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Jerry-NetherlandHamilton Nolan
6/16/14 2:40pm
Being a buyer for a major Department Store chain has always been the juiciest gig in retail. I knew a woman back in the 1970s who lived like a queen as the buyer just for ladies casual wear for a major chain. Unspoken were the unlimited kickbacks, bribes, and perks that enabled her to live like Jackie O during a horrible 5 year recession, when everyone else was tightening their belts. Why would Target be any different from [rhymes with Lacy's]?
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  HiMyNameIsJayAgainJerry-Netherland
  6/16/14 2:49pm
  I've never heard of Tracy's.
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  AudibleNodHiMyNameIsJayAgain
  6/16/14 2:54pm
  John Wayne Gacy's?
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BlatheringHamilton Nolan
6/16/14 2:42pm
Okay, since I'm always the dumb one around here, I'll ask: I have no idea about how retail works. What does a buyer do? I mean, I know they meet with vendors to arrange for stuff in the store. But the mechanics of it elude me.
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  ZephyrMarieBlathering
  6/16/14 2:50pm
  Buyers essentially forcast and 'guess' at what items will sell well in each region. They then deal with the vendors on cost/shipping etc. to get those items into the stores. They also get to deal with markdowns, vendor returns etc etc which isn't pleasant, and since they are essentially controlling the supply chain the kickbacks are amazing and salary is really good... unfortunately they're also the first ones who get destroyed if sales aren't met or their forecasts are wrong.
  
  I have a degree in supply chain/logistics...it's a great field if you don't have a life.
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  jennyfromtherockZephyrMarie
  6/16/14 3:50pm
  I'm on a huge supply chain/logistics case. I can't tell you how painful it has been to learn this industry. Worse than pharmaceuticals.
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PhlegminglibHamilton Nolan
6/16/14 4:04pm
As a former major consumer electronic brand product manager who sold to every.single.one.of.these.retailers:

1) The buyers have more power than you can imagine.

2) Not saying they do, but the buyers can get fairly wealthy fairly quickly, especially if you're a buyer for DI (direct import) and you have to fly to China and other LCC (low cost countries) to "source". Imagine taking a percent kick back on $50M of buy (not a huge category in CE), that's a lot of dough. I've seen buyers or their intermediary "white gloves" ask for as much as 10% of the DI value. Thankfully the companies I represented were all upstanding and ethical, and we did reject these requests.

3) The VI mentioned is often called the MDF - Marketing Discretion Fund. Basically it's a margin machine that almost every retailer scams every single brand for. Best Buy is known in the industry for being the absolutely worst bend-over and take it up your ass MDF schemes. There are two types of MDF: Front End and Back End MDFs. Front end MDF is when you pay upfront for an ad, back end MDF is typically coupons or rebates you pay. Imagine paying half a million dollars per quarter for a small corner ad on Best Buy's flyer, who do you think pays for that at the end?

4) You're expected to do DI (which in the buyers' mind should be *cheaper*) even if you're a name brand, but they still expect you to pay up when it comes to MDF. So we markup our DI, which then the buyers who also do private branding (i.e. Insignia, Kirkland, etc.) for the retailers will complain on why we're so much more expensive. Because we need to pay for your stupid MDF and other programs whereas these Chinese vendors DON'T, MORON.

5) A "Price Point" in my arena is $10, half a price point is $5. Buyers hate half price points but when it comes to OPP (opening price point) items that sell for $19.99 or below often times you have no choice whatsoever.

6) Walmart doesn't like to deal with these back-end program BS and therefore surprisingly are usually the preferred customer for many brands to work with, we also had better *net margins* at Walmart because there is no fucking front end or back end bullshit. Walmart buyers are also very frugal, they're tough but they're also honest. Some people here may not like Walmart, but I did like their buyers because they're so straight forward to deal with.

There are A LOT more but I've spent too much time typing this already.
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  SrBuyerHardlinesPhlegminglib
  6/16/14 5:51pm
  any stories about entertaining buyers/mm/vps.....if you are in CE the stories are legendary and very true
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  PhlegminglibSrBuyerHardlines
  6/16/14 11:18pm
  I've been sworn to secrecy...can't dish anything except maybe a memoir before I die...
  
  Oh the fun you can have with buyers in Asia on company dime...ohhhhhh hohohohoho!
  
