Discussion in 'Picture Framing Business Issues' started by Less, Apr 10, 2014.
A million times all this yes.
So I've been a customer of Larson's for over 20 years. I have spent a rather large sum of money there over the years. The rep came in the other day to tell me my discounts have been changed and I am now on there new pricing program. What a crock. I understand Larson's new boy wonder CEO has made some really bad decisions since taking over. This new "pricing" program along with the majority of Larson's moulding being overpriced has me choosing other options. :kaffeetrinker_2:
I am with you Mark.
Larson will lose more than Less
A big thank you to Omega and Don Mar and all of my other vendors for stepping up and supporting the Independent's
What a shame. I don't see anyway this will be good for Larson
I am wondering if independent are that important to LJ. ...
Anyone know what percentage independence are of LJ business. ..
I also have a feeling the pricing / discount from LJ is global. ...from some information I have seen. ....time will tell.
I guess if discount is earned.....business / orders will also be earned. ... there are plenty of suppliers out there who are prepared to earn business / order. ...
I do not do a lot of business with LJ. I am not a fan of their pricing structures and their "hoops" they want us framers to jump through, BUT I would never trashtalk them. I do buy from them, I do have customers that come in and actually ask for their product by name.
LJ is a large player in this field, and while they don't get a lot of my business they are good for my business. Before we get too far down the anti LJ (micheals,TK,Joannes) rabbit hole can we step back and be aware at least that they are a good influence and a good marketer for our business.
As a waiter we were urged to "upsell". When a customer is at the design counter we try to "upsell" the glass options, mat options and other options. I know LJ wants to get us to buy more from them, to buy less from others. I don't see how this is any different than our "upselling" to our customers. they are just being less "shy" about coercing/nudging us to buy from them. Where we use a "package price" or a discount to get a customer to upgrade to better products LJ is trying to get us to spend more to get that bigger discount. They are just a little too heavy handed for some of us in their approach. But it is business, and they will lose some of us, mainly us lower volume buyers, and they are hoping that they can push the people right on the line to go more with them and less with other vendors.
We can keep arguing the merits of that tactic but we really should not use that as an excuse to start up an LJ Bashing thread. We have been really free of those and I would really hate to see them start up again. It has been nice to be free of the weekly/monthly michealstkjoannesBBLJ bashing screeds
The way it was explained to me by my rep was that accounts were getting discounts in a very willy nilly kind of way based on business from years ago or some other unknown reason. People that were purchasing less were getting far greater discounts than some that were much larger accounts and there really was no rhyme or reason for the discount structure.
I, for one, would like to know that I'm on a level playing field with any local competitors that buy from Larson or at least have the same opportunities for the same pricing.
Yes LJ are a very good company....
However trying to have a one size fits all approach to customers / partners can very quickly turn sour....
The one size fits all approach has been tried by many companies I have use as suppliers over many years...none of them ended up sticking to it as it can prove to be very divisive. ...
Even my favorite computer company have backed away from that approach to selling.
For example for some of the products I sell I represent almost 100% of the market in my location which is Ireland...and for my suppliers that represents 100% success potential that I have obtained for them...
The same amount / value of product could be bought by someone in say NY city which would only represent a fraction of the potential market.... I would expect to get better terms for 100% sales success than someone only achieving a fraction of their potential market.
LJ is a great company and we all owe them because of what they have done for the framing business. Yes you can buy for less from someone else but over the past few decades they have done more than anyone to educate and make framing profitable for us. Yes they have made big profits in the past doing this but they have always been an indicator of the health of our industry. When LJ was making big profits so was our frame shop. Life is harder now and everyone needs to make changes including LJ.
I don't think that I have seen "hoops" in the 18 years I've been doing business with them. Discounts I have qualified for have always been based on volume. Standardizing that process and being up front and open about the numbers can only be considered a good thing. They are also not setting the bar too high to qualify for my level, either.
Pat when I started up I had to guarantee that I would be ordering $100 worth of stuff if I wanted to get the free truck delivery. Then it was I had to order $150 to get on the truck, then it was $150 each and every week, then it was $150 in molding only, glass and mats didn't count toward the $150 minimum.
