June 27, 2017

Dear cheapest retail

July 19, 2012    Markets and CompaniesРаспечатать эту статью

Dear cheapest retail

Disputes between suppliers and major retailing has become a tradition: from the popular retail payment requirements for the various “actions”, bonus and premium rebates, which are less satisfied with entrepreneurs and suppliers. If in normal times, businesses are suffering, that in times of crisis such disputes escalate into serious conflicts. Small firms experiencing shortages of working capital, business networks refuse to pay for all this “stuff”. Not seldom disputes are resolved in court.

A striking example is the trial between the firm “synchronize +”, a supplier of clothing and footwear of Chinese and Italian, and the company “Metro Cash & Carry” with which they worked together for five years. Then the “synchronize +” with the trial back about 2.5 million UAH, that Metro wrongfully demanded as bonuses, discounts, and other questionable payments. For example, do not pass on the accounts (or could not be included in the section “expenses”) paid advertising campaign, which even in court no one really could not explain what has been done on these promotions, it is not clear. At the request of the judge were to bring acts of acceptance, but it was not in response to a newspaper brought the «Metro-mail”, where the posted photos of products, without a sheet or a firm-supplier “, – says Vladimir Minaev, senior partner of” mine and Partners “law firm, which leads into a court and a few similar cases.

We offer you the story of the owner of “synchronize +”, who wished to remain anonymous, about working with “Metro Cash & Carry,” and about the internal problems of the workers:

“At the beginning of cooperation with” Metro Cash & Carry “is proposed to sign a contract in which there is extensive application of concessions, which they expect to hear from you. There are all the bonuses that you have to pay such bonuses depending on the volume of deliveries, paid promotions, or any other charges. Opening a new store network “Metro” – participated in the discovery and pay fees, at first it was € 500, then the levies increased tenfold, to € 5,000. In addition, they often arrange one-off event. For example, a birthday network demanded a discount of 1% of our deliveries.

Another problem with returns: it happened that the Metro does not accept the goods ordered. First name and asking the manager to bring the goods and when to bring, say that he has no use to them. No formal pre-orders is not done, advances are not issued, we carry all their own expense.

Although at first we were happy with the work of “Metro Cash & Carry.” This is a great company, and through its extensive network of retail stores, they can make a good income of the company. But only the best of circumstances. We bring the goods to the warehouse, we ring and tell about it, if the buyer is a moron, he made a mistake, not chosen, it is still our problem, not theirs.

Or, for example, ended the season, and we say, “take out the remnants, or do not even think about the supply for next season.” But we have already booked and brought his own expense produce the next season, it is in our warehouses, we’ll do with it? If the book in China, produce the goods they are 30-45 days, 45 days – delivery to us. The cost will be considered conditional, $ 100,000 in China, $ 50,000 on the design and delivery, for a total of $ 150,000 of products already have, and placed an order taking into consideration all of the network: the specific model, color, packaging special, with a brand name. And here in Metro buyer says that he can not take it. This product know what to do, any of its markets will not take. Cost of one thousand hryvnia, and the buyer says – eight hryvnia, not more. Not satisfied – good-bye.

Over time, we have become accustomed, and arranged under their “system” – if you are asked to supply, for example, $ 100,000, saying the $ 100,000 does not work, let’s at $ 50,000, and it will be beneficial to both parties. And their buyers are generally headache – one says to bring the goods in a certain kind and variety, okay, supply, and there is another buyer, with the terminated contract. And this is already refuses to accept such an offer. Each new buyer will only work with their suppliers, with its own rules of work. They have an annual sales plan of only one department of clothing to € 100 million in 50 stores. Naturally, they think themselves gods. If they say “jump”, you have only one question – “how high”.

First, competitors have been more than enough, everyone wanted to work with Metro. During the crisis, wanting reduced. And not all companies have the capacity to supply goods to 50 stores, for the revolving fund must be at least 25 million UAH. And the situation with the delays? Initially, our grace, for non-food products accounted for 40-50 days, now 90. Six months to order the goods from the manufacturer, payment, delivery, delivery to the warehouse Metro, and another 90 days on top. Total out nine months before the earnings from the investment, and this means finding sources of credit, factoring. The stakes in the banks before the crisis, factoring was 12-15% per annum. Then you need to add the price of an additional 9% over this period. And then you returned the remains and implement them as much as the next season – a year later. The probability of profit is practically reduced to zero. Almost impossible to guess – how much remains returned without splaniruesh.

“Metro Cash & Carry” compels us to take back the goods sold. And factoring is a way to pressure, as a loan you can take only Citibank, which has a contract with Metro. It is clear that we have suffered costs by factoring products, and if there is no receipt of proceeds, the bank applies the penalties – fines reaching up to 70% of the loan.

