Budgets of Handicraft Buyers
Budgets of Handicraft Buyers
Importers make buying decisions in different ways. In Bhutan a group of people meets together in a small committee to look at the many samples we have received. Such meetings are organised at certain times of the year, according to the times we need to plan our new product ranges. The people who attend are not only the buyers, but also those responsible for marketing policy and managing our sales outlets. This method of buying by committee is common. Importers like it because it enables them to compare the offers from all actual and potential suppliers together at the same time. Buyers for large importing businesses are suspicious of making decisions at the point of contact with a supplier. They prefer to see what else is being offered from other countries.
Your chance of receiving an order depends absolutely on having your sample on the buying table when the decisions are made. Importers generally place orders on the basis of samples, rather than photographs, or memory. However, smaller importing businesses may work differently. In the case of a small craft boutique, the owner/buyer will go on a visit overseas, and make buying decisions on the spot. The risk is not large if the quantities ordered are small. Even then, the buyer will probably not be visiting every producer country, and will still need to receive samples from other suppliers, for the purpose of buying after returning home.
The typical export sales procedure of moving from contact to sample to order is a lengthy one. It is often a source of great frustration to exporters that buyers seem to take a long time in making up their minds. It is not that they are indecisive. Rather, it is that they have to plan their product ranges very carefully.
Consider the whole procedure of Norling Lam buying for its shops. Each year we set a buying budget, which is calculated according to our sales targets, with an adjustment for stock movement. Financial plans have to start from a sales forecast. So, for example, we might wish to sell 10 lakhs worth of handicrafts in the coming year. However, we have a rather high stock both in our warehouse and our shops, and would like to reduce this by 1.5 Lakh.
A small handicraft business should not expect to receive a quick response in the export market. A great deal of patience is required. You should never assume that an order is likely because samples have been requested. One workshop in Kenya produced a large quantity of stock of items sampled to us, in the hope of receiving a positive response. Not only were we unable to place an order, but also the majority of the stock was stolen, resulting in a great loss for the workshop. Nor is it realistic to expect to receive a clear explanation of why products were not selected by buyers. Even in Phuntsho Handicraft, where we have a particular interest in keeping our suppliers informed, it is impossible to write back detailed comments on more than 3,000 samples which arrive at our office each year but are not selected. We try to monitor incoming samples each week. Buyers take forward to the four-monthly meetings only products of possible interest, rather than everything which arrives.
Because of the large number of samples which arrive, we have little motivation to remind suppliers who have not sent samples that we want to see some. There is never a shortage of other things to choose from. A number of small handicraft businesses are not good at keeping customers in touch with new products, or even at introducing new products. No importer can continue buying the same product range every year. The consumers demand change. Customers who come into Norling Lam shops expect to see a regular supply of new products, otherwise they get bored and go to other shops.
Importers make their buying decisions with regard to their sales pattern during the course of the year. Most businesses are seasonal to some extent. Those market segments of handicrafts which can be categorized as gifts - which is a good number of them - are particularly seasonal. Norling Lam achieves two-thirds of its sales in the last onethird of the calendar year, between September and December. This is because consumers buy most gifts at Christmas. Other products are seasonal because of climatic considerations. woollen jumpers will sell only in winter, sandals only in summer. Importers do not want to hold stocks for long periods of time. They cost money by taking up warehouse or shop space and working capital. Hence, importers buy with delivery dates very much in mind, and expect exporters to respect them. These may or may not coincide with favourable times for production. A supplier of lacquer boxes in Thailand was unable to fulfil an order from Norling Lam Trading within our requested time because we placed it at the time of the rainy season, when the lacquer would not dry.
Comments