Accessory Geeks puts its contracts into review
February 24, 2012 09:55 AM
E-retailers should keep a close eye on market conditions and make reviewing contracts a regular part of doing business. Doing so, says Karen Kang, vice president at specialty e-retailer AccessoryGeeks.com, can help e-retailers save money on operational costs—money e-retailers can then invest in the business elsewhere.
Kang will explain how she selects which contracts to renegotiate, how she prepares for negotiations and share examples of the savings Accessory Geeks has realized during the Internet Retailer Conference & Exhibition June 5-8, 2012, in Chicago, in a session titled “The idea exchange: Swapping tips on doing more with less.”
“Because of market conditions and the competition that exists for your business, there is always room for negotiations,” Kang says. “Just because you are in a contract doesn’t mean you have to stay there.”
Kang says each January she looks at how much Accessory Geeks, which sells cell phone and electronics accessories, paid out in operational expenses to vendors of all kinds during the prior year, and then hones in on the most costly areas and on contracts that are coming up for renewal soon. She checks how Accessory Geeks’ expenses compare to current rates to see how much cost savings might be realized if the contract is renegotiated. For example, two years ago Kang reviewed the rents for commercial spaces comparable to Accessory Geeks’ headquarters in City of Industry, CA. After collecting the going rates for several spaces within a one-mile radius, she called up the e-retailer’s landlord and renegotiated its current contract, lowering the rent by about $2,000 per month. Last year, she got Accessory Geeks’ credit card processor to lower its fee by 10 cents per transaction.
Kang will stress the importance of coming prepared to the negotiation table. “The current rate might not be the competitive rate you negotiated two or three years ago,” she says. “You have to know current conditions and know what you want so you can have good negotiations with the vendor.”
Internet Retailer’s editors asked Kang to speak because she has a track record of improving efficiencies and cutting costs in all departments at AccessoryGeeks.com, which she joined in 2004. Her efforts within each department have helped improve the performance of the company as a whole, and the e-retailer is No. 698 in Internet Retailer’s Second 500 Guide.