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Creative Leisure News
2677 Ashley Ct.
Tremont, IL 61568
Phone: 309-925-5593
Fax: 309-925-9068
Email: mike@clnonline.com
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Challenges, problems, and triumphs -- from a manufacturer's perspective. Complaining About Short-Shipment Penalties Who pays retail? The vendor? by Name Withheld (October 6, 2008) (Note: In the previous issue CLN published a report of (Note: CLN received a note from a major industry vendor. He had received a letter from Jo-Ann, which he had attached in his note to CLN. Here's the part of the Jo-Ann letter that inspired him to write: "Short Shipments: A short shipment penalty will be automatically deducted from a Vendor's payment if the quantity of any given Article received is short by more than 3%. The short shipment penalty will be calculated as the total number of units short multiplied by the retail price of that specific article. Please note that the 3% tolerance is included in the total number of units used for the calculation of short shipment penalty. For example: Originally ordered 1,000 unties of an Article at a retail of $4.99 but the Vendor shipped 950. Short shipment penalty would be $249.50 (50 X $4.99). Short shipment penalties will be automatically deducted from the Vendor's next payment, unless vendor reimbursement has been received." This is just another example of retailers making it more difficult for vendors to make any money. It's amazing that they want to charge the vendors the retail price on items that you short ship them – not the margin that they make, but the full retail price. A big part of having the products to ship them depends on their ability to give us an accurate forecast of what they are going to sell. We can't maintain an infinite amount of product in inventory just in case the retailer underestimates how much he'll need. Funny, I thought retailers were supposed to collect the retail price from consumers, not their vendors. At least they didn't start the letter with Dear Vendor Partners. (Note: To read previous "Vinny" columns, click on the titles in the right-hand column. To respond to this column or comment on any other industry issues, email CLN at mike@clnonline.com.) xxx |
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