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JOANN FABRICS pricing

Discussion in 'Picture Framing Business Issues' started by dfwanna, Mar 11, 2005.

  1. Bob Doyle

    Bob Doyle SPFG, Supreme Picture Framing God

    SOOO.....

    Joanne is getting a sweetheart deal from LJ and they get to sell knock-offs as well!?

    Does LJ Joins the knock-offs for Joanne?

    Man, that is a sweetheart deal! I want in! Oh wait I yanked LJ already. oh well!< !>
     
  2. peppi1

    peppi1 Grumbler in Training

    hello people,
    All right , I would like to interject a little information on a few comments I have read in this thread. As far as Joanns, they are like most big box retailers using the Home Depot model, they run on the theory that each department creates a "profit per square foot" of that entire store. If they were losing $$$ with the Framing dept., then they would expand another more profittable area ie: Art supplies. Just food for thought a place like Michaels or Joannes is most proffitable in framing (custom and Ready Mades, photo. etc.) and silk arrangements. Now as far as Larson goes. How many of you out there have the stereotypical Larson wall? We all know what I mean here. The collection signs, certail groups next to certain groups front and center for the world to revel in Mr. Ponzios greatness.(I do not, my choice) You are rewarded with certain discount structures, and a minimun $$$ amount that you must purchase, yearly to keep it. I am not knocking the system, it is capitolism and we all have the right to decide what we do with our business.(isnt that why we own our own shops
    after all?)BUT....you have 1 maybe 2 even 3 shops that you have worked very hard to make successful,and by God you have earned that discount, right? Does Larson give your stores the same discount as Joannes? Does Larson offer to cut the Matting, and cut and join your frames for your orders? Does Larson offer all these services at maximum discount prices? I know the answer as far as my experience is concerned. People please remember we all have a choice here. Even if you choose not to decide, you still have made a choice. (song lyric from somewhere) Live with your decisions. after all IT IS YOUR BUSINESS!
     
  3. The King

    The King SPFG, Supreme Picture Framing God

    L-J used to cut and join quite a few of my frames when I'd get especially busy. I never did ask them to cut mats, but I'll bet they would have.

    I don't imagine my discount structure was the same as Jo-Ann's but I never quite reached their volume level, either.

    Whatever you all decide to do about this crisis, do NOT burn L-J samples in your fireplace.
     
  4. Jerry Ervin

    Jerry Ervin PFG, Picture Framing God

    Welcome to the Grumble peppi1


    I'm glad to see that the call center duty has not dulled Ron's sense of humor.
     
  5. Elaine

    Elaine SGF, Supreme Grumble Framer

    I made a trip to Joannes this morning - about 40 minutes away. It was enlightening but not detrimental. I had them quote a print - their price before coupon $140, after $70 or another 10% off to beat a competitors price. Our price with no discounts $141. Things to take note of:

    counter service - lousy
    design skills - lousy
    sales pitch - nonexistent
    wall of frames - LJ (I took pictures with my cameral phone while waiting to be waited on :)
    small portion of whats available, but ranges across the board from low to high end

    I stopped at a friends shop to talk to him - not too far away from Joanns and asked him for his input. His price, no discounts $126. He took a hit of about 18% when they first opened, but has since regained his position. Not too concerned about them, and his Fiance' actually works at that store as an operations manager.

    Sell your customers service, relationships, value-added intangibles - they will stick around.

    my 2 cents worth of research this morning

    elaine
     
  6. John Richards

    John Richards MGF, Master Grumble Framer

    I'm not a moulding historian but the basic pattern in Imperial has been around along time. Many topics that have been discussed here are regional. JoAnne's may be closing stores but they have also opened 7 new ones here in Minneapolis / St. Paul and according to several retail magazines they continue to expand. Also, it is a fallacy to believe that you need to be big and spend lot's of money to be on a Partnership program. Having warehouses in Minnesota and Michigan I can tell you that the qualification to be a Partner between the two is night and day.
     
  7. Bob Carter

    Bob Carter SPFG, Supreme Picture Framing God

    I do not disagree with Elaine-Sell your strengths.

    But, let's look at what we all know and confirm through Elaine's research:

    Their service is lousy,

    Their sales ability non-existent,

    Their design skills are lousy,

    And yet, they consistently do, on average, 5-6 times more business than we.

    Would we all be in a world of hurt if they made even the simplest of inroads into these areas in which we feel we excel?

    Two scary thoughts: This would be so easy for them to do and/or a great portion of the market doesn't care as much as we say they do about the things that we feel are our salvation.

    Not bright prospects either
     
  8. Jim Miller

    Jim Miller SPFG, Supreme Picture Framing God

    Amen. [​IMG]

    The problem is well described in this thread. Now, let's hear from those who are competing profitably with this admittedly-formidable competitor. Hmmm? Anybody? [​IMG]
     
  9. BUDDY

    BUDDY PFG, Picture Framing God

    let's hear from those who are competing profitably with this admittedly-formidable competitor.

    Jim that all depends on how they are competing ? Many might think their style and techniques are superior.