  I left CE and retail when the party pooped in '09, but for over a decade it was awesome: in Vegas in January, offsite advisories in the spring and sometimes summer, and 3Q meetings in Asia for the spring reset.
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PragmaticSquirrelHamilton Nolan
6/16/14 2:44pm
So while this is all appropriately depressing and spirit crushing for a Monday - how big of a variation is this on any large retailer in corporate america? Do we have information that Walmart, Amazon, Sears, etc. etc. are any better? Because it seems like we just had the "Amazon sucks" round of emails. Now we've got Target. Next week, Sears? Are we simply saying "corporate culture sucks", or "large company culture sucks"? But what is the alternative? Companies grow, mom & pops become Targets.

Or is the hope that by reporting on it, this will effect some change? I certainly hope that's the case, but I have trouble believing that insider reports will ever change corporate culture. Maybe that's just the cynic in me, though.
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  rmric0.wedding.photographerPragmaticSquirrel
  6/16/14 3:12pm
  Does Amazon have buyers?
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  PragmaticSquirrelrmric0.wedding.photographer
  6/16/14 3:18pm
  You mean in terms of people who negotiate deals with larger vendors (Apple, Lenovo, Calvin Klein, Black & Decker, etc.)? I mean, they might not have anyone who manages vendor relations, but that seems a bit unlikely. They might not call them "buyers" per se, or have them actually purchase goods to stock shelves, but I would imagine they have roles to fulfill a similar function. Albeit modified to fit Amazon's business model.
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TRUMP DELENDUS EST (fka Chatham Harrison)Hamilton Nolan
6/16/14 2:56pm
The fundamental problem with retail is that mid- and high-level managers will always be tempted to take the rain dancer over the analyst. The rain dancer may not perform any better than the analyst, but they show a real commitment and drive that the analyst can't match.

I can't recall, in my profession, the number of times I've seen predictions of declining business (due to weather, or the end of a major event, or a holiday) dismissed as defeatism and excuse-making. Then they get angry when payroll costs increase. There's no better cure for the myth of rational expectations than watching businesspeople at work.
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  Meander061TRUMP DELENDUS EST (fka Chatham Harrison)
  6/16/14 3:38pm
  There's no better cure for the myth of rational expectations than watching businesspeople at work.
  
  When I was in sales, I used to tell my wife that at the end of each sales month, we were "sacrificing small animals" to make our numbers. It wasn't true, of course, but the spirit was certainly there.
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ThebluefishHamilton Nolan
6/16/14 2:59pm
Buyers for large businesses is a great discussion topic. I helped my father attempt to bring up some products to the nation, so I have a bit of experience with this. One thing that was failed to be mentioned here were the brokers, the "ex-buyers", what happens when a buyer retires.

So a buyer retires and leaves the company, however there aren't many buyers at a given time. Politics plays out and the buyer leaving the company is real good pals with the current buyers there. These "retired" buyers can in many cases become brokers.

An example is the startup that my father co-owned and that I helped during the process called Snap Capps (later to be bought out by big bully corporation, Telebrands). The general idea is that if you try to bring a product directly to a buyer, it just isn't going to work. They don't know you and they don't trust you. They have plenty of product coming through and they don't care to go through those loops. That's when you network around, find someone who used to be a buyer for that company. If they have ties with the current buyers, then they can generally get your product into the store for 10-25% of the net sale.

A broker might bring in 6-8 products a year. However unlike the buyer, the broker is making money like no other. For example, at our estimated sales for Snap Capps (and based on sales trials at select stores), a broker for Wal Mart $150k-250k a month for instance. 6-8 products with similar margins a year coming into the store for 5-10 years or longer meant that they were the ones who really made it out with the cash.
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  lilmissstilettosandgritsThebluefish
  6/16/14 3:15pm
  I'm a broker for a LARGE independent. We rep 60 lines. At 5% of net sales. We are talking pennies per item. It is cheaper to higher us than to have an internal sales force- We have a retail salesman in every single store in our territory once every 6 weeks. It's hella expensive. I am not a retired buyer, nor is anyone in my company. I can tell you the experience you had is unusual. You got screwed. There are some brokers out there that operate like this, but they are short lived and chains won't typically work with them anyway. Not to mention that a category manager for a large chain only works one category desk for a year before they are rotated- To keep the type of relationship you are mentioning from ever becoming a factor. Our lines use a broker because we are an independent sales force. We know the industry, and because it is commission sales, we have skin in the game. It has nothing to do with trust, and everything to do with the majority of folks not understanding how the business works. If we got in 6-8 products a year, we would be bankrupt. We get in 10-14 products per month, across all chains, and then continue to work them, promote them, and keep them in. We explain all of the investments that a vendor will be required to make to do business in a chain- And trust me when I say the entry barrier is HIGH. One well known SE chain requires a $20,000 per SKU slotting offer to even CONSIDER putting your item in stores. Small vendors can't pay it. They also don't have the capital to keep up with demand, so that slotting fee is there for a reason.
  
