
can make money if this continues.
Paper House has been in business for 21 years by not falling into
the trendy trap, yet staying fresh by selectively offering new
products during the year. Many of our best greeting cards have been
in the line for more than 10 years. A sunflower or a daisy is
timeless, isn't it! We are trying to achieve the same timelessness
in scrapbooking with Oz, florals, pets, travel, and sports as our
main focus. These themes are always needed and if we keep them
fresh, we will do well for years to come in scrapbooking.
Retailers should also be loyal to companies who have always
performed well for them and keep open-to-buy for these companies
always ready. It's easy to go to a show and get caught up in new and
forget that new doesn't mean a guaranteed sale! In fact, SKU's with
a good run rate over time tend to sell well for many years (as seen
is chains like Michaels). Support your existing companies with
reorders on good selling items and your good companies will reward
you with more innovative products from the profits they made on the
last products they produced and sold repeatedly.
(New) Lisa's Answer.
As retailers, most of us do understand that in order for
manufacturers to survive, they have to turn inventory as well. The
manufacturing end is dog-eat-dog. However, there has to be another
way to skin this cat (so-to-speak).
Manufacturers and retailers know that the consumers demand new
products all the time. They purchase an item once and then move on
to the next thing; this is especially true for themed papers and
stickers, less so for generic papers and stickers (plaids, stripes,
gingham, florals, etc.).
Here are OUR suggestions:
1. Don't overwhelm with TONS of paper and embellishments,
especially for themed groups. Keep an odd grouping of papers (say
three or five). In most (but not all) cases, any themed line (cat,
dog, sports, baby, etc.) gets to be overwhelming when there are more
than five papers in the line.
Then, add the embellishments; two or three sticker modules (main,
border/accent, alphabet), and two or three specialty modules. That
pretty much covers it.
2. Do pack in 25s. I bet you will find more stores wanting to
purchase from you – and will possibly even turn more paper.
Re-ordering is another ball game altogether. Many stores can't or
won't re-order ever.You won't be able to change that. The question
is, how many MORE stores will purchase from you in packs of 25?
Themed paper is good and bad. Stores NEED to carry it, but
thematic papers and stickers are the ones that "go old"
Currently, it takes us five-six months to turn a pack of 50 (our
store is 4,000+ sq. ft. -- and retail space is 2,700 with annual
sales well above national average). Chances are close to zero we'll
reorder the same themed paper (other than Disney and
military) any time soon and about 50-50 that we'll re-order a
handful of embellishments (other than Disney and military).
However, it is important to note that roughly half of our themed
paper was gone in six weeks -- with little or no discounting. So, at
25s, I can place an order for new themed paper every two-three
months. New isn't always better. However, if I sell through paper --
rotate something else in for a two-three months, I can re-order an
"old" paper without people really noticing. In fact, since
there are really only four to six vendors who have "pet"
lines I like, I'd probably wind up buying 75-100 sheets in 12 months
of the very same papers I would only have purchased 50 of before.
The same is true for sports, too, and baby.
The question is, why is this "better" for
manufacturers? I'd wager that while they might not sell more paper
in the short run, they would sell to more stores, increase their
visibility in the marketplace, and help to generate more demand and
This quote baffles me a bit though: "Small retailers need to
work with all companies to keep in stock the basic, good selling
items; about 70% of their inventory should be in these products, and
they should keep them in stock for at least as long as they sell
well by the turn standards of the particular store. Ironically,
Michaels is famous for this approach and you see how well they have
There simply isn't 70% of the scrapbook market that would be
considered "good selling items." A store that is comprised
of 70% of "must haves" (cardstock, albums, and adhesives)
is dead in the water. Unlike Michael's, people come to me for
variety in quality scrapbook product. They go to Micahel's for a
However, I DO believe that the industry needs to change its
behavior, before we put ourselves out of business.
I think the frenetic pace of products being produced is actually
doing the industry a disservice. I believe it would be better for
manufacturers to introduce fewer varieties of printed papers -- with
selective embellishments, and find ways to "re-invigorate"
older lines through add-ons. Here's an example:
K&Company is my store's #1 best selling line (roughly 15% of
my sales come from this one company alone).
We've been selling a number of K&C's papers for two years.
Only a few lines have been slimmed down or discontinued; many are
regularly re-ordered every three months. How do they do it?
In the last two years they added "new" embellishments
to "old" paper lines. Gave everything a fresh face – and
it sells. It's always the first booth we visit at the trade shows.
And yes, their printed flat papers are sold in 50s, but this is
also a non-thematic paper with classic colors and designs. Nothing
faddish about it. We have found some of the same to be true of Laura
Ashley (EK), Chatterbox, (sold in 25s), and are hoping to see
similar results with Anna Griffin and Doodlebug.
However, I should note that had Anna Giffin and Doodlebug been
available in packs of 25 and packaged stickers, we would have taken
the plunge on those entire lines back in February. I have the
space), but due to budgetary constraints, I have had to wait and
wait and wait.
And, where there is one store "waiting" for the money
to purchase a particular line, there are always more retailers
We do need to show some loyalty to manufacturers; develop those
relationships and continue to build upon them. Here's what gets MY
Good selling products; good customer service; things I can pass
on to my customers (make-it/take-it ideas; class ideas;
articles/education I can re-print in my newsletters; and of course,
If I have a good experience with a company, I'm very likely to
re-order. Perhaps not exactly the same thing twice (although that
does happen, more so when I can purchase in 25s than 50s), but they
will be on my radar screen before hitting the show floor.
Right now, we only have a couple of vendors on our "do not
buy" list. They lost our business awhile ago because they
wouldn't make something right. So, I'm unwilling to take a chance on
There is another vendor that just doesn't sell well for us. We
love the lines, but they just don't move, even with classes,
contests, samples, demos, etc. I'd love to throw the dice, but a 50
sheets-per-pack gamble is just too much. But in 25's, I'd chance it.
But here's a novel idea: TEST it!
As a former senior marketing executive in the direct mail world,
we ALWAYS tested various facets of our design – content, artwork,
color, lists, size, etc. Because we knew that a half-percent change
could mean the difference between a huge winner and a loser.
Change is never easy, and it may be more than a small
manufacturer can deal with. So, why not work with a group of stores,
say Crafter's Home, and do the following:
1. Choose one themed line (pets, sports, baby, etc.)
2. Poll the membership; ask them how many of them would
purchase the complete Line X, if the papers were sold in 25's and
stickers sold packaged in sets of 12, etc.
3. Run the numbers -- do you sell more paper or less?
4. If the poll comes out favorable, then make a bona-fide
offer to the group. If the numbers "play well" with the
test market, roll the concept out to all stores.
I mentioned earlier that I have room for more paper, but can't
afford to bring it in. In fact, I could literally DOUBLE my paper
selections without making any aisle an inch smaller. And you know
what? There are other stores in the exact same boat as me.
I am truly interested in creating a dialog because I believe that
by discussing the problems facing the industry we can combat them
So much of what we are saying and doing is because "that's
the way it's always been done." It's time to challenge our
notions of what works, and see if we can tame the scrapbook industry
beast another way.
Sink or swim, the retailer's success will depend upon the
response from the manufacturers – and the manufacturer's success
will depend upon the retailer.
(Note: To read previous Vinny Da Vendor columns, click on
the titles in the right-hand column.)