    But I don't think that is the problem Bob was addressing. The BBs are in a totaly different game and they don't play by our rules.Even if I produce a far more esthetically and Conservationally correct job but I can't make enough money to stay in business does it really matter? After all there is only so much framing business out there and if they corner even more than 5-6 times more than us ,how long before we don't have enogh to keep the doors open. Still another thing to consider is the fewer technically correct jobs we manage to bring in the Higher and higer we will need to charge and the more and more cutomers who will choose the "wham bam" jobs while the BBs are able to allow their employees to go to Trainning seminars and get better at those things they are so poor at now.

    I don't have any real answers but I think we need to do both;keep informed and trianed while being personable at the counter ,but know when to sell what the customers wants for the price they can get it else where.Or be happy to win Framing competitions until we close the doors.
    BUDDY
     
  10. dfwanna

    dfwanna Grumbler

    So, let me ask. Do we see Larson-Juhl as a alliance or a threat? Just curious what you all think?
    Anna
     
  11. SteveT

    SteveT CGF, Certified Grumble Framer

    A "partner" helps you pay the bills.
    Not lure away your customers.
     
  12. dfwanna

    dfwanna Grumbler

    Thats what I thought too. I am a partner (not that I care about that),and for some reason I dont feel they are helping me to compete,(with their line anyway).
     
  13. dfwanna

    dfwanna Grumbler

  14. dfwanna

    dfwanna Grumbler

    I didn't see any knock-offs, . Larson- Juhl stamped on backs of all the samples. (in the store anyway)Don't know about their web sight.
    Anna
     
  15. Elaine

    Elaine SGF, Supreme Grumble Framer

    My LJ rep is visiting today - I will see how he addresses this when I ask questions and state concerns.

    just a couple of thoughts...

    LJ is marketing to the masses from the Joanns end to the Fine Living commercials (high end living) There seems to be a crossover - LJ affordable versus LJ a "top of the line" frame of quality and higher priced.

    If we follow some of the advice given here, giving people what they want at prices they can afford or are willing to pay from one end of the pricing scale to the higher end, then this is exactly what LJ is doing. Meeting the customers "needs".

    Given that line of thinking, I'm a customer of LJ and they are not meeting my needs in pricing in order to compete against Joanns pricing. I'm going to ask for better pricing and see what response I get.

    LJ has always been rigid about not offering discounts of more than 10-15% with their promotions - have those rules changed also???

    just some more thoughts, I'll let you know what my rep says today

    elaine
     
  16. BUDDY

    BUDDY PFG, Picture Framing God

    I truly don't know what rate of discount JoAnn's or any other BB gets from LJ. I'll never be in their Bracket and therefore it doesn't matter .

    However I am continually reading about some here who are getting 5-10 and even 15% discount rates as what seems like a usual and customary event. I do a much smaller volume of business than most other shops I know and compete against and that has been indicated as the reason for my low rate. To that extent I have never question my basement rate of discount.I have also been told that a volume of $2000 to $3000 per month and a comitment of stay in that range is needed to become a "PARTNER". However I would love to hear how many of you get more than I do and WHY.

    Mike could some completely annonymus POLL be made that would ask How many get from LJ what rate of discount and what their Gross Volume of purchases are ,and where they are located geographically. ( as fine geographically as is feasably pin pointed so as to maybe indicate the different reps ,who may be acting on their own)?

    I would love to see a comparative study done which could be used to ask different reps why their rates don't refelect the same.I am asking MIKE since I want it to be as impartial and through as possible ,otherwise i 'd try it myself .However it would probaly take me forever.LOL

    I am seriously beginning to think certain reps give what ever they can get away with or only what they need to in oredr to get the results they desire. this sort of Poll results would make it more difficult for any rep to claim it is LJ polocy,don't you think?
    BUDDY
     
  17. Jay H

    Jay H PFG, Picture Framing God

    I'll bet that the discounts are all over the board Buddy. I'll bet that LJ monitors all of there regions. If sales fall off in a region they offer cheaper glass or mats. If there are tons of stores in an area with lots of sales they back off promotions. I would also bet there are a dozen different “partnership” arrangements that are unpublished. You might qualify right now!

    What I would do, if I were you, is have a nice long sit down discussion with your rep. He may lie to you, or he may tell you the truth. Either way if I were unsatisfied with his response to your question, I would dump them. More than likely you will be satisfied. They may even have some suggestions as to how you could get more discounts.

    If my customers have some questions about my discounts, I would rather them ask me than all the other ladies in the neighborhood. I would be able to better inform them anyway.

    Just a thought.

    Carry on!
     
  18. Mike Labbe

    Mike Labbe Member, Former moderator team volunteer

    I wouldn't be comfortable setting up this kind of poll, which would probably just rile people up and cause unnecessary grief for reps.

    I get the distinct impression, after talking with many, that the rules are very flexible depending on what the rep wants to offer. Any good salesperson will try to set the bar higher to give you some goals and increase product sales. The min requirement seems to range from 15k-25k and the discount is 10%-25%, depending who it is. Free delivery ranges from once every couple weeks to once per day, depending on the area/what the local market dictates. A shop in Alabama (just for example) may have a different economy than one in New York City (just for example), and this may be one of the reasons for the differences.