Even before the crisis began to work with “Metro Cash & Carry” was tolerably well, and buyers were adequate. But after a change in leadership the situation has changed dramatically. Then called our representatives for negotiations with the Director of Procurement. It happened this way: he took the paper from the records of all of our speed and discounts, and demanded from us another € 300,000 discounts, arguing that «Metro nedozarabotalo on you.” Then we asked, what will happen to the goods that we brought to order Metro, whether they take it? He promised to think about after giving discounts. This was the last straw, and we decided to break them in the British flag. Working with “Metro Cash & Carry” has ceased to bring us any profit, the sense of cooperation will be reset. Actions “Metro” was wild. In addition to us, such proposals have received five more companies. Even those who have agreed to “draconian” conditions for six months had to abandon working with Metro, because they simply do not have products for next season. For five years, sales of our cooperation with “Metro” was about 25 million USD and profits obtained by us – just € 300,000. What to do when we were asked to give all earned? Who will work roughly the steering wheel? The remaining product then we hardly sold at sinks and markets throughout the year.

At the beginning of our work at the Metro was willing to supply more than they could sell. But today everything has changed. Postponement of payment of 90 days, Discount 26% of our turnover. Now we are with them sudimsya. In the first instance we have won, and I would like to pay a lot. For example, money for advertising campaigns, which they allegedly carried out. Any documents are not accompanied by action, and now they can not even say what it means to our “adverted.”

We have tried to include these shares in our budget, such as their plan. But the new levies can not predict, they are neither baseless. Simply said, the purchaser to collect from suppliers € 150 000, he collects from all little. And if you do not collect the necessary sum, he would be fired, and then work with the new man – again, restructuring, expenses, losses.

During the opening of a new supermarket network – a contribution of € 5,000. I asked, can, will co-owner of such investments? They say that to say that I just shared with them. At the end of last quarter – the collection of all the bonuses, with our company took € 20,000.

Most transactions are not securities, by oral agreement. No signatures, approvals – just put a document which is, in a special box, a cell for each vendor. Do not like something, complain – suspend delivery of your company.

There are only two days for payment, Monday and Thursday. In practice – how much credit the want when they want. And at the end of the month deductions, do not translate anything, but here is the bank demands repayment of loans, overdue totals.

When compared with other networks, the «Metro» the most significant exactions. We asked his colleagues, this is not anywhere else. The “Auchan” levies of up to 12% in our Metro – 26%. And all this is added to the price. And the retail margin is greater than the “Auchan”, about 30%. However, 56% of our costs – OK! So they get their billions around the world. “Metro Cash & Carry” work only with those who want it, just do not want – good-bye.

Our company is certainly negligible. For large suppliers, and they have a different approach. Told about the distillery “Cristall”, when they wanted to take the money in honor of the birth of the network, they just took it, and stop delivery. Then the next day had to go apologize to the purchaser, they say, been misunderstood. When you have a cool brand, a large share of the sales report, you can bet and conditions.

Of course, we would like to continue working with the «Metro». But circumstances are not in our favor. For deliveries to the 50 stores need a $ 10 million, is for a normal start. Filter out small-scale entrepreneurs. Well related to suppliers now Metro is poor. ”

We present below a formal response Oksana Tokareva, head of the “Metro Cash & Carry” on the external and corporate affairs. “Retail trade networks sign contracts with suppliers, supply agreements with the specific elements of service contracts in which the prescribed conditions for discounts. This is not a trade secret, everybody knows about it. The essence of the provision of discounts and services that it can significantly reduce the price of the consumer, based on the optimization of business processes, maloraskhodnuyu and efficient operation of retail supermarket network, a high rate of turnover of sales. This activity is beneficial to us and to suppliers, particularly large enterprises and large producers. All discounts offered by suppliers, are in print and electronic form and pass through the accounting department. The amount of payment varies based discounts. We operate in full compliance with valid legislation.

Controversial issues of supply, which can be solved through the courts, often associated with the wrong paperwork suppliers. The number of our suppliers – about five thousand. All calculations were performed in automatic mode, if the suppliers have provided time to correct invoicing. All requirements for their design are registered in the supply contracts. Unfortunately for us, in practice, not all providers adhere to established rules. We also happen to differences over the number of products brought to the warehouse, from which stem from the complexity of payment. This happens when we ordered products in one volume, and deliver it in less. Then do not agree to supply documents and receipt of goods, which reflect the actual volume of goods which have arrived to us. Despite this, we do not consider such disputes difficult, it is normal for the activities of a large company. We did not find serious problems in the “Metro Cash & Carry” with suppliers, which may affect our cooperation.

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