I never felt that my blogging was prolific but certainly up to December 2010 I posted regularly. So at a point my thoughts and reports had attracted more readers than I had hoped for. Although the use of Google analytics to track how many people view my messages and thoughts does sound a liittle vain. So after December you will note no posts. People have approached me so often lately asking what has happened. Well to be short nothing and that is the point nothing has changed.

The trade has become even more fragmented, bias towards clothing and apparel with the daily loss of traditional shoe stores. Agents and representatives who understand the real trade retire or leave the trade quicker than they can be replaced. Protectionism and pricing cartels prevail. The day of the company ran by sales people and the rule of promise and honour are gone. Instead the company accountant runs the show.

The sales force complain that they can no longer deliver to half the accounts they have. The accountant wonders why sales are tumbling and nobody pays him quicker even though he feels that it is not unreasonable to ask for everyone to adhere to the new stricter terms he put in place. Very similar to the government wondering why tax revenue has fallen even though over all tax payments should be rising. The accountant based company simply snuffs out the life of its account base.

I will expand my point here. In the good times literally everything was good. Very much like a prize fighter on the way up; every time a difficult opponent jumped in the ring a good combination saw them off. So it was with trade you took a few knocks but you kept on rising up the ranks. Ultimately you could fight above your weight and the momentum of the economy kept you going. If you ordered too much, no problem, you could sell it. Buy a duff colour, you could clear it and you had time to clear it. Make a call and your supplier would say "hey no problem do your best I know you guys we are in this together”.

Can you see where I am going? In the good days a strong economy covered your errors, suppliers worked with you and everyone rose up the ranks. Buoyant trade and happy days gave you ample supply or even over supply. Credit terms were easy and deliveries were early. It sounds like the shoe trade was easy and for the shoe professional it was. So what has changed ? Well, of course, we are in a recession. More to the point a recession driven by a collapse in confidence brought on by a credit crash. Pretty much I think everyone was guilty of over doing it when it came to credit.

The big change came when it was decided that the game had stopped. The trade cycle dropped to the bottom for many reasons but was marked by the day that a guy from accounts who had previously seen taking a risk as deciding to visit the loo at work instead of at home said “ooh can we allow that account to take credit from us?”. The guy who everyone made fun of became the boss. The face of distribution became Richard from accounts not Julie from sales.

What has happened ultimately brings on a recession anyway and it is straight forward. I will refer to our company now so that I can draw a real example. We pay quicker for fewer shoes that must earn more per unit as sales dwindle. GP must rise as purchases fall but ultimately only if sales remain static. Surprisingly this has worked for us but it will and has brought on an even quicker cycle of decline. We are buying fewer shoes and maintaining sales so we are then allowing the supplier to or making the supplier shed staff and production.

When a supplier turns against us we have no choice but to be aggressive back. In short we work harder to stand still people face redundancy in wholesale distribution and we have a recession on our hands. Now Richard in accounts knows no better when he points out that the trade terms for the company are strictly thirty days. He points out that they have been so for the last thirty years. Nobody thought to stop that first little edge forward that then began the big step backwards. So where is the trade now?

Pretty much the big wake up call was when, as a boss of an SME, you woke up and found yourself alone. Very alone. The banks will not be able to help (think yourself lucky if you keep the facility that you had); some suppliers will help and when they do grab them and hold onto them ( I will return to that in a minute); and other suppliers driven by a desire to control both distribution and retail will attempt to establish pricing and distribution cartels.

I have had a few physical threats when I have resisted the moves by a cartel, but the demands for everyone to tow the line continue. Sad as it is but most brands are so desperate to protect their own retail that they will try to blow out the candle of every other retail enterprise that is not part of them.

The attempts by a brand or company to control the free market must ultimately expose the truth behind the business plan that they are following. Thing is that once they have pushed away the independent sector they miss the flexibility that the little guy can give. Ultimately sales fall and so more and more own retail outlets and channels are opened. Very soon the biggest competition for the small trader becomes the supplier who dictates price, behaviour and purchase pattern.

Look for independent suppliers. Look at how Clarks ruined many a good family store. Ultimately, the brand that goes down the own retail route will end up working against the retail sector they serve. They will open up next door to you and they will try to close you down.

I stress that there are still many good suppliers out there. They know who they are, pretty much the bad ones have just got worse. Bob was the worst account manager in footwear before the recession. Nothing new there. Brands that offered poor margin before the game changed did so for a reason. They ultimately wished to flood the market with products that were been under sold. The only way forward for them was going to be to introduce their own retail channel that was and remains their strategy.

That's fine just help people to wake up before they open another store in a town that they feel they are not represented well enough in. If there is a gap in distribution find out why the indi in town does not stock you. Gordon at Van Dal has offered a solution to this and I will report on the progress of the Florida Group experiment as it unfolds. The Florida Group model is built on partnership, not many can say that.

I may have posed a lot more questions than I have answered here but more comment and direct reference to the bad guys are to come. My first post for six months is over.

Now may I take the time to thank some guys.

My mum died on Good Friday. She worked for my dad, then for me and Gary for 19 years. She will be missed and not only by the customers who ask after her every day. Thanks to Steve, Neil, Rob and Sue, and Helen for coming on the day of the funeral and wake. Thanks to everyone who sent cards and best wishes.