  I don't know who you used, but I don't think it was a normal broker. If it was, this was an incredibly poor contract, and an atypical one at that.
  
  Last, Wal Mart refuses to use all but a select few brokerage firms. They want firms that do things their way, and won't bring in every BBQ sauce made in a bathtub. I would be shocked if the broker you mention was actually certified to call on Wally World.
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  lilmissstilettosandgritsThebluefish
  6/16/14 3:49pm
  I just read the Snap Capps Wiki- Looks like a few bad deals were made (Any time I see "exclusive" a whole lot of bells go off.) That said, it also appears to be in some sort of licensing of the patent with Telebrands? Who holds this patent? I've got a lot of questions- I don't know if it is relevant, but I may be able to give some advice. If you would like it. (No, I would not represent this line- But. Looks like the little guy may be missing out on some things, and that is my specialty.)
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thingsandstuffHamilton Nolan
6/16/14 4:09pm
It's common to agree with an idea to someone's face, then criticize it behind their back later. It's common to be passive aggressive.

After reading this Gawker series, I don't think anyone is questioning that Target employees criticize each other behind their backs.
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f'(AllNeonLike)Hamilton Nolan
6/16/14 3:13pm
Hamilton: I'm a merchant (buyer) for a large ($50+ billion revenue) retailer in the US. Much of what is contained in this write up is standard merchandising practice, but is written to sounds worse than it is. Forecasting, comp shops, vendor funds negotiations, etc. are all part of the merchandising role for any retailer.

I consider myself an extremely ethical merchant, and feel that the best customer service, products and programs come when our company makes money, our suppliers make money, and the people working in the stores are happy with the selection they've been given to sell. And even with that, nothing in this write up really enrages me. Hell, it sounds like a normal day at my job, with maybe a few more office politics thrown in.

While I find Target's anti-union policies incredibly gross and counterproductive, I don't find much else in this write up to be outraged by. Well, except the company keeping frequent flyer miles. That's bad.
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bigfatweirdoHamilton Nolan
6/16/14 3:40pm
I really don't feel bad for retail buyers. The real victim in this scenario is store management and their staff. They don't get a say in setting their sales forecasts - their goal is handed down to them by corporate and they are told to "make it happen." They are powerless to change things that actually influence the consumer, such as price, advertising, in-store displays and product placement. All these things are dictated by corporate. The best they can do is convince front-line minimum wage workers that it is in their best interests to work harder, smile, keep a clean store, and be grateful for the pennies they earn.

Meanwhile, buyers earning their six-figure salaries are boo-hooing about their corporate culture if their bonus is anything less than the top of range.
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  Count Fenringbigfatweirdo
  6/16/14 4:19pm
  This needs to be starred hundreds of times over.
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CCCHamilton Nolan
6/16/14 2:42pm
I'm more concerned with the geniuses they hire at cashier. I always bring my own bag. (Side note: Hey Target, ditch the damn plastic bags). About one out of every two times, the cashier looks puzzled, then will proceed to put my things in plastic, then put them into my own bag. Kinda of defeats the purpose. Then god forbid you get a Blu-Ray in a security case. It takes several people to figure out how to get the blu-ray box out of the security case.
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  CylaCCC
  6/16/14 2:45pm
  As an employee at Target I can attest they basically do no training. My first day on the job was being thrown to someone who was only working there for 2 weeks prior to me to train me. It's not like we have an IQ in the single digits, there is no training. It probably took several people to open the security case because none of the other people were shown the process on how to do it.
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  theunpossibleCCC
  6/16/14 2:52pm
  I have an idea! Say "I brought my own bags, thanks." and end the confusion instead of being a silent, passive-aggressive judgmental dick.
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