HOME GENTER MERGHANT

Bill Fishman

Bill Fishman & Affiliates 11650 lberia place electronically transferred from the San Diego, Ca. 92128 retailer's accounts payable to the supplier's accounts receivable.

fr esHIen Mary Jones at srore unit

VNo. 105 scans a customer purchase of a model C300 hammer. A few minutes later another cashier, Betty Smith, also scans a purchase of a model C300 hammer. Automatically the computer is triggered, indicating that the store has reached the reorder stage for the C300s. The computer immediately cuts a purchase order. Within seconds that order is transmitted electronically to the supplier.

The supplier fills and ships the reorder. The master carton is stickered with a UPC label that indicates there are 24 C300 hammers inside.

When the order arrives at the receiving dock of store No. 105, the receiving clerk checks the contents of the master carton and scans the UPC label electronically, authorizing payment to the supplier. Funds are then

This technology does not lie somewhere in the future. It's here. Now. It's being used in the supermarket industry and the mass merchandising industry. Get ready. It's on the way to the home center industry.

The key ingredient in the process is called EDI (Electronic Data Interface). It enables the retailer's computer to talk to the supplier's computer and the banking computers. A lot of cooperation from retailers and suppliers is required for it to work. Most of all it requires standardization.

The process starts with UPC (Universal Product Codes) printed on the packaging of the merchandise. For the system to work for the benefit of the entire industry, these codes must be identical for each retailer. (Unlike SKU numbers which are different for each retailer.)

The communications must now be compatible from the retailer's computer to the supplier's computer and eventually to both bank's computers. illiirill:4r.rir':!r.rril| rt.rtilutt!i1ujit0$|tltls{lid5fri:i!:i3i&li&r,,..

Some retailers today are utilizing the Eagle System which is one of the compatible EDI systems. More are on the way. But, the industry must make a move now to demand compatibility of the systems before we become entangled with a mish mash of electronic data that brings us no more than additional paperwork and obsolete expensive equipment.

Coming in March at the 1989 Home Center Show, every retailer and every supplier will have an opportunity to hear and be heard on the topic of UPC and EDI. Three professional programs are scheduled to discuss the benefits and the pitfalls of this electronic phenomenom.

If you think it's someone else's problem, you're wrong. You will be involved in UPC and EDI in the very near future. Not with 1000/o of your product offering. Maybe never with lumber items. But, a large portion of your fast-moving hardlines will be on a system.

We still have humongous auto repair bills because the automobile industry never got together to make sure the bumpers line up. Computer system obsolescences in our business have wasted hundreds of thousands of dollars for retailers in our industry. Don't let it happen again. Get involved now. Keep up with tomorrow's technology.

WAYNE GARDNER executive vice president

GOvgwt{ERE along the path of life fil tiris saying was presented, "Nobody ever sells anything - they create in the prospect a desire to buY."

The mass merchandisers really don't sell anything. They put large sums of money into advertising in the newspaper, in direct mail pieces, and television. All this material is literally screaming at the prospect"our prices are the best in town. Come let us suPPlY Your needs." They are creating in the prospect a desire to buy based on price. That's fine. Let that person go there and buy based on price.

That same prospect has a lot of unfulfilled needs that can only be satisfied by a broad range of Products, qualitY merchandise at the right price, fast service, knowledgeable and courteous sales people, and, perhaps, credit terms' The retail lumber dealer can and does fulfill those needs.

Additionally, a contractor can order an entire material list for a house or a light commercial building from the retailer and receive it as ordered.

Your trained sales staff can create in the prospect a desire to buy ifthey want to. But they must understand that your firm's position is not to be competing with the "big guys" based on price all the time. Create the desire to buy based on superior service and better quality merchandise.

Shop that "big guy" and let your people know what they have. Here are a couple of examples that have been cited to us within the last few days. A 790 item with a brand name and a one year expected life was at "the big" whereas a similar product, same brand name, sold for $1.49 at the lumber dealer's with a seven year life expectancy. Better value, but the prospect doesn't know this just by looking at brand names in an ad. Your sales people have to be alert to those situations.

In another instance, an item sells for $39.99 at "big guy." A similar item sells for $79.99 at retail lumber dealer's. It is advertised by "the big merchandiser" as having certain capabilities, although the label on the tool says it doesn't.

Buyer breaks tool at first use. The item is not accepted as a return because of improper usage.

The $79.99 item performs over 300 times at same function that the "cheap" product failed on a first try. Plus it has a replaceable part for less than the "cheap product," making its usable life indefinite. Your prospect has to be aware of these differences.

Get your people trained. Make sure they know your products. And go after a market segment that is not necessarily the same as your "competitive" giant discount house down the street. You can't beat them on price. But you canr with a properly trained staff, beat them to death with service, quality and all the good things this lumber industry is known for.

Remember - nobody sells anYthingwe create in our prospect the desire to buy.

GARY L. SMITH executive vice president

"Terms" caught my eye. It consisted of a listing of personal attributes that may have different definitions depending on who perceives themthe person referred to or someone attempting to read between the lines.

