Credit or Bust?

My customer portfolio consists of many types of businesses working within the same industry. From retail to interior designers, and from curtain makers to upholsterers, but they all have something in common, and that is supplier accounts.

The types of accounts they have can vary. I have customers that like or don't mind paying pro-forma (payment before release of goods) and the others have credit accounts (payment after receipt of goods on an agreed time period). Since 2008 credit facilities have been cut back and companies are now more prudent when offering them.

To determine a credit account and the level of credit permitted a company will carry out checks with credit reference companies similar to what you or I experience when we make a credit purchase. If an account is borderline, then further references may be obtained from other suppliers and/or a pro-forma account is opened for a pre-determined period until the company is comfortable to offer credit facilities.

Why offer credit facilities? Business isn't always just about the odd order here and there. Many of my customers work on projects either for individuals or companies such as Hotel chains. The timescale of these projects can be months or even years, and it is in these instances that a credit account is invaluable. It enables the specifiers to obtain and supply product as and when required as invariably, these types of projects are scheduled payments or payment on completion from their client.

This brings me to a story after being reminded from, shall we say "an opinionated discussion" with the accounts department of one of my principles.

Just over 2 years ago I negotiated and obtained an account with a well known multi million pound national furniture retailer that was just breaking into the wall covering market. This account was potentially going to be one of my biggest, and as you can imagine I was pretty excited about it.

Having had long discussions about their plans, negotiated volume prices, delivery, how the wallpaper was going to be used in their stores, guidelines on how we expected it to be marketed and sold online and the volume they expected to turnover, I proceeded by sending in the account application form and waited in anticipation.

And then, the email confirmation I had been waiting for pinged in my inbox, I eagerly awaited the page to open and then read, we are very pleased that you have chosen the ? brand to be represented in your stores and can confirm that we will open an account with £ credit facilities! My heart sank, the limit would barely cover the first order for a shop refit, let alone a stock order for 20 stores! I argued my case but it fell on deaf ears, the client wasn't best pleased, but over many weeks we talked and discussed but the end result remained the same.

After a few months of trading they came back to me again and wanted the limit raised, again I went to the accountants, again I was told no and this is how it went for months and months.

This week, that very same furniture chain went into administration with colossal debts, and if wasn't for the prudence of the company accountants, the company I represented could have had a significant debt which would have had a major impact on their business.

Credit facilities serve a purpose and keep the wheels of commerce in motion, but only when managed correctly.

John Northwood

The value of quality

After many years of saying it, the time in my life has arrived where I am now turning into my Dad! Not a bad thing as he was a lovely man, but there are sides to a parent that makes you say "I shall never be like my Dad". To my kids I am now a grumpy old man that can moan about a moan and spend too much time in front of the 50" TV screen every night complaining about programmes that are similar to what I used to watch back in the 'good old days'.

I suppose it started about 8 years ago when me and my now wife Jane arranged a special holiday to the Caribbean. We needed (well, wanted) new clothes and on Jane's suggestion I decided to buy some designer tops and footwear. At the time of purchase I was happy on the outside but hurting on the inside. Thoughts going around my head like "how much for a t-shirt, I can buy three for that!"

For our wedding in 2007 I invested in some, at the time, expensive shoes for the comfort of having to wear them all day and night, and those same thoughts were coming into my head.

Then, on 14th November 2009 an event happened in our lives that changed my whole perspective on the value of quality.

14th November was a Saturday, me and Jane had been to the shops and on the way back we suffered a side impact accident that was proceeded by the car taking out a road sign head on, a power box for operating the traffic lights leaving exposed cables under the car and then finally coming to rest through a wall. All the airbags deployed (not a pleasant experience in itself) and although not life threatening, Jane suffered injuries that resulted in surgery. Me, despite the car being hit my side I only suffered whiplash and minor damage to my coat.

First impressions of the car doesn't look too bad. However, to put into context, the impact was so hard the other car that hit me had it's front end ripped off with it's engine left on the road! 

So, you ask, where is this taking us? The moral of the story is the value of quality. The T-shirts I purchased for the holiday I still have, my shoes for the wedding were the most comfortable I have ever owned and still wear them today. And the fact that I chose a BMW over a cheaper brand as a company car means I am here today to write this blog.

The same applies today to the brands and products I represent. My answer now to anyone who says it is too expensive is, "compared to what?" If you are comparing like for like then it is a fair comment. If it only looks and feels similar to a cheaper brand then no, it isn't expensive! Appreciate the quality, how it can be used and who by before asking the price, then decide if it is too expensive.

The cost of my BMW £30,000, the cost of my life, priceless.

John Northwood

The value of your working environment

I am now approaching my 40th year in the interiors industry and I have many fond memories of places I have worked, people I have worked with and those that have inspired me.

One of the most memorable periods in my career was back in 1976/1977 when I joined a local furniture retailer named Dodimead. It had been a traditional family run business for many years and an established business in my hometown.

The manager was a wonderful man named Arthur Mitchell, and my one year working with him was the best time ever during my working career. I did something then that you would never consider today, and that was to take a 60% wage cut to join the business, but, through the education I received from Mr Mitchell (which was what you had to call him) it has been invaluable throughout my working life.

Under Mr Mitchell's guidance I learned all about 'real' furniture like handmade cabinets, upholstery, the elements that made a good bed and the difference between a good carpet and a cheap imitation.

This is also where I learned the values of a well presented showroom. It doesn't start from the time the customer walks in the door, it is from the time they see your shop for the first time. First impressions, no different to my role now. My appearance when I visit a customer is very important, it's me as a person they see first before anything else.

Every morning (and I mean every morning) my job was to collect the litter and sweep the pavement in front of the shop. Once a week I had to clean the windows and remove any weeds that dared to appear within our space!

Now we are in the shop and it was spotless! Carpets vacuumed at least once a week, and in the Autumn as and when required with leaves and dirt coming in through the main door. Display had to be clean, free of dust (inside and out), and this included the tops of cabinets that I could barely reach. One of Mr Mitchells favourite pastimes was to run his fingers across the tops of the cabinets and wardrobes checking for dust as he walked through the shop!

The window displays were as Mr Mitchell would say "are the showcase to our business". Every 3 months the walls and fabrics would be changed to represent a new season. Every 2 weeks we would have to change the furniture. This meant either replacing the upholstery, changing the cabinets or even something as small as swapping over the occasional tables and pictures.

The price always went on the correct ticket, even for sale items. In Mr Mitchells eyes, a crossed out and re-written price ticket was a sign of laziness and desperation to sell the item. price tickets had to be correctly positioned, sample books tidied away and no loose cottons or labels showing that shouldn't be.

Although the business was mid to top end quality, Mr Mitchell adopted a clever method of display to attract all types of customers into our shop, and this is a method still used today by some of the multi nationals.

The front of the store consisted mainly of the keener priced furniture and accessories with a small mix of the mid priced products. From the outside looking in we seemed like a keenly priced furniture shop. As the customer walked through the store the prices of the furniture and upholstery would gradually increase in price until you had the most expensive at the back. You had effectively drawn the customer into the whole of the shop. And can you guess which products we sold the most of? Yes, the most expensive goods at the back of the shop were our best selling lines, regularly!

I enjoyed over 20 years in retail, and when I had my own Bed business in partnership with my brother, I adopted the same principles that I had been taught by Mr Mitchell, and they never let us down.