    As of now, the big boxes appear to be selling at a fair market value price, and are easy to beat on selection, design, turnaround time, and quality. What I don't like is the "markup and discount" game, to the tune of 50-70%. It seems unethical to me, and customers are turned off when they realize the discounted price is the actual local market price.

    I don't think you can bring a rep to the mat because of the differences in economy or volume that dictate their generosity. Money talks! I hope we are someday as large as M/HL/JA/BF to negotiate the same volume discounts/value added services, but until then i'm gonna concentrate on my own business and won't lose any sleep over it.

    Just my two cents. [​IMG]

    Mike
     
  19. Dermot

    Dermot SGF, Supreme Grumble Framer

    Buddy

    Just ask for extra discount…..hay you are a long time customer and you feel you deserve the extra discount for loyalty if nothing else……if you are refused you are no worse off…….if you get it you are a winner….Warning don’t fall into the trap of feeling rejected if you are refused…….remember you are no worse off.

    It’s like asking for the order from a potential customer…..lot’s of sales people are afraid that if they ask for the order they might not get it (fear of refusal)………..so what if you don’t get it, you are no bettor or worse off than where when you started…….

    Good luck

    Dermot
     
  20. BUDDY

    BUDDY PFG, Picture Framing God

    First Mike I wasn't trying to pry into any shop owner's personal advantages .That is why I wanted it to be annonymus and out of my hands.I do however have a problem with my or any other rep telling me or even insinuateing that what he is offering is the standards established by LJ.

    Your comment about the economy being different in different geographical areas has long been an opinion I have . In fact it is often brought up by me when ever someone trys to insinuate that we all should charge very close to the same prices.So I fully understand and agree with the effect that may have on what we charge . However a discount % isn't the same at all .We can ( and I think should)be given the same discounts if we meet the same criterias. Not if we are able to wheel and deal effectively with our reps.

    I completely agree that it is more than likely the rep who establishes the rates and not the COMPANY. I fully suspect ( even more the more I hear) that the reps are free to give what ever thay can get away with.Sort do what it takes just don't discuss it openely. It may be that very logic that has allowed BB to make such lop sided sales.

    As far as asking for the discount as Dermot suggest ,been there done that, and have been told( contrary to what some others have been) that what I am getting is the best the COMPANY POLICIES will allow. I have also been told that my long time loyalty didn't warrant "PARTNERSHIP" but shear volume did ( as I said around $2000 + per month or more).However I am hearing directly contrary statements from alot both here and on other forums.

    We keep speaking about calling their bluffs,but when we make private self serving deals we are IMHO continueing the farce ,only differance being, we may make a better deal than others . Isn't that exactly what many are upset with in the LJ advantage some BB have?

    Pulling their samples will get the point across about how upset we are but it doesn't prove that they aren't telling the truth to us or anyone for that matter.

    But I guess I just don't know how to PLAY THE GAME welll enough ,but I'm not sure we should be PLAYING at all.It seemed like a good tool to have .So much for MHO.Thanks for even considering the possibility.
    BUDDY

    [ 03-16-2005, 12:43 PM: Message edited by: BUDDY ]
     
  21. Bob Carter

    Bob Carter SPFG, Supreme Picture Framing God

    I love it when these discussions turn from the practical to the philosophical. We want to talk about these problems, both the LJ and JoAnne's problems, in the abstract. As if one answer is applicable

    But, Buddy, when you wonder if you are getting your "deserved" discount, then, the answer is you are getting what you negotiated. In essence, you got what you "deserved". Put yourself in LJ's shoes: Would you give more discount to that neat little needlework shop in the bayou just because?"

    As a rule, discounts are given because of the what the shop brings to the table. An easy way to get more discount is to offer more to the vendor. Make it a quid pro quo.

    The other is to ensure that you don't go elsewhere. An easy way to force that decision is to prepare the necessary leverage by looking at other vendors and see what they offer. Use that information to compare your present situation. With that possible shortcoming, you may have some leverage. And never be afraid to shift business if the deal is better. But be sure to factor all components.

    You also mentioned that you felt that maybe the BB's weren't playing by our rules. Maybe what that really means is that maybe our "rules" are outdated and don't resonate with a lot of consumers.

    Aren't most of us doing business pretty much the same way we did 10yrs ago or longer? Consumer buying habits change-we need to also

    Jay-I loved your comment about LJ possibly offering more discounts if sales in a region slipped. You don't mean to imply that by lowering prices on some items (you used glass and mats) that they might actually spur some additional sales?

    What a concept? How come almost all the experts say it doesn't work in our trade?

    Mike-I can't let the tired,old unethical comment go unchallenged. You made reference to the "mark-up and discount" game. We see post after post (and I think this one started out this way)of not being able to compete with these 400lb gorillas because of their sweetheart deals and tremendous buying advantages.

    Let's face it, they buy very well and they ought to use that buying advantage as a selling advantage. And, if the biggest advantage they derive is purely perceptual, then it is still an advantage.