So I got UPS a lot as my orders weren't each and every week. (I opened the week before 9/11/01 and went for weeks with no one on the street nevermind in the door). Then it was COD. Credit card/debit payments didn't count for the cash discount or for pre-pay discount COD fee was over $17 per delivery.
I consider those to be "hoops". Of course my rep was the highest performing LJ rep, so he didn't need to cut me any sweetheart deals to woo me away from the other vendors, and he didn't. Meanwhile the ones I did go to dropped their minimums and gave free truck delivery to help me out due to the timing of my opening. Had I been an LJ only shop I would have closed but since the other vendors helped me I have stayed loyal to them, with LJ I still have a bad taste in my mouth to how I felt I was treated by them. I don't wish LJ ill in any way, they gotta do what they gotta do. And so do I.
I thought the line about "owing" Larson for all it's done was hilarious. Also, the one about not starting an LJ bashing thread.
I don't owe them anything and stating facts about their operation doesn't equal bashing. I'm looking forward to receiving samples from other vendors who offer better value on their products. There are plenty of them out there who will earn your business. :kaffeetrinker_2:
Personally I do like the even playing field of the new structure, but I am admittedly biased because I am in the higher brackets. However, those opposed to the new system have raised an interesting point. I have another distributor who has been telling me for years that they can match the prices I am getting from the other distributors if I increase the volume I order from them. I keep explaining to them that I can’t increase the volume until I get the price I need. Why would I pay the higher price for a year in the hope that eventually I will get the same price that I am already paying.
I can’t presume to know better than Larson how they should run their business because I don’t know all of the factors that go into running a giant multinational corporation. All I can tell them is what does and does not work for my business. I highly recommend that if you are unhappy with a company, tell them. Maybe if enough of you communicate your dissatisfaction with this new policy they will agree that it is hurting their business. If you don’t tell them there is no chance that they will change their behavior because they will have no idea why they lost your business.
I think this new system is the first step in a more unified rule set for dealing with Larson. For example, I never had all of the rules that Bob mentioned imposed on me, but on the other hand no matter how much I complied with their requirements my rep never allowed me into the partnership program. It seems that company policy was far to flexible before.
I hope you weren't talking about me. I don't think I used the words "owe LJ" but a think my intent was to express appreciation for their running enough ads that my customers know to ask for them by name. Also if you have not seen our LJ and TK and Micheal's bashing threads in the past then be thankful. A lot of egos running around complaining that M,LJ,J and all other BB stores were robbing us blind and cheating our customers. They used to happen on a very regular basis and thankfully have not happened in a long, long time. I, personally would hate to see that long running streak of sanity end just because one of our suppliers is trying to stem a bleeding of income by heavy-handedly, in some people's opinions, encouraging higher volume sales from their customers.
Like I said they are not a big player in my shop, but they do have a presence and while I might not miss them I do have customers that would. I don't ant to lose a sale when a customer comes in, so if they are balking at the price of one frame and I can sell them 5 for less money each then I will give them that option. They may look at me like I am crazy when i say "if $250 is too much would $1000 be better?" but if 1 customer out of 5 takes that offer then I am happy. Isn't LJ suggesting something similar? I am among the 4/5 that say no thanks, but there are 1/5 here that seem happy with that strategy.
Ed, if LJ approached me now then I would have no problem "jumping throught he hoops" I listed, but while starting up, especially when I did those hoops were insurmountable. And to try to keep my numbers high enough for two distributors well, wouldn't have happened then, so I would have had to drop one of them. Not sure I want to be in the boat where I don't have the option to buy from someone else if I felt the need. Diversifying my purchasing options.
Well put. Totally agree.:thumbsup:
The discount programs don't work that way, i.e. at my level I get the 5 box price for glass when I buy one box. The discounts are based on annual purchase levels. The program should not be confused with discounts for large volume orders. It's just that you might jump to the next price tier without buying the higher number.
and another thing...
