Internet retailers ruining my business - what can be done?
Discussion
We have about 600 nice independent furniture retailers up and down the country. It's took about 20 years to get them all set up, and business is booming.
Most of these retailers have websites and 20% or so have prices online too. However, 2 or 3 of these retailers have now chosen to sell online a lot cheaper than the average UK price. (They also have bricks and mortar shops.)
All of the other retailers are complaining that they're loosing orders to these 2 or 3 internet websites.
It is very annoying, and it seems we are powerless to LEGALLY do anything about it.
Potentially, these cheap internet shops could kill the whole of our business, as a lot of the nice retailers are now threatening to stop selling our furniture as they keep having to price match these cheap online shops. The margins are so small that it's hardly worth selling the furniture at the matched price.
Am I right in thinking that in the USA, a manufacturer is allowed to set a minimum retail price? Not so in the UK.
What can we do??
Most of these retailers have websites and 20% or so have prices online too. However, 2 or 3 of these retailers have now chosen to sell online a lot cheaper than the average UK price. (They also have bricks and mortar shops.)
All of the other retailers are complaining that they're loosing orders to these 2 or 3 internet websites.
It is very annoying, and it seems we are powerless to LEGALLY do anything about it.
Potentially, these cheap internet shops could kill the whole of our business, as a lot of the nice retailers are now threatening to stop selling our furniture as they keep having to price match these cheap online shops. The margins are so small that it's hardly worth selling the furniture at the matched price.
Am I right in thinking that in the USA, a manufacturer is allowed to set a minimum retail price? Not so in the UK.
What can we do??
There is not a lot you can do I'm afraid...they could sell stuff at Cost price plus a pound if they wanted to, as loss leaders.
Of course you could threaten to withhold supplies, but I suspect legally you would be on dodgy ground.
Are you selling your goods to them cheaper than the other shops, because they buy in large quantities from you?
You could always try a "polite" word with them...good luck with that...
It's called free enterprise. The days of retail price maintenance went in the 1960's.
Do they pay their bills on time?
https://www.gov.uk/government/publications/resale-...
Of course you could threaten to withhold supplies, but I suspect legally you would be on dodgy ground.
Are you selling your goods to them cheaper than the other shops, because they buy in large quantities from you?
You could always try a "polite" word with them...good luck with that...
It's called free enterprise. The days of retail price maintenance went in the 1960's.
Do they pay their bills on time?
https://www.gov.uk/government/publications/resale-...
Vixpy1 said:
Strip one of them of their right to sell your products, the other 2 business's will soon get the message.
This. And, crucially, sort out an online strategy yourself. - this new-fangled internet thing will come to us all eventually.
Either sell the product through your own website, where you control the selling price, or go into league with your own choice of (different) retailer where you can control the price with them.
You can also change your retailer selling agreement to stipulate that the product can't be sold online by them, if you have the power with the retailers.
Like Vixpy says. Take Dawes Cycles. They will not supply either non bricks and mortar shops, nor any shop who discounts current year stock by more than 10% - even though their customers have to buy up front no sale or return.
Many other cycle brands have similar protective strategies in a growing and competitive marketplace. If I were to go into cycle retail (I'm not!) I would certainly choose these level-playing-field brands.
So you can positively use such protection of your resellers to attract more decent ones.
Many other cycle brands have similar protective strategies in a growing and competitive marketplace. If I were to go into cycle retail (I'm not!) I would certainly choose these level-playing-field brands.
So you can positively use such protection of your resellers to attract more decent ones.
Edited by richardxjr on Friday 27th January 17:35
richardxjr said:
Like Vixpy says. Take Dawes Cycles. They will not supply either non bricks and mortar shops, nor any shop who discounts current year stock by more than 10% - even though their customers have to buy up front no sale or return.
Many other cycle brands have similar protective strategies in a growing and competitive marketplace.
Sounds like RPM (resale price maintenance) which is illegal. This might be a discreet/informal agreement with the IBSs in question though. I doubt Dawes would publicly admit to this.Many other cycle brands have similar protective strategies in a growing and competitive marketplace.
