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Question Are your suppliers stealing your customers?

Discussion in 'Picture Framing Business Issues' started by charming, Aug 2, 2018.

  1. charming

    charming Grumbler

    For me this started about 12 -14 years ago when my wife was the sales rep for a Canadian poster company (Eurographics). At the time I was doing a lot of framing for the local movie/tv industry, and I thought it would be beneficial for her and the poster company to distribute (at my expense) a few of their catalogues.

    This worked well for awhile, until the poster company figured out they could sell the posters directly to, and accept orders directly from, my movie/tv customers, thus cutting me out of the picture. This action was followed shortly after by another poster company in the city (Canadian Art Prints).

    I have also caught red handed one of my suppliers eliminating the middleman (me) and accepting framing orders from the movie & tv industry in Vancouver. I have warned my suppliers that if they continue to do so, I will cancel my account immediately, and to their credit I have been given proof that they are good to their word.

    I just wonder how many times this is happening in our industry, how prevelant the practise is?
     
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  2. David Waldmann

    David Waldmann SGF, Supreme Grumble Framer

    Yes.

    Well, no.

    They were our suppliers, but aren't anymore.
     
    AaronF and Jim Miller like this.
  3. prospero

    prospero SPFG, Supreme Picture Framing God

    There is a current thread on the UKFF bemoaning a similar thing. Customers buying glass direct from suppliers
    and cutting the framer out of the loop. This sort of thing happens more and more. At one time suppliers had very
    rigid codes of practice but as business gets more competitive it all gets very dog-eat-dog.

    Once one company eases up then all the others have little choice but to follow.
     
  4. Jim Miller

    Jim Miller SPFG, Supreme Picture Framing God

    Yes, framing suppliers have been taking our customers for years. When asked, they used to lie to us, but many of them have been caught taking orders from our former customers. These days, one of the largest American distributors of framing supplies calls it "fulfillment". A prominent executive from that company told me that their local branch location would be pleased to fulfill my small frame shop's orders - from start to finish - while I go away on vacation, for example. I think I was supposed to be grateful.

    A local distributor was caught red-handed lying about taking orders from consumers, photographers, and others buying single frames or small quantities. Their wholesale business with framing shops quickly plummeted to the point of near-bankruptcy, and then one of the country's fastest-growing distributors purchased that long-established, locally-owned business and saved it. They're still taking our customers, but at least they're not lying to us about it now. No more pretenses.
     
    Last edited: Aug 3, 2018
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  5. Paul Cascio

    Paul Cascio SGF, Supreme Grumble Framer

    If you are buying from a supplier who is taking your customers, you need to switch suppliers. If you don't, then shame on you. If enough framers do this, the suppliers will find that they no longer have enough volume to buy moulding at distributor-level pricing.

    Switching suppliers is a pain, but it is what you absolutely must do to protect your business. We should also start naming these distributors by name. If they want to sell picture framing as a service, that's perfectly okay. However, they need to be honest about it so that the retailers and home-based businesses who buy from them can make an informed decision about whether to continue the relationship. And if they're doing it in a secretive manner, it's up to you to out them. If you're going to complain, then you need to do something about it.
     
    westman 2 and charming like this.
  6. David Waldmann

    David Waldmann SGF, Supreme Grumble Framer

    This is not an industry exclusive issue (as you may well have guessed).

    The reason I chimed in is because, as a framing supplier, we also have suppliers (lumber "wholesalers"). We have found some of those selling to our customers, and they are no longer our suppliers. It may be a slightly different scale - they aren't selling chops to mom and pops - but the principle is the same and I refuse to become part of the problem.
     
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  7. Jim Miller

    Jim Miller SPFG, Supreme Picture Framing God

    This advice seems to make sense, but for those of us who operate frame shops in markets with only one or two local framing suppliers, it is not always practical. And in many cases, such action could be vindictive and unwise, like cutting off your nose to spite your face.

    In any market, distribution is a capital-intensive business of time-and-place value. Our distributor-suppliers have had to deal with significant loss of business, just as we have. But one difference is that, while a small frame shop can turn on a dime, diversify, and adapt to shrinking business, a distributor may have hundreds of thousands (millions?) of dollars worth of inventory sitting on their shelves, and a serious lack of customers. How would they diversify? We do what we have to do to survive, and so do they. The days of business-relationship loyalty between suppliers and customers are gone, and not just in the framing market.

    Yes, we could stop buying from a local distributor that competes with us, but what assurance do we have that our new out-of-town supplier is not competing with their local frame shops? After all, most framing distributors are doing that now, so it may be very difficult or impossible to find a distributor that does not compete with local frame shops.

    In any case, the loss of quantity discounts & special arrangements, friendly cooperation, added shipping cost, and time delays enter into the equation. Cutting off an otherwise-satisfactory business relationship with a local distributor who competes with you can drastically shrink your profitability. And in that case, shame on whom?

    So Paul, tell us please, how did you solve the problems that come with switching suppliers in your retail framing business?
     