I let a LOT of defects etc. go because LJ treated Less well. There is no way Less can be as forgiving going forward. I had no room for a customer today that wanted a LJ frame. I had to show her another company's frame. DM also benefited by $300 today. Doesn't make cents to Less. This decision will affect LJ and Less almost everyday. This really gets me upset.
I hope Less gets over it soon.
It may be more of a Berkshire Hathaway mentality than the Larson of the past.
Our two major vendors in a different industry are relatively recent Berkshire Hathaway acquisitions. We can see quality and service suffering already.
One of them, you get what they ship regardless of your specifications. If you don't like it, send it back. No sorry. No OOPS. No offer to make what the product to the specifications.
I'm curious how many have tracked sales in years past with each vendor by categories (I.E. wood moulding, metal moulding, fillets, mat board by company, glass by category, foam by category, supply items)? (I did not track by category for each vendor, just gross sales)
After your LJ rep visited you, did you go back through your 2013 purchases and total by category to see if you fell into the assigned levels? ( I did)
Now that you have a vendor who has a published pricing discount program, will you be tracking in this way if you haven't in the past? (yes)
How could you use this discount program to your advantage? (I'll be throwing away Arqadia line products as they don't count toward your totals = quick wall and matboard clearing decision!)
How might other vendors respond? (haven't had any others in yet, so I don't know)
Is that the way it works now? If so, that's different than my understanding.
I really don't have a complaint about the new discount structure. I don't think our total weekly bill is going to change that much.
Here's what I'm hearing from Larson that I really like. They're steering away from Asia and more toward Europe for their suppliers. Even if the moulding goes up in price slightly, I think we'll all save due to less waste and frustration. I hope other companies follow suit.
That context refers to the example Bob posted that somehow the discounts required buying 5 items to get a discount in the new program. Various quantity discounts have always been part of LJ's pricing. I have had the 5 box glass pricing all along. The new program is straight % discounts for various categories based on annual purchases - very fair in my estimation and similar to what I have with Munn Framework's chops.
Thanks for clarifying.
Just an FYI, they are still offering regional and seasonal package deals that increase your buying power. Lakeland has a combo mat/glass/foam board deal that gives top level discounts with 3 and 5 box purchases. LJ is going to remain a little flexible in their markets with the most competition.
That offer is available in my area, too. Order must be made through rep.
Yes, those orders need to be called in.
I was talking to one of my LJ contacts and was offered this deal. However, after doing some research, they still couldn't beat the price of one of my other suppliers, where I can just order 1 box of something at a time.
I was informed that this new pricing structure is only for independent's, not the national accounts (big boxes, etc.)
The big guys get to negotiate.
I would call them pragmatists, not hypocrites. Having a program in place to deal with the 8000 (?) independent shops makes some sense when compared with negotiating a different deal with each one. How many BBs are there? M, HL, JA, and possibly the franchisers GFU, DTW, etc since they buy through the central HQ. No more than a dozen and that's being generous. Considering the quantity of products they buy and the number of stores each represents, LJ would be foolish to not sit down and talk numbers with each one of the BBs individually.
LJ always had a program in place, they simply allowed the reps to override it and make decisions on the fly and it was hurting their bottom line. I'm sure they are already looking at the reaction to the new pricing guidelines, both on line and on the balance sheets and will tweak it to do what they need it to do.
Funny, I never heard any of the other distributors accused of hypocrisy when they had a policy in place for earned discounts, and most if not all of them have those policies in place.
Oh, for the record, I lost a bit of ground on the mat pricing and gained a little on moulding, so pretty much a wash.
I think the bitterness comes from those who jumped through hoops to become "partners". Do they still call them partners? Many shops became partners by dedicating a percentage of space on their wall. Or to become exclusive to LJ. Even if they didn't meet the volume. I wrangled end column pricing on mats and glass without having to buy a certain number of pieces. I got a discount on length too. I never was a partner because I didn't do the numbers. They were all over the place with discounts here in Denver. We all talked compared notes. But we they had tons of competition here. There were two other local suppliers who did daily deliveries. It forced LJ to offer daily deliveries. Then one of the locals offered twice a day deliveries......kind of a turf war. I'll bet they will still be forced to compete like that in very competitive markets. They just don't want you to talk about it. They don't need to negotiate with shops who have no choices because they get their supplies coming in on a horse and buggy once a month. But the shops with other local suppliers are gonna be mad if LJ takes something away from them if they feel they earned it. Like Less who is smart enough to go elsewhere it they jerk him around.