I'll dig out their dealer Conditions of Sale and Dealer Agreement and see what comes to light. It's a plc so will be legit and may help the OP
ETA Nothing about retail prices, but there are options to not supply with regard to credit limits and things like 'reserves the right to withdraw permission to use all DC property including images, trademarks or other branding if the use of them is deemed by DC to be brand damaging".
ETA Nothing about retail prices, but there are options to not supply with regard to credit limits and things like 'reserves the right to withdraw permission to use all DC property including images, trademarks or other branding if the use of them is deemed by DC to be brand damaging".
Edited by richardxjr on Friday 27th January 18:06
Don't simply punish the guys who are selling online, with the right tools (from you) they can take your business to the next level and if done correctly others will follow...
If these sellers were selling your product at a higher price online, would you support them? Are they representing your brand well? Are the products displayed well? Do they also make a good effort in store?
Personally I have a very hard opinion. The internet is not going anywhere and it will only happen again, so you need to design a pricing structure so both BAM and Online can work together.
If these sellers were selling your product at a higher price online, would you support them? Are they representing your brand well? Are the products displayed well? Do they also make a good effort in store?
Personally I have a very hard opinion. The internet is not going anywhere and it will only happen again, so you need to design a pricing structure so both BAM and Online can work together.
nickfrog said:
richardxjr said:
Like Vixpy says. Take Dawes Cycles. They will not supply either non bricks and mortar shops, nor any shop who discounts current year stock by more than 10% - even though their customers have to buy up front no sale or return.
Many other cycle brands have similar protective strategies in a growing and competitive marketplace.
Sounds like RPM (resale price maintenance) which is illegal. This might be a discreet/informal agreement with the IBSs in question though. I doubt Dawes would publicly admit to this.Many other cycle brands have similar protective strategies in a growing and competitive marketplace.
The same goes for all the other comments on here. It's illegal to "up their prices" or "hold up their deliveries".
As long as they've been paying their bills on time, the manufacturer is legally bound to continue supply.
I was hoping there might be a loophole or way around it that I'd missed, but it seems not. We are totally powerless in the UK/EU to do anything to stop one or two rouge traders screwing up our business.
There have been previous case law situations in the furniture trade when a manufacture did mess up deliveries and lose orders.....the retailer in question sued the manufacturer who was told to pay well over £100k in "loss of earnings" to the retailer. I think, since that particular ruling, the industry has been dead scared to try to do anything about it.
One thing I did think of.....
Put everyones price up 15% "due to Brexit."
Give 598 customers a 15% discount off list price.
Would that also be illegal? I would think that if the 2 bad accounts found out, they could sue us.
They probably would find out as it's still a close nit gentlemanly industry.
Put everyones price up 15% "due to Brexit."
Give 598 customers a 15% discount off list price.
Would that also be illegal? I would think that if the 2 bad accounts found out, they could sue us.
They probably would find out as it's still a close nit gentlemanly industry.
Let's say currently standard trade is 50% off RRP.
Some people are selling at 25% off, pissing in soup for everyone.
What you could do is issue new price lists. Where standard trade is only 20% off. Then reward your good customers with further discounts to make their overall margin as it was before. Obviously no further discounts for the discounters.
The original discounters will have to raise prices or give up, your other good customers will be on good margins again. Happy days. RRP stays same.
Some people are selling at 25% off, pissing in soup for everyone.
What you could do is issue new price lists. Where standard trade is only 20% off. Then reward your good customers with further discounts to make their overall margin as it was before. Obviously no further discounts for the discounters.
The original discounters will have to raise prices or give up, your other good customers will be on good margins again. Happy days. RRP stays same.
I have been involved with this issue before, very tricky.
However I was one of the online retailers doing the discounts! I had a supplier threaten to shut me down and I went to town on the anti-competition / retail price maintenance angle and they had to back off very quickly... phone calls, emails etc are all evidence! The Office of Fair Trading are much more responsive than any other government dept I have ever come across, they are incredibly helpful so do not put yourself up against them I suggest!
You could go the other way and say to the online guys increase your prices and I will give you more of a margin? But ultimately you have no legal ground at all to tell people how to price your product and you cannot stop supplying them, that is the law.
