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Editor's Note

When Wholesalers Sell Direct Online, They Better Be Ready for the Consequences

With wholesalers selling direct to consumers online, what does the future hold for brick-and-mortar retailers?

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Ever had that feeling that everyone was muttering about you behind your back? If so, you might be a jewelry manufacturer selling to consumers online.

Over the past few years, this has been the No. 1 topic we’ve heard about from our readers. Just a quick look at our last couple of Brain Squad surveys shows the following comments: 

  • “Sad that so many wholesalers are selling direct to our customers, brands included.”
  • “More and more, we are seeing the major brands opening their own stores and selling directly to the public or through third parties that are discounting their merchandise.”
  • “I am concerned about the future of the retail jeweler. I see less walk-in traffic each year and I feel like it is due to the Internet.”

The Internet has made it much easier for wholesalers to sell direct. The motivation is not hard to understand. A wholesaler can double profits by bypassing retailers to skip straight to the consumer. But at what long-term cost?

When a wholesaler makes an end run around the retailer, the retailer no longer trusts that wholesaler. So that wholesaler better make darn sure he is ready to take on all the functions of a retailer (merchandising, marketing, and selling to the public). And compared to trying to garner attention in a crowded online marketplace, a brick-and-mortar retailer’s built-in local audience, recognition and community presence start to look really attractive.

It’s a conundrum that’s shaking the very structure of the jewelry industry. To read more from both wholesalers and retailers — including some suggestions and possible solutions — see our lead story on page 43.

 

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FIVE SMART TIPS YOU’LL FIND INSIDE THIS EDITION

1. If a client consistently has problems with rings turning her fingers black, suggest she have the inside of the bands coated with rhodium. (Ask Instore, p. 69)

2. Tell clients, “Please save me from buying this for myself” to show your enthusiasm for new products. (Line Time, p. 65)

3. Instead of a one-day trunk show, have designers come in for a week and call it a “residency.” (Brainstorm, p. 64)

4. Tell your own engagement story on your About Us page with humor and sentiment. (That’s Cool, p. 68)

5. Go through your jewelers’ bench and findings cabinet and melt or return findings that are more than one year old. (Manager’s To-Do List, p. 28)

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This article originally appeared in the April 2018 edition of INSTORE.

Trace Shelton is the editor-in-chief of INSTORE magazine. He can be reached at trace@smartworkmedia.com.

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