I applaud Larson for being upfront about their discounts. However, the program, as I understand it, makes it very unfavorable for new businesses to even consider buying from LJ when they can buy from other suppliers at what is likely to be substantially lower prices. And if they do buy from Larson, they'll be competing with other LJ customers who may be buying the same product for a lot less.
Also, as a new business grows, it will probably have established, and valued relationships with its other suppliers so it probably won't want to switch. All of which makes me wonder if this shift will help, or hurt LJ's sales. My guess is that it will hurt LJ in the long run.
Paul, you probably have a better idea then most about exactly what percent of the market is made up of new shops, but I'm guessing the numbers are statistically irrelevant to a national pricing structure. With attrition it might actually be a negative number.
If the predictions of continued decline and consolidation of frame shops in the US holds true, it would make more sense for the suppliers to align themselves with the less risky and more profitable shops in the long run. LJ us not universally liked, as evidenced by this thread, and the loss of business from their recent change in price structure/policy may have been figured into the equation...none of us know. I keep thinking of the maxims that it is cheaper to keep an existing customer than it is to gain a new one, and that if you raise you prices by 10% and lose 10% of your business, you are still better off.
when LJ makes a "new policy" or a change in their practices it seems to me like they make that decision in a vacuum. By that I mean they look at their bottom line and act on what will bring in cash quickly, then have to scramble when the people that buy from them catch wind of their action.
For example, DocUMounts. When we found out that LJ was behind the fulfillment of all of DocUMounts framing we flipped out. Lots of us screamed here that they would never do business with LJ again. Then LJ heard our screams and the DocUMounts fiasco faded out of sight. Or Joannes. When LJ became the exclusive supplier to Joannes we all cried foul. Many again screamed they would never buy from LJ ever again. Then the Joannes fiasco faded, the screams here subsided and Lj weathered that mess up too.
And now LJ is deciding that they are going to offer every frame shop the same discount system. No more giving the reps any latitude. No more trying to "woo" the small startup shops. No more trying to compete with the more aggressive suppliers in markets like Kathy's.
Seems to me that LJ looked at the bottom line, saw discount %ages that were all over the place, probably with no rhyme or reason to the accounting department, and wanted to "streamline" the process. Now people are screaming here saying they will never do business with LJ again
My market is not competitive from LJ's standpoint, so I never got to finagle a deal like Kathy could. I couldn't even get them to give me free shipping or shipping free of COD charges. They must have felt like I had no choice but to put up or shut up in this market. Others, like Kathy got wined and dined. I just whined
So, for me LJ's new plan may make sense, I might be able to get a chance at the discounts, but Less and Kathy and others in a tight supplier market will be able to jump ship and save a lot of money. I don't think LJ saw beyond their immediate bottom line. Again.
Come on folks.....Just because a few grumblers don't like LJ does NOT necessarily mean that they are not "universally liked". This forum does not represent the entire framing industry or for that matter, a representative cross section of the industry. It represents the narrow views of about 6 or 7 framers out of thousands, many of which don't even visit "the grumble". And those that do, (evidenced by the # of views vs replies) only stalk, not daring to get involved in the discourse.
I, for one, have been a Larson Juhl customer for over 32 years and have been more than pleased with their product, service, pricing, sales reps and overall business. They helped me grow my business to what it is today and I appreciate the long relationship I have had with them.
The fact that Berkshire Hathaway would even consider acquiring them should be a testament to their strength as a business model. Others should be so fortunate.
I do get a little weary of the continued LJ bashing.
Our region was run the same way. It's simply taking discounts that were unstructured and unfair and creating a fair and structured program. I would do the same for my own customers.
I'm aware of shops that were not getting a discount even if they hit the new minimums. Does this mean that they are offering discounts to shops that didn't get them before?
The whole point is that if you qualify based on purchases, you get the discounts.
Separate names with a comma.