    I know, I know we get that old,worn out "Yeah, but my regular prices are similar to their sale prices" way too often. And the reality?

    If your regular prices are similar to their sale prices, then your regular prices are too low. And you get not one ounce of benefit from that "low price" position.

    Unethical by them or stupid by us?

    Let's take a real world example:

    You buy chop and it is $5.00/ft plus freight. A "reasonable, ethical" mark up woud yield a retail price of around $18.00 (yielding around 30% CoG)

    But if you buy at a 1000ft price you might pay $2.25, or if you buy a box, you might pay $1.50/ft. Or if you are the guy that distributed it to you and can make money by selling a box to you for $1.50/ft, what did he pay? .90/ft? Less? And let's say I am certainly big enough to buy as much as that distributor,so why shouldn't I buy direct for .90/ft?

    Would it be unethical of that plant to sell to whomever can buy that quantity at that price?

    So we have a landed cost of $1.00/ft and I know that Mike at GTP sells the same product for $18.00/ft. Would it be unethical for me to sell it for $18.00/ft also?

    Except now I realize at $18.00/ft I may not sell one foot more than Mike. There is no compelling reason for Sally Shopper to come to me anymore than MIke-perhaps even less.

    Unless I say"Wow, if I sell this bad boy for 50% less than Mike ($9.00/ft), would I likely get more customers?" And can I make any money at only a 9x markup or should I have "reasonable,ethical" markup like Mike and sell it for only a 30% CoG? That would be a retail price of about $3.50/ft.

    So,are marking it up to discount it unethically or are we simply using "market based" pricing and setting "promotional" pricing accordingly?

    When we go to a show and get a "Show Special" are we unethically leaving our regular price at it's former state and making more margin? Would it be more "ethical" if we lowered our regular price to match our preset margin?

    All the answers are self-evident and 100% ethical

    As a P.S., I would also encourage all to buy well at these shows and create a promotional opportunity where some items might be "promoted" (I won't say discounted because it irritates many)and some items sold at a margin-enriched price

    We don't do it because most of us have never been taught the mechanics of promotional buying and Peer Pressure is way to daunting to not do it. The BB's understand it and couldn't give a whit about Peer Pressure
     
  22. Emibub

    Emibub PFG, Picture Framing God

    Really, I don't think this is an issue of how to fight the BB's. Bottomline, this thread was started concerning how Joann's prices LJ's products. The same products we all carry. If they can sell the same product we carry for half the price we do then I think that totally diminishes the value of the product. That is the crux of the situation. I don't expect to earn those type of discounts with my one little store. But, I think LJ has to understand that their product is now being sold at half the value even they suggest we all sell it at. If the product has a diminished value is it worth continuing to sell it when my customers can get it for half the price elsewhere?

    That is the question.....
     
  23. Jerry Ervin

    Jerry Ervin PFG, Picture Framing God

    I vote Bob Carter for President!

    At least Extreme High Commander.


    [​IMG]
     
  24. Jay H

    Jay H PFG, Picture Framing God

    (cough)

    It looks like Bob might have some competition in the common sense arena.

    It does stand to reason that if LJ allows their products to sell at that level, then doesn’t that devalue the products?

    I’ll show my age here but my first memory of shopping, with dad, for a VCR is nothing like my son and I looking at DVD players. It was a big deal to go to an Audio/Video store for a VCR. But those products have no significant “value” anymore. Heck DVD players are in isle 4 at Sam’s next to the Puppy Chow. Watch the paper and you might just see a ‘buy one get one free coupon.’ Is this what JA's could be doing to LJ’s products?

    And doesn’t LJ have postcards that they will fill out and mail for you? Isn’t there a limit to what they will let you discount on those cards? For some reason 30% OFF is coming to mind. Is LJ discouraging us from huge “discounts” offers then supporting other for doing so?
     
  25. Bob Doyle

    Bob Doyle SPFG, Supreme Picture Framing God

    Jay,

    Isn't this better than "buy one get one FREE!!!"?

    $175 * 2 = $350.
     
  26. AWG

    AWG SGF, Supreme Grumble Framer

    Kathy and Jay have great points (and I agree completely)

    But the only question I have regarding the "value" of the LJ stuff being discounted so heavily is this: Is the CUSTOMER aware who/what LJ is when they're buying from Joanns? Probably not.

    If they're not aware that we're selling the same stuff at the appropriate/suggested "value" does it really matter? All the customer knows is the look that works for them - could be the $100 knockoff or the legitimate LJ - when they are only concerned about $$$. How many fake Rolexes and TAGs sell each year compared to the real thing?

    BTW I think the the whole partner price issue is moot - you get what you negotiate - bottom line. Some folks are better negotiators than others, or are smarter businesspeople - and so they are (rightfully so) more successful.
    As a sole proprietor there's only one person to answer to regarding price/profit/etc - you. If you can't make money with a partcular vendor's products THEN DON'T SELL THEM. As time goes by we sell less and less LJ stuff as we find other, more profitable/better quality/cheaper priced items. Some we use as a "selling advantage" some we use for "profit advantage" but it's not advantageous to continually b**** about what you can't change, and change the things you can.