However I was one of the online retailers doing the discounts! I had a supplier threaten to shut me down and I went to town on the anti-competition / retail price maintenance angle and they had to back off very quickly... phone calls, emails etc are all evidence! The Office of Fair Trading are much more responsive than any other government dept I have ever come across, they are incredibly helpful so do not put yourself up against them I suggest!
You could go the other way and say to the online guys increase your prices and I will give you more of a margin? But ultimately you have no legal ground at all to tell people how to price your product and you cannot stop supplying them, that is the law.
Oceanic said:
I have been involved with this issue before, very tricky.
However I was one of the online retailers doing the discounts! I had a supplier threaten to shut me down and I went to town on the anti-competition / retail price maintenance angle and they had to back off very quickly... phone calls, emails etc are all evidence! The Office of Fair Trading are much more responsive than any other government dept I have ever come across, they are incredibly helpful so do not put yourself up against them I suggest!
You could go the other way and say to the online guys increase your prices and I will give you more of a margin? But ultimately you have no legal ground at all to tell people how to price your product and you cannot stop supplying them, that is the law.
ReallY??However I was one of the online retailers doing the discounts! I had a supplier threaten to shut me down and I went to town on the anti-competition / retail price maintenance angle and they had to back off very quickly... phone calls, emails etc are all evidence! The Office of Fair Trading are much more responsive than any other government dept I have ever come across, they are incredibly helpful so do not put yourself up against them I suggest!
You could go the other way and say to the online guys increase your prices and I will give you more of a margin? But ultimately you have no legal ground at all to tell people how to price your product and you cannot stop supplying them, that is the law.
I don't know, and I'm not trolling, but what do you base that statement on? If I take a phone call or email request for product, I don't HAVE to fulfil that request if I don't want to, as long as my refusal isn't on sexual or racial discrimination grounds, and in B2B that would be really tough to prove.
mondeoman said:
Oceanic said:
I have been involved with this issue before, very tricky.
However I was one of the online retailers doing the discounts! I had a supplier threaten to shut me down and I went to town on the anti-competition / retail price maintenance angle and they had to back off very quickly... phone calls, emails etc are all evidence! The Office of Fair Trading are much more responsive than any other government dept I have ever come across, they are incredibly helpful so do not put yourself up against them I suggest!
You could go the other way and say to the online guys increase your prices and I will give you more of a margin? But ultimately you have no legal ground at all to tell people how to price your product and you cannot stop supplying them, that is the law.
ReallY??However I was one of the online retailers doing the discounts! I had a supplier threaten to shut me down and I went to town on the anti-competition / retail price maintenance angle and they had to back off very quickly... phone calls, emails etc are all evidence! The Office of Fair Trading are much more responsive than any other government dept I have ever come across, they are incredibly helpful so do not put yourself up against them I suggest!
You could go the other way and say to the online guys increase your prices and I will give you more of a margin? But ultimately you have no legal ground at all to tell people how to price your product and you cannot stop supplying them, that is the law.
I don't know, and I'm not trolling, but what do you base that statement on? If I take a phone call or email request for product, I don't HAVE to fulfil that request if I don't want to, as long as my refusal isn't on sexual or racial discrimination grounds, and in B2B that would be really tough to prove.
I would suggest a "polite" word/request......they can only say no.
Yipper said:
You cannot stop the future.
The UK high street is dying on its ass.
Stop delaying the inevitable.
Get ahead of the game.
Join the 21st century and tell all 100% of your resellers to get online and onphone and get competing asap.
Not possible when the product only sells when it's physically sat upon and touched first. You won't sell a fitted chair if it's not fitted to the customer first. Cannot be bought exclusively online. The UK high street is dying on its ass.
Stop delaying the inevitable.
Get ahead of the game.
Join the 21st century and tell all 100% of your resellers to get online and onphone and get competing asap.
Customers are spending an hour or two with a trained salesman in a nice warm shop and then going online to buy cheaper than the nice warm shop's owner can afford to sell it. It's not a fair and level playing field.
If everyone goes online then customers have nowhere to see and touch the product, so there wouldn't be any sales.
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