| A wave of discounting at the national level is | | | | we decided to sell down our inventory over time |
| forcing purchasing departments to cut costs on | | | | and give the benefit of deeper discounts to our |
| basic glass packaging. As consumers cut back on | | | | existing - and loyal - customers. |
| affordable luxuries, coffee roasters like Starbucks | | | | Every day we encounter bidding opportunities for |
| are even looking at entry level products to sell to | | | | large quantities of glass containers. Since we have |
| consumers such as "instant" coffee and tea | | | | become a national distributor for Libby Glass, |
| mixes. Box store discounters are weathering the | | | | we've found that companies that buy into the |
| economic crisis by continuing a pattern of mark | | | | concept of American made glass jars are willing |
| downs for unemployed and low income folks. As | | | | to pay a premium for the quality, integrity and |
| such, most glass fillers are now offering some | | | | consistency of Libby Glass. But what exactly is a |
| type of low priced glass container. To do this, | | | | premium? 25%, 50%, 100%? What more are |
| they have sought the help of lower cost Chinese | | | | they really willing to pay? |
| manufacturers. | | | | When we come up against competitors, we hear |
| The funny thing about sourcing in China is that if | | | | the same mantra every time: "we want the Libby |
| you lack the resources, skills, relationships and | | | | Glass, but we need the jars for nothing." Big |
| wherewithal to prevent quality problems and | | | | candle makers and gourmet packers are dropping |
| delays in delivery, buying in the Mainland is a fool's | | | | their pricing and using cost advantages to capture |
| game. Every buyer seems to have unrealistic | | | | a larger share of the market at the expense of |
| expectations on pricing, not least minimum orders. | | | | smaller producers. To combat this and help our |
| That forces even the savviest and well positioned | | | | clients compete, we drop our pricing and give |
| importer to stock up on glass container | | | | them insider's knowledge on the trends in shapes |
| inventories that are unsalable. As the market falls, | | | | and styles that will force them to buy American if |
| the idea of moving more glass jars is problematic | | | | the buyer's focus is differentiation. |
| - to whom and how quickly? | | | | Although we lose some projects by not |
| We recently tried to liquidate a large percentage | | | | outsourcing glass jars overseas, we find that |
| of our remaining China inventory. No matter how | | | | eventually we'll win business, at our price, when |
| low our pricing, we couldn't get any retailers to | | | | the Chinese fail. The beauty of working in China |
| commit! Even the largest distributors of closeout | | | | for the last 15 years is that we know that we'll |
| inventories such as Big Lots and Christmas Tree | | | | win more than 50% of the business, if not initially, |
| Shops are overloaded with closeouts that they | | | | then immediately when their overseas supply |
| couldn't sell. I found that getting anyone to | | | | chain defaults. It usually takes at least a year for |
| purchase in bulk is extremely difficult; offer prices | | | | customers to drop their sourcing programs. When |
| are so low that recapturing 25 or 30% of your | | | | they do, we step in and fill their orders - and |
| cost would be considered a good deal. As a result, | | | | name our price. |