    What's after Extreme High Commander?

    Tony
     
  27. Kath.ryn

    Kath.ryn Grumbler

    A "partner" helps you pay the bills.
    Not lure away your customers


    I sooooo agree!

    Wow - this thread has gone on awhile. A few thoughts in response to more of the posted input:

    LJ is now "partner" with Joanne, and that is their current marketing priority; any "partner" help you can get is what you negotiate - the corporate rules no longer apply.

    If a close "look alike" is available - show it to your customer, tell them who makes it, and I'm sure they will be happy to use it. I don't think even 1% of my customers know who LJ is (and I have MANY high-end customers).

    Of the customers who know who LJ is - LJ risks losing them. My high end customers DO NOT want what everyone else can get (at Joannes, etc). They love it when I show them something "better" -that isn't at JoA.

    Support your other suppliers - they are the ones who truly want to partner with you, and we need them to remain viable.

    Anyway ... just a few thoughts. I appreciate all the discussion, and I really think LJ is aware of the clout that we as a group can carry.

    Now ... back to work.
     
  28. Jim Miller

    Jim Miller SPFG, Supreme Picture Framing God

    I'm not so sure about that, in two ways:
    (A) I'm not sure LJ is aware of our clout, and
    (B) I'm not sure we have clout.

    If LJ were concerned about alienating us as a group, I believe they would think twice about cultivating such deep relationships with the companies that are putting so many small shop framers in peril.

    And if we have clout, why aren't we seeing the benefit of it?
     
  29. Kath.ryn

    Kath.ryn Grumbler

    Hi Jim - I think we do have clout - how much is really the question. However, the fact that they are passing discounts to "nonpartners" seems to indicate something - I remember when they even refused to give samples at no cost because they were "too good a company" for that If they're giving discounts - there's a reason for it. They still very much need us.

    Also, until just recently there was much more hesitancy by most posters to say anything against LJ - now I think more are coming around to reality. We all LIKE them, but we need to make "good marketing/buying" decisions - just like they have with Joanne. The more walls that come tumbling down, the more LJ will have to react. (I can just imagine "See our products at your local Joannes" being added to their magazine ads)

    Another thought - if the independents don't sell the "LJ as high end, best frame around" who will. Joanne? They're not the retailer LJ had in mind with their luxury decor magazine campaign.

    Just MHO, but I am moving past them and hope other indies can find a more profitable supplier for themselves too.

    Why give your business to your competitor?
     
  30. Bob Carter

    Bob Carter SPFG, Supreme Picture Framing God

    Wow, I am so blown away by the clear, concise logic of this thread.

    Kathy-you have so clearly defined the problem; it still requires action to resolve the dilemna. And, I fear many will do nothing reaffirming Jim's concise A & B points. Kathy-you have grown so much in the past two years. I hope a little growth came from our visits, but you sure have come a long way, baby!
    Tony-You have clearly defined a potential plan of attack that I hope doesn't fall on deaf ears. The responsibility still falls on the guy in the mirror

    And what comes after Extreme High Commander?

    Easy

    Extreme High Commanders Wife

    There is no higher authority
     
  31. dfwanna

    dfwanna Grumbler

    I'm not so sure about that, in two ways:
    (A) I'm not sure LJ is aware of our clout, and
    (B) I'm not sure we have clout.

    If LJ were concerned about alienating us as a group, I believe they would think twice about cultivating such deep relationships with the companies that are putting so many small shop framers in peril.

    And if we have clout, why aren't we seeing the benefit of it?
    </font>[/QUOTE]If we all quit buying as much from Larson, whether it be mats, supplies, glass, and/or frames...Then yes, I think they would certainly realize as a group, we do have clout.
    "We" (independent buisinesses together), are the reason Larson is the biggest supplier in the country. And yes "we" (as a group), can take that away. It would take us as a group to be heard, but it can be done. We could all have Jo-ann's pricing if thats what we wanted.
    Anna
     
  32. Less

    Less SGF, Supreme Grumble Framer

    I think Larson is playing a dangerous game and they know it. Admittedly, Larson knows the independent's are the most important part of their business. They know of the Grumble and obviously pay attention. Larson needs to be very careful not to put to much pressure on the hand that feeds them. This move may backfire on them.

    My rep had the regional manager call me. I must have been on the phone for more than 1/2 hour. He did not deny my speculation, but would not confirm them either. He was very careful.

    Think about it: no inventory, no delivery charges, Less equipment, no glue, no mess, no nails, free labor and Larson marketing to boot. Sure we can all buy joins, but not at the prices that allow Joann's to make a good margin at 50% of the price of what Larson suggests we charge. 3.6 length mark up my a ss. We might as well throw away their suggested retail schedule. I can hear Bob clapping.

    No, Larson better come clean, level the playing field or risk loosing the partners that their business is built on.

    It's becoming obvious that the BB's are hurting more than just the independent framer. Otherwise, I don’t believe Larson would take this kind of chance. If they really want to take back more of the market they will need our help.

    Just my opinion based on current information.

    Oh, and by the way, if push comes to shove, I will be all to happy to call all of my competetors to inform them of what a great deal they are getting buying Larson's joins.
     
