DistributorManagement #MSRP #Rebates #PricingStrategy
Hey everyone! 👋
Dealing with distributor management can be tough, especially when one of your biggest distributors decides to undercut the competition online. 😬 Here are some key points to consider and possible solutions:
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Undercutting Issue: Large distributor is pricing lower online, causing frustration among other distributors adhering to MSRP.
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Reasoning: Large distributor lacks tech savvy and feels competing on price is necessary due to high SKU count.
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Rebate Offer: Offering 3% extra rebate for adhering to MSRP, but large distributor prefers to forgo the rebate to have competitive prices online.
- Possible Solution:
- Educate large distributor on benefits of SEM and SEO for online presence.
- Offer training for marketplace management to help them effectively compete without undercutting.
- Explore alternative incentives or discounts for large distributor to maintain competitive edge without disrupting other distributor relationships.
Do you have any experience with similar situations? What solutions have worked for you? Let’s share insights and tips to navigate this challenging distributor management issue! 🤔💡 #Collaboration #BusinessStrategies
Put a clause in their agreement that they will be liable for a fee if they breach (conditions), ratify it with a lawyer.
I run an online shop that does 10M and has distributor and retailers and we sell direct too. The most crucial thing for online sales is to have a clean selling channel with price consistency. Not having it creates all sorts of issues to long to explore but the list is long. You need to manage the online sales with a MAP. Minimum advertised price. For instance say you sell at $99 and that’s the MSRP and MAP. Someone else is at $86 plus $14 to ship it. Google is going to show the lower price next to the higher price and the other will appear to be the better offer, get more views, earn a better page rank and really just mess to your sales channel. In your case, the “biggest distributor” who doesn’t “understand” seo and therefore needs to sell lower than everyone else is full of crap. Your rebate is a waste of your revenue and unnecessary. As one person said, an agreement signed stating pricing will not violate MAP is one tactic another tactic is to use the threat of not doing business with that distributor. You ultimately have the power assuming your products are not easy to obtain elsewhere. Ultimately if one distributor sells low, it’s going to forces the next guy to sell lower bc he’s stuck with your inventory that doesn’t sell bc it’s no longer competitive. Then the next guy realizes he’s not competitive and has to go lower. It’s a “race to the bottom” as they call it.