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T.J.Maxx: Dresses to Kill for the Downturn
Oct 21, 2008

Businessweek talks about  T.J.Maxx and how  they do what they do, is clearly providing them differentiation in this tough economy. Read Article  Relationships with those you serve most often focus on external clients  (vendors)  and internal clients ( associates).  What is providing T.J. Maxx with their advantage is the relationship they maintain with their vendors in serving them. There is a service relationship  between client and supplier that is two way. T.J.Maxx does this well.

One of the more contentious areas of the  buyer/seller relationship is payment terms.  In the consumer products industry this area of terms of sale is one that is wrought with conflict, problems, complaints and adversity. T.J.Maxx in dealing with their suppliers has taken this  potentially stressful transaction component and turned that into competitive advantage.  They never battle with suppliers over credit terms, they pay their vendors promptly ( typically 30 days) and do not negotiate over "bigger deals" if items do not sell.

This works to their advantage in normal times , but in with  difficult economic turbulence, they enhance their marketplace position even further.  Many suppliers are facing order reductions and cancellations as delivery times draw near and retailer business results are off.  These order adjustment force vendors to off load their excess inventories.  They immediately look to T.J. Maxx and because of  their excellent payment relationship, provide them with the very latest in fashion lines at a very  attractive prices. So while higher priced retailers have limited or no inventory, T.J.Maxx has more that adequate inventory at very favorable prices.

Supplier/Retailer service relationships work best when they are reciprocal.  T.J. Maxx does this really well and in so doing differentiate themselves from their competition.

 


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