  33. Emibub

    Emibub PFG, Picture Framing God

    Yikes, kudos from a couple people on the business forum. [​IMG] I must be vicariously absorbing info along the way, good for me! Just joking. I hope you were directing that at me Bob, there is another Kathy posting in the thread, don't wanna steal anybody's praise. But, absolutely I have been listening very carefully and considering I did everything bass ackwards to start I am learning everything on the run. You have been more than influential in giving me some direction. If I were starting over fresh with the knowledge I have now I would be so unstoppable.....

    Everybody has to decide for themselves what to do with LJ. The one thing I have learned is I do have this false sense of loyalty to them which I think many of us do. They certainly have earned that loyalty from all of us but if they are going in a different direction I need to think of my best interests too.
     
  34. El Framo

    El Framo Guest

    Wow, my brain is now hurting. So much to digest and attempt to act on. Anyway, we have been an LJ partner for some time and buy approximately 85% of our frames from them (most length, some chop). Prior to this relationship, we dealt with an array of other suppliers. I must say that what LJ seems to be doing here makes me reconsider that relationship (or at least makes me want to negotiate a better price structure). However, the truth remains that LJ's quality and service are unparalleled in this industry. The rate of out-of-stocks is very low, their moulding very rarely comes in warped or damaged, and on the off chance there is a problem, it is rectified quickly and easily. All of this allows me to better serve my customers, and that means a great deal.
     
  35. Bob Doyle

    Bob Doyle SPFG, Supreme Picture Framing God

    Larson playing a dangerous game, biding time. I don't think they care really. IMHO they are "changing the sales focus". going away from an area they have little control over (us) to one they have "considerable operational control" over (Joanne's).

    Am I worried about it, not really any more than JoannesMichealsHomeDepotWalmartHobbyLobby framing bothers me. The market is changing slowly around us. My LJ Rep, a term I loosely use now, never stops anymore. Why? I don't "do the numbers" he needs to justify stopping here.Even if I wanted to "do the numbers" the numbers are getting higher.

    So I look elsewhere, get better prices and a rapidly growing more elite selection of moulding. Hey if my customers can see the moulding at JoannesMichealsHomeDepotWalmartHobbyLobby They don't want it. They want a different look. That's where I am focusing my efforts, finding the different look, not the JoannesMichealsHomeDepotWalmartHobbyLobby look.

    Funny I thought the Grumble would strike out JoannesMichealsHomeDepotWalmartHobbyLobby as a curse word! ;)
     
  36. Jerry Ervin

    Jerry Ervin PFG, Picture Framing God

    Several here have given their observations on JoAnns, now let me give you one on my local Garden Ridge.

    The sample wall was all G&G Moulding and AMPF/Zinsels, both companies I buy from. They sell Nielson metal retail at chop prices. This week's promotion is 60% off. Am I to assume that they get better discounts from these suppliers than I do? You betcha'. Should I get all mad and remove those samples from my walls? I might.

    Another thing I noticed was a Help Wanted sign. So I had to talk to the framer on duty. The store is down to 2 framers. They can't keep help. There was over 100 work orders in the computer and they are telling customers that there is a 3 to 4 week wait.

    On the plus side, I gave her a hand full of business cards. They need someone to send the oversize and shadowbox work to.
     
  37. BUDDY

    BUDDY PFG, Picture Framing God

    I recently checked some of the information posted here witha friend who does a very large amount of LJ business and is a PARTNER.

    His comment was that there are various dehgrees to what PARTNERS are netitled to here in this area.He also proposed a couple of thoughts I don't recall seeing in any of the post.( but I may have missed them,with all that has been said.LOL)

    he asked how are we sure that Joann's is getting any better discount than any other PARTNER? he based that question on the facts that what anyine charges for a complted job doesn't have to have anything to do with what their COG are. We just assume that they do business just like we do. he also said we need to consider with the hugh volume they have coupled with the multple locations their profit can be much greater with an even minut margin. He also suggested that they have a host of other departments all of which are probaly bringing in some more profit ( I think I did hear that before) and as such the fact that JoAnn's is makeing far less per job then we can afford to accept is totally acceptable to them.

    So the price a location is chargeing should be based on a 25-30% COg but does it really have to if they are not doing business as we know it?And don't jump for the keys ,I know the theory that we should all make as muchas the market will bare. But just supposeing there is a business that works on VOLUME not percentage.

    I think i once related a story about offering to buy BEER for my Union Pic-nic since my BROTHER was a Winn-Dixie store manager and he surely would give me ( his loving brother) the cost price and there by either save a lot of money or buy more BEER. I was shicked when he told me the best price he could give me wasn't even the best price i had seen advertised in thelocal newsppaers. My brother explained that those prices were Loss Leaders and his price was figured on only making as little as a quarter per six pack. It seems Winn -Dixie ( then not now ,but that may have something to do with their current position ) relied on VOLUME and felt that while they had to sell an awfull lot of beer they made it up on other commodities while they still weremaking a profit on the beer.

