EXCLUSIVE:Harvey Norman Move To Central Buying
The move has angered some franchisees but has been welcomed by TV manufacturers.
This week TV manufacturers were told that effective immediately Harvey Norman was set to take control of all TV and home entertainment buying decisions and that all decisions relating to stock levels for the Companies franchisees will be made by Harvey Norman and not the individual stores.
The TV pilot program which if successful could result in the Company adopting the same system for all consumer electronics and IT categories an insider has said.
A senior TV executive for a major manufacturer said “This is great as it delivers us better control of stock. We can also plan better and negotiate deals based on a total volume”.
Another TV executive said “Running a one order book similar to what JB Hi Fi does will make a big difference for TV manufacturers, the new system will allows us to negotiate a deal based on sustainable volume. The past system was piecemeal unworkable and it was a real problem for us dealing with individual stores.
One Harvey Norman franchisee in Queensland said “We know what volume will sell via our stores we also know what models work based on pricing and the demographics of the area we service, I doubt whether head office buyers know what is good for our store as much as we do, but we will give it a go”.
Harvey Norman have not commented on the move.
On the downside one TV manufacturer said that if Harvey Norman does move to a central buying system several vendors and distributors will cut costs by laying off account and product managers who have been employed to service Harvey Norman franchisees.