As noted earlier, clothing vendors have started suing retailers over payments. The heart of the matter is the actual price the customer pays for the merchandise, which then gets divided between the retailer and the maker. So if the customer buys on sale, the maker gets less money. Or if the retailer claims that something was on sale and submits a lower payment, who is to know? Unfortunately, the allure of profit may have overtaken ethics in some cases.

Saks, under two federal investigations and two vendor lawsuits, recently turned over 2-3,000 pages of documentation, which seems designed to obscure their lack of pricing documentation for certain periods, rather than shed light on it (New York Times article). Compounding problems for everyone involved, many of the arrangements are not written down.

I recommend that a pricing system should be able to accurately recreate any past transaction within a certain number of years. This is extremely useful for avoiding and, if necessary, resolving these types of issues efficiently, as well as for doing “what-if?” analysis.

2 Comments

  1. xsapph

    Good grief Rueben,

    I wish I had your financial acumen, I am simply lost on your site, you really are a source of info, if I could understand it, I know I could be rich if I could act on your data, but alack, it is whooooshing over my head!

  2. Reuben Swartz

    This blog does assume some pricing background, but if things are whooshing over your head, perhaps I’m not explaining them well.

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