-By Robert Coviello

The yin is buying groups in our industry are here to stay. Combined with yang, they will create all that is to come to be in independent housewares retailing in the near and long-term future as yin and yang are defined in Chinese cosmology.

The Power of More
The housewares and tabletop industry is far behind many other industries such as hardware, major appliances, restaurant, bath and kitchen, and most of the developed nations in our global economy. European retailers have been operating in various industry buying groups for decades.

If you are not a member of either one of the two existing buying groups in the housewares tabletop industry -- Gourmet Catalog, Inc. or HTI Buying Group, Inc. -- then it is time to research them both and find out which buying group is the right one for your company.

This may come as a surprise, but buying groups do not interfere with or take away your autonomy. Instead, they take advantage of assembling many independent retailers into a collective group of retailers, and leveraging the combined buying power of the buying group to negotiate fixed group discounts with reasonable opening and reorder minimums, extended terms, often freight concessions, and periodically opportunity buys with the participating vendors of the buying group.

Are you ready for this? Well, if you are, you will no longer have to hold orders waiting for a Show Special, a Valentine's Sweetheart-of-a-Deal, a St. Patrick's Day Luck-of-the-Irish opportunity, the Easter Bunny Choo Choo's Less-Than-Carload Rate Price, the Independence Day Blast Buy, the Labor Day Lull Package, or the Witches' Dream Scheme. Why? Because buying group deals last all year -- there are no holidays, no vacations and, most importantly, no buying windows. It is a simplified way of running your business, which is guaranteed to add profits to your bottom line. It means no asking every vendor every time you place an order if there are any special offers, discounts, dating or freight allowances. Do you really have time to negotiate a deal on every order you place throughout the year? How many orders do you place in a year? One hundred, 200, 300, 400, 500 or more? How many orders do you place with the same vendor several times a year and must ask the same questions every time? Is it really a good use of your valuable time when your buying group is able to do all this for you for pennies per order, and you only have to load the deal into your POS system once a year and often times not for several years as the program remains in place for longer periods of time?

Buying groups know the key players in the vendor community. They have the contacts with the vendor's sales mangers, product mangers and channel managers. They often have close ties to the president and vice president of the sales and marketing teams. They are shown new products/product ideas early. Buying groups are treated like a big box customer and you, the independent retailer, reap the benefits of these relationships.

Buying groups are attending shows nationally and internationally, not something most independent retailers can afford to do. The benefit to you, the retail member, is what they pick up early in trends, new introductions to the marketplace, and knowledge of the economic well-being of the industry.

They often meet and chat with your industry peers either individually or through committees made up of your peers, which gives them insight and knowledge on trends early on which they are able to share with you, effectively saving you time and money.

All these collective benefits -- some direct, some indirect -- relieve you of this burden and allow you the time to focus on what is the most important part of your company, running it efficiently. This gives you more time to spend on customer sales, company personnel development, inventory management and the financial well-being of the company.

Incidentally, the participating vendor members in buying groups read like the who's who of Park Avenue. They also include a host of new companies coming on to the scene every year.

The Reality of Loyalty
Retail members of the buying group develop a loyalty to the buying group's participating vendors. This means in all probability the bulk of retail members' open-to-buy dollars are spent with the participating member vendors. By the way, if you are a vendor reading this article and do not belong to one of the two buying groups, or if you are clever, to both of the buying groups, you may want to read the first sentence a second time and note the word loyalty. That is a powerful word. Most vendors must do business with department stores, branded specialty chains and big boxes. However, lest we forget, most vendors get there by starting with the independent specialty retailers and end up staying there because of what the specialty retailers do to develop the business and educate the consumer. Plus, they have one more ingredient to add to the mix: they can deliver on customer service and talk intelligently about your products. The big guys can only talk about customer service in the media, and product knowledge is not abundantly available on the sales floor. Did I say that?

The greatest thing about all of this is as a specialty independent retailer, you continue to do business with your buying group vendors as you always have through the vendor's local sales representative, company representative or directly with the vendor if that is what you previously were doing.

So Mr. and Ms. Independent Retailer, why do you resist joining? Why are you taking so long to join? How is it you do not know about buying groups?

I am going to make a calculated guess; based on my years in the industry, there are no more than 1,200 real specialty housewares retailers in the U.S.A. I define a real company as one that is making a profit. This is an activity most independent retailers do well as, for them, it is a matter of survival. Real entrepreneurs have a natural ability to survive. I suspect less than one-third of all of these specialty housewares retailers are retail members of a buying group. To coin an expression, my friends, that is a business miscalculation.

Now some of my readers will say, "Bob, you're prejudiced when it comes to buying groups." Well, yes and no. I am not as prejudiced as you may think. Actually, I am writing this article in the best interest of our industry. The best example I can give to everyone is myself. When I opened my first retail store, I was so green behind the ears, it was mind-boggling. Not only did I not know anything about retail, but I knew even less about housewares and tabletop. I was researching for resources and advice, which proved to be scarier than becoming an entrepreneur, simply because there were none. Nowhere to go, no reference books to read, no college courses to take. The only people to learn from were the people who wanted to sell something to me. It seemed to me at the time the opportunity was not equitable with my goals for unbiased knowledge.

Bottom line: Where were the buying groups when I needed them? They were nowhere to be found. But, they are here now. Do your due diligence and get involved with one soon. It is a business decision you will never regret. The bottom line of your company will look better as a result of becoming a retail member of a buying group.

Robert F. Coviello is the founder and president of HTI Buying Group, an organization of independent houseware specialty store retailers and industry vendors. He is also president of Housewares Tabletop International, a consulting firm that provides innovative solutions to strategic challenges facing companies in today's dynamic housewares and tabletop industries. Bob has more than 35 years of experience in the industry and is an acknowledged industry expert in the housewares field. If you would like to comment or send him your feedback, please send e-mail to htibuying@verizon.net.