The Merchant Magazine 24 $iifllh\ffiTec{sntiiil:s.'{rF. Lumber Merchants Association of Northern California 1055 Lincoln Ave,, San Jose, Calif. 95'125, (408) 295-4103 coP|$YJUi'B 12.5 lb. and 62 lb. sizes Profit from Beadex All Purpose Drywall Compound for Good Reasons: o simpte to Appty o Low Shrinkage o E?sY Sanding o Asbestos Free o Do-lt-Yourself Appeal o Pre-mixed, Ready to use o Less Working Time o ldeal for Taping Joints, Finishing and Patching . Step by Step hstructions BEADEX MANUFACTURING COMPANY, INC. 833 Houser Way North, Renton, WA 98055 (206) 228-6600 1325 Et Pinal Drive, Srockron, CA 95205 (209) 462_6600 11115 S.W. Industriat Way, Tuatatin, OR 97062 (503) 691-0820

For example, if someone referred to himself as forceful, his mate may redefine that trait as argumentative. I've taken the liberty of stealing a few "terms," adding some of my own, and comparing the traits attributed to him/ herself by an employee with the boss's perception.

A self-styled quick thinker may merely "offer plausible excuses for mistakes." Someone with leadership qualities is "tall, has a loud voice. or both." If he has a keen sense of humor, does that signify a "vast repertoire of dirty jokes?" The person that is tactful with superiors "knows when to shut up" and if he shows great promise is probably "related to the boss."

The bookkeeper who is meticulous in attention to detail is a "nitpicker" and if helshe is curious about an item on an expense account is "nosy and insubordinate." The new employee who is conscientious and anxious to please is really just "scared, " and a "brown noser" to boot.

The long-time employee who uses logic on difficult problems actually "finds another to do the job," and if he takes pride in his work, he's really only "conceited."

The new assertive woman on the contractor desk is both "aggressive and pushy" and if she's visionary, she also "daydreams a lot." The self motivating outside salesman who demonstrates such exceptionally good judgement: (l) "Drinks early and often," and(2) is "lucky as hell."

How lt Goes!

CHUCK LINK executive director

llf ng over 80% of the exhibit space lU alreadv reserved. the 1988 Building Products Showcase will again present an outstanding array ofproducts and services. Emphasis will be on new products and innovative merchandising and sales ideas, plus special buying opportunities for attending retailers.

An exciting convention program featuring the theme "Target Your Market" plus enjoyable social activities is planned for Nov. 12-15 in Tacoma, Wa. Convention headquarters will be the Tacoma Sheraton with the Building Products Showcase just steps away at the adjacent Bicentennial Pavilion.

Dealers frequently provide customers assistance by tying materials to a vehicle or furnishing ropes and/or flags. What is the effect o[ such practices on insurance coverage?

If the dealer carries product liability insurance, he has coverage for a loss which may occur once the customer has left the premises with the building materials, rope or flags. Ifthe dealer does not carry product liability insurance and only carries premises liability insurance, he will not have coverage for any loss once the customer has left the premises. The rationale is that the flag and rope furnished by the dealer to the customer is as much a product as the building materials which were purchased. Furthermore, product liability coverage comes into effect when the material is delivered to the customer and leaves the dealer's yard.

When the dealer ties materials to a customer's car, there is a potential for a claim to the customer's car as well as to other persons who may be damaged or injured due to improperly tied materials. If the act of tying the materials occurs on the premises and the customer's car is damaged on the premises by the dealer while tying the materials, the dealer is covered by his premises liability insurance. However, if the material breaks loose while the material purchaser is traveling on a highway and other motorists or persons are damaged by the loose materials, the loss is coyered under the dealer's product liability insurance.

For broadest protection, the dealer should puchase comprehensive general liability insurance which includes coverage for premises and product liability as well as other hazards, according to information furnished by Indiana Lumbermens Mutual Insurance Co.

Use these eight ideas to reduce inventory:

(1) Go through each warehouse and shed and pull all inventory that is damaged, obsolete or has obviously been around since Carter was in the White House. Bring in an auctioneer or hold a well-advertised sale and turn that dead inventory into cash. This action usually converts about 100/o of inventory into cash.

(2) Consolidate duplicate brands or species if possible. Do you really need two lines of paint, roofing and cabinet hardware?

(3) Assign sections of store inventory to each inside salesperson. Make it his or her responsibility to keep it stocked, clean, neat and wellmerchandised.

(4) Eliminate lines you wish you'd never purchased in the first place. Everyone makes mistakes. Just be sure to correct them.

(5) Install a strict procedure for handling special order merchandise and enforce it.

(6) Ifyou haven't done so, begin today a selection process for a good computer system. Good systems are less expensive than ever and usually pay for themselves in inventory reduction alone.

(7) Purchase from stocking distributors products that are slow movers but necessary to inventory.

(8) If you're a non-computerized retailer, color-code price labels to readily determine how long each inventory item has been on the shelf.

No inventory management system will be effective unless management sets specific goals for the company and puts disciplines in place to make the plan come true. Setting and achieving business goals make managing a business more fun and rewarding.