  8. wpfay

    wpfay Angry Badger

    I would bet it would be difficult to find any framing business at any level that isn't muddying the lines. Big distributors are offering "fulfillment" and offer On-Line Framing to anyone that has a valid credit card. Some are even completely vertically integrated from importing to retail with wholesale distribution as one component of their business. Smaller distributors have no minimums, and for $5.00 in Florida you can get a resale number and buy wholesale. There was a local franchise store that was acting as a procurement facility for a small group of artist/framers who couldn't get certain mouldings because the distributor didn't sell direct to home based It's just the way things are.
    I have to disagree with Paul C's statement. It's a shame that the facts are such that dealing with distributors who will sell behind your back is a reality, but there is no shame in dealing with them with your eyes open to this fact. You framersmight be able to use it to your advantage.
    As far as ethics and morality are concerned, would you be willing to take a lucrative job away from another framer given the right circumstances? How would your competition react to that same opportunity?
    On the other hand if you aren't careful about what you say and to whom, you are somewhat responsible for your own losses.
     
    shayla likes this.
  9. Paul Cascio

    Paul Cascio SGF, Supreme Grumble Framer

    I understand that not everyone can switch suppliers easily, and certainly it's not just a matter of principle, but also an economic decision. I've found that suppliers who are out of your market area are often willing to make concessions to acquire business from a customer they would not normally have a shot at. They accept a smaller margin, but it's found money. Want more leverage? Partner up with a couple of other retailers who share your views supplier infidelity and you can probably find a solution that benefits each of you.

    I would not buy from a supplier who is biting the hand that is feeding it. Not when it's my hand, I just would not do it. Why do something to make a competitor stronger? You entered into a relationship based on it being mutually beneficial, with clearly defined boundaries. That's no longer the case. It's costing you money, and will continue to cost you money. Not only does the supplier have a huge competitive advantage, but you're paying their rent.

    If your spouse is having an affair, do you accept it? Probably not. You likely will get divorced knowing there are some negative consequences to doing so. Buying from a supplier who decided that it's okay to stab its customers in the back is never okay. There are solutions, you just need to look for them. Don't be a victim, pick up the phone and start making calls. You owe it to yourself.
     
    Last edited: Aug 5, 2018
  10. wpfay

    wpfay Angry Badger

    You have presence in Florida, Paul. Can you name one distributor here that isn't pulling some kind of shenanigans to make a few extra bucks at the expense of the local framer? I could go through them by name and point out the weak points, but that isn't needed. It's something we have to figure into the decisions about who we buy from, and be willing to accept a certain amount of unethical activity.
    As far as organizing framers to agree on a collective buy, that's a great idea, but I believe our collective experiences discount that possibility.
     
    Jim Miller likes this.
  11. Paul Cascio

    Paul Cascio SGF, Supreme Grumble Framer

    Wally, I'm not familiar with the specific practices of every distributor in Florida, but I trust your findings. I also understand that it's difficult to get a large group of independent business owners to work cooperatively. However, this is a matter of concern for almost every retailer, and to a lesser extent, home-based businesses, so it shouldn't be all the difficult to find two or three like-minded owners in your vicinity. That's all the leverage you'll need to cut a favorable deal with a smart out-of-area supplier. An hour of your time invested in making phone calls to other local framers may produce a surprising amount of interest. And if it doesn't, it really didn't cost much to find out.
     
  12. munnframeworks

    munnframeworks CGF, Certified Grumble Framer

    I am a distributor in Florida, I have sent people that have make requests for my moulding to to local ( customers ) and they have proceeded to sell them another company's moulding. Is that fair ?
     
  13. Bob Carter

    Bob Carter SPFG, Supreme Picture Framing God

    i'm going to agree with Jim and Paul

    If you have specific knowledge of a supplier selling direct you have every right to quit doing biz and every obligation to share names ofthose crossing the line. But, also agree with Jim that you may have to accept it as reality

    At least, make an informed decision

    share a 'reality' experience. I did consulting/advising for a fe publishers and one consolidater. Most very one here probably used them, nice family run biz. Poster market was changing, several giant online folks popped up, more and more ma/pa closing. my analysis was to create 'separate' D2C site to reach the 99% of market that simply would never go to m/pa shop to buy a poster

    they declined, stating they were 'honest brokers' and would not 'encroach' upon a loyal (but rapidly dwindling) client base. my analysis was with consumer client they could easily increase 400%. They would lose more ma/pa shops through closings than 'encroachment'
    About a year later they liquidated to an upstart online retailer. The new guys visited on occassion nd told me about year later they wee shipping a trailer full every day. I don't know if ma/pa's have a consolidator today or even bother with posters. But I m confident had brothers taken the other path they would have served both markets well for years
    Bottom line: businesses have to make these decisions everyday. So do you. Do it based on reality and that reality has changed greatly
     
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  14. Jim Miller

    Jim Miller SPFG, Supreme Picture Framing God

    Yes! Before going to the considerable trouble of switching to an out-of-town supplier, contact some framers in the prospective new supplier's market and ask if that supplier is competing with them. In my experience of the past decade, the answer is usually yes. And in that case, what's the benefit of switching?

