The Rules Have Not Changed: Minimum Orders

Back in 2010, we did a post on Minimum Orders, why are there minimums and how to handle them. It came up again on OD’s on Facebook and apparently was a HOT TOPIC of discussion.  Before I go on, I will preface this with: I am adamantly for minimums orders and adamantly against frame returns.

While there are many answers to why there are minimum orders, I will say the #1 reason for minimums is the Product Sells Through. Having product sell through benefits the eyecare retailer, the wholesaler and the consumer. Product sell through makes money for retailers and wholesalers, keeps costs lower for consumers. It is a win-win.

Every time, this subject comes up, I think of Acuvue and Chanel. When Acuvue first came out, there were minimums. I had so many docs tell me no company was going to dictate to them how much they had it carry. What happened? Online contact lens companies picked up the slack, happy to carry the product and supply the consumer. Chanel- the initial buy-in was 40 units. Again docs said, that is stupid and they were not going to put in 40 pieces. I know one doc, who is still waiting to get on the list to sell Chanel. I know of several eyewear brands, who wanted to do minimums, there was so much resistance, they just went direct to the consumer. Which is a HUGE trend. Lots of new eyewear lines selling directly to the consumer because the eyecare retailer will not make a commitment to the line.

There were several comments that I just had to respond to:

One person says, ‘I don’t think any line is worth a minimum order’. The beauty of our business, is that there are so many choices and products to pick from that do not require minimums. Lucky them. But on the other side of the coin, when a consumer asks for a product and you can’t get it, because you don’t believe it minimums, that is a business decision you made.Don’t get mad at the rep or the company. That decision has nothing to do with the rep. The company’s business decision was to require a minimum. It is your choice to do business or not do business.

Another person said ‘If in 10 months we will no longer be able to purchase a frame we will not be able to warranty a frame we sell with a 1 year manufacturers warranty. That is not acceptable when their pitch is “we warranty our frames for 1 year.’ Minimums have nothing to do with this. This could happen without a minimum or not. The way the companies change brands, who can ever guarantee a product anymore?

Another person said ‘ The Rep should help get rid of the line‘ : I am not quite sure if they were talking the rep should take it back. In reality, a good rep will help you sell through all products, not just theirs. Through merchandising, product training, trunk shows and more, a great rep will coach, train and provide tips on sell through of all products. I have always believed in BUY AS IF YOU CAN’T RETURN. Saves time and money.

Another person said something to the extent ‘minimums go up and down’ . OK, so what? If I was a frame vendor and had a hot product and couldn’t supply the product, I would limit it too. You have to… it is better to have 10 happy customers you can supply, than 100 unhappy customers.

Another person said, ‘we don’t have that much space’ and if we did all minimum orders, we would only be working with a few reps/companies.’ Again, I say so what? There is no business model out there that says you have to carry 20-30 lines . There is nothing wrong in going deep into an eyewear collection. If you don’t think that is true, think about all the brands (eyewear and otherwise) who have opened up their own store. Do you think the Fendi store is carrying Kate Spade? Do you think you will find Prada in the Armani store? Will you find Brighton in Old Navy? Will you even find Old Navy in The Gap? It is called Brand Building.

Honestly, if you listen to your customers, what are they saying? What products do they ask for? What products are you actually selling? Are you tracking this information?

Bottom line: With good inventory management and frame tracking (See The Edge), minimum orders will become less of an issue. Making a commitment to a collection or a brand should build a better vendor partnership and stronger sell through.

 

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Comments

  1. Hi,

    A few observations from a former frame rep.. There is a difference between “opening order minimums” and the expectation by a brand that a practice keep that same amount on the board at all times. Opening order quantities are usually set to give a brand a realistic representation to the patient, which is completely understandable. With a few exceptions most brand opening order minimums are between 12 and 24 units, and do not have continuing requirements(even designer brands).

    When it comes to luxury and some designer brands the practice has to understand who their patient base is and the image of their practice. Did one patient ask for Fendi or was is it 20? Are they interested in the “brand” or the the style and quality of the frame? There are lots of choices from lots of frame companies. The “Image” as well as the patient base must be considered when contemplating frame brands. Brands come and go, the duration of a brand being on the top of the bell curve is not a science and can be very unpredictable…it’s fashion. Be cautious when adding these brands to your assortment, be committed(willing to take in 40 pieces or more), understand what your getting into…return policies, exchanges, annual volume commitments, and the willingness of a company and the company representative to support and work with the practice to make the brand successful.
    IF YOU DON”T DON’T THINK YOU CAN WORK WITH THE REP OR THE REQUIREMENTS YOU REALLY NEED TO CONSIDER HOW BADLY YOU NEED THIS BRAND.

    Returns can be kept to a minimum IF: The rep is working with the practice, is making regular visits (exchanging styles that are not selling for styles that are), and “babysitting” the brand to make sure it is working in the practice. BUT IT IS A PARTNERSHIP, or it should be, and Dispensary Staff also has responsibility for making the brand work…stay in contact with the rep, reorder frames sold off the board and exchange out a few that are not selling. Keep the brand fresh, display and show the product for maximum impact, contact patients who specifically asked about the brand, have a trunk show…..POST IT ON YOUR WEB AND FACEBOOK PAGES.

    New practices are a different situation entirely. It is especially difficult because they have no history and are dependent on many unknowns…and it takes time. Topic for another discussion,

  2. Good advice and well said!