    Is all this beginningto sound familiar? My point is I thinkit might be a good idea to realize that not all business do things the way we feel it should be done and not considering how someone else might take advantage of a situation we create might be very short sighted and may unleash some problems we hadn't anticipated.

    But then I am the guy who is struggleing to receive any DISCOUNT increase he can and I don't really understand the workings of sucessful businesses. So I'll sit back at wait to have my errorspointed out,while I hope I gave the rest of you something new to consider.
    BUDDY
     
  38. FrameMakers

    FrameMakers PFG, Picture Framing God

    My wife & I were talking to a Jo-Ann's employee yesterday, they are short-handed as well, but do to lay-offs not retention.
     
  39. FrameMakers

    FrameMakers PFG, Picture Framing God

    Buddy I don't believe that Jo-Ann's is using framing as a loss-leader. I do believe that their idea of profitable is very different than ours. Most small retailers were used to simple key-stoning (cost x 2). In framing we are saying your COG should be 28% or less. I can buy moldings everyday that are in the 15% COG neighborhood.

    Are we to greedy for our own good? Does Market based pricing limit our market? Have we allowed our industry to price it self out of the market? Has the perception of high costs shrunk the size of our potential client base? Can we change the perception? Will we all end up as Wal-Mart Greeters?

    [ 03-17-2005, 01:08 PM: Message edited by: FrameMakers ]
     
  40. Emibub

    Emibub PFG, Picture Framing God

    I think framing is too labor intensive and carries too many liabilities to be very effective as a loss leader. It is way easier to put the embroidery floss at 10 for a dollar......

    I am convinced the issue for me is not how much Joann's is making or losing selling their framing. The product that we have sold and has been sold to us is now being sold all across America as a cut rate product...........It doesn't matter that the public doesn't know LJ from Adam, I do. How can they continue to market it to us as a high end product?
     
  41. puttyboy

    puttyboy CGF II, Certified Grumble Framer Level 2

    Everyone seems to be a bit perturbed by the LJ-Joanns marriage.
    Send a message to them. Pick a date, take the samples off your walls, box em' up in your new suppliers sample boxes and send them back on LJ's dime, that is, in there own delivery trucks.

    There are so many other smaller, quality & customer driven suppliers out there yet everyone sticks by LJ because, well, because they're LJ.

    I say we pick Steve Mckenzie's birthday as the date.
    Mr. Ponzio is enjoying his windfall; raising race horses, and sipping red wine on the veranda.
     
  42. Elaine

    Elaine SGF, Supreme Grumble Framer

    Quick rep report...

    He said...

    same story I've been hearing for the last 7 years...

    He has 12 Joanns in his territory - independents take an initial hit then they regain it plus more business...

    he said "don't be afraid of Joanns" - they actually help along with Michaels to bring "framing" to the attention of new customers who may not stay with Joanns/Michaels and move on to the better experience with a "true framer"...

    work your strengths...

    I did not know that the reps are commission based only...

    a couple of cents for now...

    elaine
     
  43. FrameMakers

    FrameMakers PFG, Picture Framing God

    Just what they want you to hear. Bull I say. We have been severely hurt buy the big boxes. This commissioned rep gets no money from the BB accounts and has to do or say anything to keep you from pulling their samples in disgust.

    So when is Steve Mckenzie's birthday?
     
  44. Kevin Colbert

    Kevin Colbert CGF, Certified Grumble Framer

    Dave,

    I know full well from your other posts that you are well informed on these issues and these questions are more likely just asked to be provocative; but since you asked, I thought I might respond…

    "I can buy moldings everyday that are in the 15% COG neighborhood. Are we to greedy for our own good?"

    1) Yes, you have SOME products that are this low on COG, no you do not have a 15% cost of goods. You are greedy if you are NOT working hard and NOT doing a good job. You are not greedy if you ARE working hard and ARE doing a good job.

    "Most small retailers were used to simple key-stoning (cost x 2)."

    2) Your realities are the same as other retailers but in addition, you are a manufacturer. The cost of goods in any item you buy at retail will be much lower than the cost to the retailer. It is just split through the distribution chain down to the manufacturer. As a matter of fact, the COG on most items in stores is lower than our industry COG.

    All in all, I think we will still be in business as long as people enjoy looking at beautiful art, images of loved ones, representations of great accomplishments, and sentimental or collectible objects.
     
  45. BUDDY

    BUDDY PFG, Picture Framing God

    I think I need to check my key board,it may be typeing on it's own.LOL

    As far as I can remember a LOSS leader is a product you intenionally take a small loss on to lesd customers into your store to buy other items that are priced with a full mark-up on. But then I am not as sharp as some of you are, so correct me if I'm wrong.

    I thnk what I said is that Joann's and other BBs may be able to accept far less PROFIT than we can survive on. By that I mean that while we are looking for a COGs lower than 30% and we do everything we can to keep our production cost down the Joann's of the world can survive on much less PROFIT .For several reasons,some have been discussed by Bob ,they buy at a premium due to their very large volumes.And another I mentioned e.g. they have a lot of other items in their stores to add to the total profit. So as long as all departments are making a PROFIT they may be content.If however they don't make as good a profit on say Framing they devote more of their store to the other items which may be doing better.

