If there's one topic that both buyers and sellers of jewelry have mixed feelings about, it's memoing. Although routinely used in just about every sector of the business, it is often done with some level of misgiving and consequently is practiced with a great deal of caution.

Nearly everyone who was consulted for this article -- manufacturers, retailers and those involved in both of those roles -- addressed both sides of the issue.

Without being prodded, everyone readily conceded that they could see that memoing, although something to avoid if at all possible, is of benefit to all parties under the right circumstances.

Curiously enough, most everyone had a different and slightly vague working definition of the term but none seemed confident enough to declare that theirs was the "official" one. It turns out that they were all stating pretty much the same thing, that doing business on a memo basis means that a manufacturer is providing goods for the retailer to sell for a specific, usually relatively brief, period of time with the manufacturer getting paid only when the goods were sold. Part of the uncertainty came when the term "consignment," which is closely related to memo, was introduced.

It's meaning is the same as that of memo but it implies a longer, and sometimes indefinite, length of time. The two are used interchangeably, and as Karen Good, principal of Michael Good Designs in Camden, Maine, points out, consignment is a term that is used more frequently in the crafts and art world, and memo is the term more often favored in the jewelry business.

Another anomaly was that neither the jewelry makers nor the store owners had any problem with using memo when it came to acquiring diamonds and larger colored stones. Apparently, the biggest reservations that bedevil the memo system -- that of paying for sold goods in a timely fashion and returning the remainder just as promptly -- are less of a problem with these items.

Scott Cusson, owner of Brinsmaid's, an independent in New Canaan, Connecticut was typical in this regard. "We definitely call stones in on memo," he explained, "but for jewelry we try to minimize it as much as possible." He cites two reasons for his hesitation with jewelry on memo. "Clerically, it's awkward," he says, "and from a merchandising standpoint, you wind up with a lot of stuff you might not have chosen yourself and might not be as committed to."

His latter comment highlights one of the sore points between the makers and the sellers, that of commitment. Both sides expressed a feeling that memoed goods might be treated, as one put it, as second class citizens, although all the retailers said they were careful not to consciously do this.

Still, the manufacturers said they had enough experiences to convince them that human nature sometimes relegated their memoed goods to second place or worse. "We have had situations where we would call to see if our stuff was selling," relates Judy Robilotti, of Paul Robilotti Designs in Kingston, New York, "and the response was that they would check their vault to see if the goods were still there. That told us plenty."

Now, she continues, "we work with the people who support us as opposed to throwing it into a store just to test it out." Essentially, she said, "we use memo to round out a purchase."
And that, judging from the comments offered by all parties, seems to be the situation in which memoing works best. "It's better to sell outright and then supplement with memo," says Robert Bruce Bielka of Bielka, Inc., a designer company based in New York City. "Early on, when we were untried, it was a good way of opening the door," he continued.
But now, he said, he would think long and hard, and do extra research, before committing his work to a store that didn't buy from him first. Most retailers would agree with his position. Marc Aronstam, owner of two stores in Indianapolis, Indiana, says that he accepts memoed goods most often when he has some of the designer's work already in the store.

Even so, Aronstam says he gets offers from "a lot" of designers who say they would like to be in his store and offer him memoed goods. "If that's something they'd like to try, and we'd like to try, then we'll inventory it," he says. "That way, no one gets hurt." Cusson, who has tried that approach, reports that he has had "some very delightful surprises and some disappointments."

He recommends that a retailer give the jewelry "at least a month to see if it strikes a nerve. A week or two is not enough." Most everyone agreed, adding that a cutoff date is also something that is just as important in setting up the memo agreement.

What happens after that is as varied as the situation. Cusson, in a step that brings delight to the ears of manufacturers, says "if it sells, I buy it." Others prefer a mixture of purchase and memo. Still others may want to continue the memo arrangement indefinitely.

Steven Kretchmer of Steven Kretchmer Designs of Palenville, New York, says "each situation is dealt with separately," adding that "a lot depends on the relationship." Typical of the ambiguity that many manufacturers face on this topic, he says his company doesn't do much memoing at all, only a percentage or two of his business compared to half of Bielka's, but he will provide goods under certain circumstances. "Our clients usually know to ask us only when it is to close a deal," he explains.

Michael Good Designs, which also has a policy of keeping the amount of memoed goods to a maximum of just a few percentage points, has stringent conditions in which it will acquiesce to a memo request. "If someone is having a special show or asks for a big, elaborate piece, then we might do memo," says Karen Good.

Another situation that qualifies, she reports, is "if someone is opening a new store and I know them, I might help them get started by memoing the first order. But I have to know them real well."

Even companies that have a general policy of not doing memo will sometimes accommodate special situations. Phyllis Bergman, president of Mercury Ring Corporation based in Englewood, New Jersey, one of the nation's largest bridal jewelry manufacturers, says "basically, we don't do memo."

But she adds that she will do so if a customer has someone lined up for a sale or when she has close-outs. "I have no need to send out memo because I have salesmen out on the road selling, and we get very few returns," she says.

A few places have a no-memo policy and stick to it. Barrier's, a jewelry store in Wichita, Kansas, which Jay Barrier, a principal, described as "maybe the quintessential independent," is one. "We don't do memo," he says, "only on loose diamonds, occasionally." Celebrating its 70th year in business, Barrier's has always had this policy, he said. "We don't overextend ourselves," Barrier offers by way of explanation.

For retailers, overextending themselves can be a real problem that could be aggravated by having too many memoed goods, warn some retailers. If the memoed goods sell far better than what has been purchased outright, the retailer finds himself with bought inventory that is not making any money, and a good chunk of what money is coming in is going right back out to pay for the memoed goods.
"You come into January and you've sold your open to buy," says Jerry Cronier, president of Cronier's Fine Jewelry, the largest jewelry store in Montgomery, Alabama. " You have to be so careful with it," adds the veteran retailer with 33 years experience. He advises everyone to "stay within your budget" and is generally in favor of memo programs ­ under the right conditions

. "For the average store at startup, memo programs are terrific," he says. "If you don't have any money, that's what the memo program is about. If you have the money, you buy."

Maybe the most insight can be had from those who are on both sides of the issue. Susan Helmich, president of Susan Helmich Designs of Monument, Colorado is in the position of having to say yes or no to both retailers wanting her work in their stores and designers wanting their work in her gallery.

"It's been challenging," she begins. "As a retailer, my agenda has been that if I carry other designers, I buy them. I do as much as I can but it's tough." She related how other designers volunteered to send goods on memo when they heard she was opening a gallery several years ago. After much thought, she wound up accepting only a few of the offers.

"It was quite a compliment," she says, " but I've never asked for it." Like every retailer, she had to be very choosy about which ones to take. "It really, really upsets me if I don't sell it, and I don't have the resources to carry things that I know are not going to sell well.

On the other hand, her experience as a wholesaler has led her to a policy of readily dealing on a memo basis if the customer has bought from her in the recent past. "I don't hesitate then," she says."

Michael Good Designs is another example of a retailer that is also a manufacturer and how that influences memo policies. Almost always, Karen Good says, the company buys the jewelry it sells in its showroom, and on the occasion when it doesn't, she pays the designer "as soon as I sell something." It stems from the attitude that you treat your suppliers the way you want to be treated, or as she so succinctly put it: "We don't do what we don't want done to us."<