To expect that my retailers stick to the prices I set on my own bloody products?(16 Posts)
I tell you what, I'm sitting here looking incredulous!!!!!!!
In a nutshell, I supply the beauty industry with jewellery to stock and retail at their premises, at absolutely no cost to them. In return, they earn a commission on each item they've sold.
My products are branded, and I also run my own website and do party-plan so my prices must remain consistent at all times.
I went in to do a stock rotation with a salon today to find they've been putting the prices of my stock up to whatever suits them so they can make extra money on it!!!!!!
May I add at this conjecture that they have signed an agreement stating that all the goods within the cabinet and the cabinet itself remain the sole property of my company until it is sold on to an individual, and that any prices set by us have to be adhered to.
What would you do?
[I must email you]
I would go ballistic is what I would do. But then I am a hot head!
What did you do/say?
I told them (very nicely) that they can't make up their own prices as I have a brand-name to think of, and also they've signed a letter to the effect that they aren't to change prices without my express permission.
Anyway, one of them got up and walked out in a huff!!!!!!!!!!!!!!!!!!!!!
I'm not a lawyer, but I believe such an agreement is not binding, not enforceable in law, and if it includes a minimum price as well, it may be close to a criminal offence.
As I said not a lawyer, but I have done economics, and I rather think they are doing you a favour. It's stupidly hard to work out the price that maximises profit. They are showing you that the market will bear a higher price.
Most retailers are actually paranoid the other way, that the suppliers website will undercut them because of course you can, especially in a high margin business like jewellery.
Price consistency doesn't strike me as a good goal, let alone one you can achieve.
Dominicor, I think we're talking at cross purposes here.
I do not supply them with the jewellery, they just showcase my products and make a commission on it, therefore I set the price. As the products are sold under my company name, with my company invoices etc.
I am not a wholesaler, they sell the products at the price I myself sell them at on my website and by party-plan. They simply get a commission on that price and I receive monies less their commission.
And it isn't a favour, as the jewellery is a huge draw for their customers. They're given exclusive rights in their demographic area to use my brand-name and sell the items, and they are the sole retailers of the jewellery in their demographic location.
If I have different prices on my website, at party-plan and within beauty salons, I could in theory be in breach of trading standards.
Not sure if that was too confusing. Basically they act as party-plan agents. Much in the same as an avon or Virgin vie representative would. The companies set the prices, and the agents sell at those prices and take a commission on it. The rest goes back to the company.
I understand what DC is talking about - it's what Hasbro got into trouble for a few years ago. More info here
I don't know whether that applies it applies to your situation because the Hasbro thing was about selling cheaper rather than more expeinsve:
"These agreements prevented the distributors from selling Hasbro toys and games below Hasbro's list price without permission. Such agreements infringe Chapter I of the Competition Act 1998, which came into force in March 2000."
OTOH, as a consumer it ticks me off when I am told that it is not worth shopping around because prices wll never be cheaper or reduced elsehwere e.g. TP Toys used to be like that but I don't buy them any more so I don't know if it's still the same. Ditto Crocs would not allow retailers to sell shoes below their set price (not that I owuld ever buy crocs)
The point is they're just agents. Like a virgin vie or avon agent would get told off for selling stuff cheaper or marking it up more expensive than the catalogue price, because it isn't fair on the other agents.
Also, I'm not a manufacturer or their supplier. They are acting as self-employed agents selling the products on behalf of the company, not as a retailer. Perhaps I should have chosen my words more carefully.
If your agreement is watertight then you could just pull out - or threaten to - as they have breached the contract, I guess. Get some legal advice though!!!
Also could you afford to upset them? Are there other outlets you would want your product to go into in the area? Would pulling out give you a bad name within the area (local business people's organisations, etc?)
There's some info here on businesslink which says:
Competition law prohibits almost any attempt to fix prices - for example, you cannot:
* impose minimum prices on different distributors such as shops
Again it's about minimums rather than maximums though.
The wording states:
The cabinet will be provided by and remain the property of the xxxxxxxxx Co, and must be returned should the agreement be cancelled.
All items are to be sold at the xxxxxxxxxxxx Cos stated price. Discounts may not be given unless expressly advised by the xxxxxxxxxxxxxx Co. The jewellery can not be marked up at a higher price than dictated by the xxxxxxxxxxxxxx Co.
We retain the right to hold periodic sales at our discretion. You will be expected to mark the jewellery down to the specified costs provided by us.
No, I do not wish to pull out. I'm just amazed that although they're acting as agents - they saw fit to mess with the retail price of my products, putting them totally out of sync with all the other agents I use, and also totally out of sync with my website!!!
It is a popular request for jewellery cabinets to be placed within salons, so if indeed, it did not work out with them, there would be plenty more lining up to take their place as there is no cost involved for the salon.
Great info BTW SueW, but it does look like it's geared more towards distributors rather than agent selling.
Thanks to all those who put their views across and gave advice.
Just for reference, the price fixing regulations do not apply to my company in the same way as it would a large conglomerate. It's really in lieu of the anti-competition laws.
As I don't supply trade, and I am taking agents to sell the jewellery, at no cost to themselves, I have a duty of care to protect the consumer rights of my customers. Therefore; I can't have one agent setting much higher prices than their customers could otherwise buy my stock for at a lower price elsewhere. This is why they are given the stock already priced up, and earn a commission on each item they sell.
I've checked their website, and am working to the office of fair trading standards.
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