Are You Partners or Competitors?
Together with a couple of friends, I had a retail clothing store for a few years. This was a side thing for me as I was already working here for a couple of years. It was interesting and valuable learning about being a dealer for clothing and skateboard companies. Having worked with manufacturing clients on their dealer support programs, I now got to be on the receiving end and experience these types of programs first hand.
Unsurprisingly, the brands that provided the best support were the brands that we were most loyal to. We got some wonderful displays, piles of stickers, and everything we needed to display their products very well. Not everything was free, nor did it have to be. We were happy to buy display racks that looked a lot nicer than most widely available retail displays, for less money. Everything was great.
That is to say, except for 1 specific brand. It was a Manitoban company, and I was surprised at the reach we got selling online and getting orders from New York, Maine, and a number of other states that have a proper winter. This brand did a great job in building a name for themselves, however it became abundantly clear that supporting dealers wasn’t their top priority.
A customer came into the store and picked up two of their products. One higher priced and one priced somewhat lower. “These are free,” she said holding up the lower priced product “if I buy these right?” indicating to the higher priced ones.
“No… we don’t have any sales like that going on” I replied to her.
She then informed me that she saw on the companies Instagram that this was a promotion they were running. I don’t blame her for not understanding that the company was running this independently. However we weren’t too thrilled with the manufacturer for undercutting us as dealers. That’s a deal we couldn’t possibly give. Based on our margins, we’d have enough left over after that sale to get a couple cups of coffee. Not much more than that. Oh, and they launched this for the holiday season. The busiest time of year in retail.
We got in touch with our rep and they didn’t have much to say. It was clearly a decision made to move product, in this case at the expense of the dealers. We estimated that this manufacturer promotion cost us about 10% of our sales during the holiday season. The brand had performed extremely well for us the previous holiday season, and this was only our second year with them.
If you’re going to build a dealer network, you are responsible to nurture, train, support, and most importantly, not undercut them. If a companies dealers feel betrayed, they will move to a competitor as fast as they possibly can.
If you’re not sure how you’re doing in your dealers eyes, we would love to help you find out. Call us today to see how we can help.