    Just because an out-of-town distributor doesn't compete with you doesn't mean that they don't compete with framers in their locale. Even if thousands of frame shops switched to out-of-town distributors, the core issue would remain about the same, and all those framers would be paying higher shipping costs. The logic of this fails me.
     
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  15. Paul Cascio

    Paul Cascio SGF, Supreme Grumble Framer

    Jim, my position on this, which I probably wasn't clear on, is that I only care about taking business away from someone who is competing with me. I recognize that switching may mean that you are still doing business with a devil, but it's someone else's devil. I feel we need to lookout for #1 first. Each of us needs to take care of our own business even if we can't fix the entire problem.
     
    Bob Carter likes this.
  16. prospero

    prospero SPFG, Supreme Picture Framing God

    When I first started up there was a framing shop about ten miles away. Very much a family-run business and
    long established. The eldest son started a wholesale wing to the biz and I remember him first calling on me in a little
    car with about 10 packs of matboard and a few d-rings in the back. The business grew and eventually became quite big.
    They did everything - glass - mouldings - sundries - the works. Even did blade sharpening and used equipment. We traded
    for years very harmoniously and successfully. The high street shop was closed but the 'old man' continued to do retail framing.
    It never occurred to me that I was buying from a wholesaler who was stealing my trade. They had their customers and I had mine.

    But there can be situations where toes are trodden on. If I were buying say, rubber boots from a wholesaler for $xxs and marking them
    up to sell and they were selling freely to J.Public at the 'trade' price there would be a swift divorce. :mad:
     
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  17. Paul Cascio

    Paul Cascio SGF, Supreme Grumble Framer

    The difference, as I see, is that you knew the nature of their business when you chose to buy from them. That's completely different from a supplier who decides to start competing with his own customers.
     
    prospero likes this.
  18. cjmst3k

    cjmst3k SGF, Supreme Grumble Framer

    Is "G" the first letter in the name (at that time)?
     
  19. tedh

    tedh PFG, Picture Framing God

    On the other hand, when my biggest supplier was approached by another store in my area about supplying him, my distributor told him No. They actually protected me.
     
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  20. Joe B

    Joe B SGF, Supreme Grumble Framer

    I wish we could do something about this but there is no way we can, by staying local or going to out-of-town suppliers. Most suppliers are selling to the public, either on line or in the office. You no long need a resale number for many suppliers. Also, some suppliers are taking complete frame jobs. If we are being honest, the suppliers have been doing that for years. No, I don't agree with it but if I were to walk in their shoes I would do exactly the same, it is called doing business and trying to stay in business. It's been hard for all of us since so many shops have closed but the suppliers were hit the hardest and the ones that remain are scrambling to get whatever business they can just to be able to keep their doors open, and we need to keep our suppliers.

    Paul, you are suggesting throwing the baby out with the bathwater. If we all were to stop purchasing from our suppliers that so called "compete with us" there would be no suppliers that would be willing to supply to the few remaining custom frame shops. They would close their doors and the remaining ones would be selling to the BBs or the online market.

    The only thing I can suggest is to do give your customers the superior quality, one to one customer service/care, and reliability. I don't believe that we should force our suppliers to close their doors just because we think they are taking our customers away. Our customers went to the suppliers because they were not satisfied with us ... just my opinion. Joe
     
    Last edited: Aug 12, 2018
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  21. Bob Carter

    Bob Carter SPFG, Supreme Picture Framing God

    to further complicate the matter, how many of us 'bypass' or suppliers and buy products off Amazon?

    The marketplace lines of distinction are drawn in pencil
     
    Jim Miller likes this.
  22. David Waldmann

    David Waldmann SGF, Supreme Grumble Framer

    The exception proves the rule.
     
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  23. Jim Miller

    Jim Miller SPFG, Supreme Picture Framing God

    In my shop, the ultimate solution was to focus on framing that the craft stores and wholesalers did not want to do, or could not do competitively. Mostly, that is preservation framing for valuables and three dimensional objects - especially to be removed/replaced in their frames. Our shop has a long history of doing those types of framing better than most of the others in our market, who would compete with us. It's a good way to limit your competition.

    Surprisingly, we still got a lot of the typical framing for posters, photos, and various kinds of artwork. NOTE: That's past-tense because I sold the business in 2015, but it still carries on with the same marketing philosophy of promoting framing that others can't or won't go after.
     
    Last edited: Aug 12, 2018
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  24. charming

    charming Grumbler

    "Code of practice" seemed to be going out of style a few years ago. In a couple of instances I've threatened my suppliers with closing my account when I've caught them. In the poster company instances there was nothing I could do.
     
  25. charming

    charming Grumbler

    Good point, and "No" it isn't fair, but it highlights the problems faced by the local retail picture framer. At least you were ethical about it.
     
    westman 2 likes this.
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