Home > Uncategorized > The Issue Never Dies: Suppliers Who Sell Direct to Consumers

The Issue Never Dies: Suppliers Who Sell Direct to Consumers

A month ago I wrote a background paper for some larger stores which came out of a meeting where I got to hear the concerns that “the big boys” are dealing with. The issue on the table was Canadian suppliers who sell direct to churches and individual consumers.

Americans may not “get” this issue, since there are so many parallel channels already vending the same products in the U.S., but here in Canada, retailer expectations are for more protected markets. Here are a few edited excerpts from my analysis…

It seems to me that there are two issues here.  The first is:

  • Brick and mortar stores are being hammered by online competition. While some of this was/is inevitable, having that competition coming from someone who is also a supplier is creating a strained working relationship.

The second issue however, will not be as apparent to people who are employed by said suppliers, you have to make the connection for them:

  • You can’t be asking stores to respect an exclusive Canadian distribution arrangement while at the same time undermining the position those stores occupy in the retail chain.

Having thus stated the issue, the problem is that our Canadian distributors represent a wide range of suppliers, which leaves each of us dealing with a variety of their people on different fronts:

  1. Books and Bibles
  2. Music and Movies
  3. Curriculum
  4. Cards and giftware

…which means that with every single contact with every single staff member, the issues above need to be raised until they see this as something they need to deal with.  That means, for those…in a larger store environment, each person on staff interacting with each person at the distributor’s head office has to raise this issue with each phone or email contact, emphasizing:

  • “Selling around” the stores is just as significant an ethical issue as stores “buying around” their suppliers
  • This is a central issue, not a peripheral issue
  • The supplier needs to acknowledge that this is an issue for retailers
  • The supplier needs to agree that the situation is untenable at present
  • The stores need to know what is being worked out on this, what steps are being taken, when we can expect to see some response

And then, without idle threats or using the “b-word” (boycott), they need to know that the enthusiasm of the larger stores for making significant purchases or cooperating with new programs, new product lines, new marketing initiatives or new product launches will be tempered by the seriousness of this issue.

That’s how I believe the major stores should respond to this crisis.

To follow: How Canadian retailers can offset aggressive direct-to-consumer marketing by major suppliers.

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  1. June 25, 2012 at 9:57 am

    Yep. It’s a hot issue here in the UK too…

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