    The point being that we tend to assume that if someone is selling for less than us ( all be it MUCH LESS) they must be getting a MUCH bigger discount than any of us are.But what I was suggesting is that it may be very possible that BBs compute their Profitability on a differnt scale than us and while they don't want to allocate floor space to LOOSERS they may just be content with lees % and more dollars. I think I have heard that Philosophy from LJ in the past.( even though i and many others don't agree with it from vantage point) Which may account for them getting together. I also was suggesting that while we are decideing how profits are made we might want to think about the BB who does has a lot more $$$$ to advertise but can also be patient while the profits are made in smaller % but much larger Volumes as well.

    I think we should consider if a business with much better capitilization needs to get their return in the same ways we do or can they make less per sale while takeing in 5-6 ( I think it was) more sales than we do.

    Suppose we make $100 -$120 per sale but the BB makes only $30-$40 , that would seem disaterious to us.But they make 5-6 sales to our one.Doesn't hat bring in the more profit? I know there is more overhead and I am sure they do also but I think my point is clearer than my math. The most important thing is they are not lossing if they are making any profit .We just can't survuve on what they may be willing to accept without any special discounts.
    BUDDY
     
  46. wpfay

    wpfay Angry Badger

    It does seem a bit ironic that LJ has been trying to establish brand by advertising in the high end shelter publications and now choose to push the brand through a discounting craft supply store.
    Like Bob C is wont to say, we vote with our dollars.
    We can be heard if inertia doesn't get in the way, but once we're heard, what then. I have visions of the dog finally catching the tire of the speeding auto.
    I'll get where I want to go with them or without them.
     
  47. dfwanna

    dfwanna Grumbler

    The thing that makes Joanns different from the other BB's is that they are CHEAPER....way cheaper, on the same thing we sell (Larson Juhl).
    All of the other BB's were NOT cheaper. They all have a price mark up of about 9x's to give that huge discount which brings it down to normal retail (our everyday prices). I worked at Aaron Brothers, (which is owned by Micheals) and I saw their cost. I know they do that and so does Micheals and Garden Ridge. These places are not cheaper. The only reason they seem cheaper is that they carry low end frames.
    They also don't carry anything as nice as Larsons Imperial line or other high end frames. We could always , in the past, compete, because if a customer were to compare apples to apples, well.... we didn't carry the same apples before. (except metal maybe)
    Now we ARE carrying the same apples.
    And yes, Larson is certainly trying to establish a household name like coke. People will start asking for them,with the marketing they are doing, (wasn't this to help us?)
    Joann's is not the same, and I'm sure the other BB's will soon follow suit with big price wars that actually blow us away with wholesale pricing. (That has not happened before)
    Maybe I'm wrong...but that's why it concerns me.
    What if I'm right?
    Anna
     
  48. BUDDY

    BUDDY PFG, Picture Framing God

    Anna I have told others ,that while asking my friend who is a LJ partner what he thought about this thread ,He told me that ,"In Our area the others have already followed suit. Well I'm not sure who went first but there is another Supplier down here doing the same type of service for a slightly smaller local BB. The supplier is AMPF/ZINSEL. Again I am not sure if this policy started before AMPF joined ZINSEL ,but I was told that they did CHOP and JOIN and matting for Gordon's and Eric's of Metaire and their other locations ( I think they have about 4-5 40000 sq ft stores) I have also been told these stores have an eclusive stocking of AMPF/ZINSEL moulding. As to how reliable the small statements may be I'm not sure ( it is purely second hand since I don't check those kind of things). My asumption though is when one of the vendors trys a different approach to marketing the others feel they may miss out and follow suit .I haven't done price comparison but Gordon's seems to follow the Low price perception ploy while actually offering prices very similar to ours.

    However consider another fact that I didn't mention when expressing the opinion that some may be willing to except less margin.Isn't it easier to receive Chopped and joined frames and precut mats then to do the work in shop?And if you did have all your back room work done for you could you get more out the door and would you be willing to be payed a little less profit?
    I don't no the answers but some of it sounds good to this uniformed Framer.
    BUDDY
     
  49. dfwanna

    dfwanna Grumbler

    It may be true that Joanns profit margin is not the same as ours. The whole point that I am trying to make is that it will affect us all and Larson (our wonderful supplier) is helping them do it.
    How long should we continue being a loyal customer of Larson's before we realize that they may not be thinking of our best interest?... is my question.
     
  50. D_Derbonne

    D_Derbonne PFG, Picture Framing God

    Joanns has been less expensive all along.
    Before they were exclusive with Larson a customer came into the store with a quote from them and I couldn't touch the price.


    Does that mean other companies were giving them extra discounts too...competing for their business?


    I wonder how Larson's reps will cope if they start losing small shops since they don't get commissions from Joanns?
    Hmm...no commissions...could that be part of the difference in pricing?

    This thread is giving me reason to think about what is on my walls...to look for other sources for supplies but the reality is that a lot of our vendors seem to be dabbling in markets that compete with us.
    Larson is just bigger and more successful at doing it.
     
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