Baby goods shop shut down by bully boy brands
by Chris Dawson
eBay are featured in the Sunday Times today highlighting restrictive trade practices by manufacturers who restrict how retailers can sell and price their products.
Highlighted is online retailer “Baby Zoop” who have been forced to close their business “due to the illegal price fixing by the major pushchair and car seat suppliers”. They say they were forced out of business with deliveries becoming fewer and further between when they refused to up their prices. Eventually the major pushchair and car seat suppliers made their business unviable.
The Times article cites other retails fighting manufacturers of everything from watches to coffee makers and stereos to flat screen TVs.
The real problem is that as the law stands price fixing is illegal, but if as a retailer your source of stock simply dries up when you lower your prices there’s absolutely nothing you can do.
20 Responses on "Baby goods shop shut down by bully boy brands"
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Would someone explain to me how the race to the bottom on pricing is good for anyone, least of all smaller independant sellers?
Folks wake up, eBay doesn’t care a jot for any of it’s sellers, all it wants is low price product on it’s site, while sellers struggle along on stupid margins assuming their not already close to the bone on that one. Don’t worry, when the penny drops that in real terms you’re making nothing and have to close up eBay won’t lose out, they’ll be another daft mug along to fill your place. Seen it happen year after year.
Amazon can only keep prices so low as all these offers like free P&P for anything are funded from the profits of third party market place sellers.
Some people need to take a step back from this madness and think a bit longer than surviving until next week. I wonder how many sellers there are that have no idea of the true bottom line profit they’re making or not making on a daily, weekly or monthly basis. It’s been said many times before. Turnover is vanity, profit is sanity. Yes it’s an old one but never more true than now, step back and think bigger and longer term.
Kinda reminds me of the line from the excellent John Jantsch on why you should never get into a price-cutting war – “there’s always somebody willing to go out of business quicker than you are”.
Many many years ago (in my 20’s…
), in my 1st ever business, the MD of one of my suppliers said to me;
” THATS THE TROUBLE WITH LOSS LEADERS, YOU SELL TO MANY OF THEM ”
That’s something I’ve always remembered…
More spin from the eBay PR machine?
Sorry, have no sympathy for Baby Zoop. If the manufacturers had warned them to up their prices and they didn’t listen, they only have themselves to blame.
We have one or two suppliers who insist upon a certain retail price for auction sites, and are very happy to obige. More profit for everyone, and if we don’t like it, we don’t have to sell their stuff. Simple.
Price fixing is illegal, it’s an offence. One that many of the big firms have had massive fines for in the past.
I agree that you should price your products fairly but if you choose to sell products and make 1p profit then that is your choice.
If this was me and it was as clear cut as the OP suggest, then I would hand this to our solicitors and let it go it’s course.
I think manufacturers should stop selling to distributors who devalue the product with unsustainable prices for the reasons I’ve given below.
They are not price fixing in this instance at all. They are making their product unavailable to a customer who is not selling the item at a sensible price.
If you tried to take me to court for alledged price fixing I’d pop a cap in your ass.
Is there any evidence of price fixing here? In the article linked to above it is a “claimed”. There are also no “major pushchair and car seat suppliers” named. The former manager also remains anonymous.
If a supplier feels that you are selling product in a way that is damaging to their brand and also damaging to other customers of theirs, is it illegal for them to stop supplying you?
I agree that you should price your products fairly
“Fairly” is very subjective. On my one remaining ID I sell products at 300% markup, seems pretty fair to me
People are blinkered anyway, my new business is the cheapest BAR NONE for what the “product” is and they still don’t want it, and it’s a product virtually everybody wants, even needs.
I used to buy from a manufacturer who sold to all and sundry. Initially, they didn’t want their stuff, being sold on ebay – and for good reason.
Anyway, they began to turn a blind eye to ebay sellers and the price plummented. The margins were riduculous. It meant that if we tried to match the silly competitor prices, we couldn’t give any type of decent customer service – like answering email enquiries about the product – because there was simply no time.
Other distributors like ourselves dropped the manufacturer because of this. The manufacturer was left with those bottom line competitors and is now struggling. Also, those bottom line competitors are becoming increasingly aware that their business model of ‘pile it high sell it cheap’ is not sustainable, and they are going bust.
The moral of this story is there is a reason for stuff being sold at sustainable prices.
Ps, I also believe that ebay couldn’t give two hoots about the small, medium, or even large sellers. They want to keep their diamonds sweet, so they are trying to arouse indignation on this issue amongst all sellers to help their diamond friends (. ietrying to put pressure on the manufacturers to stop them forbidding the diamonds to sell on ebay or for less that a certain price).
Don’t play ebay’s game. They don’t care about you.
You’re just being used to fund the exclusive diamond set up, and when they have enough of them on board, you’ll be squeezed out under the guise of failing to reach impossibly high DSR/TRS/postive feedback scores.
They can’t get rid of you too quickly because they need your listing money to fund the plan. Once they get enough diamonds they’ll start enforcing the rules more vigorosly and you’ll be kicked off – for some pedantic reason – before being able to grab your coat. Make sure you’ve got other selling channels set up.
I’ve see decent sellers with 4.9s across the board with thousands of feedback lose TRS this month. Then I’ve noticed a diamond selling the exact same product into their category. Coincidence? I think not.
Yeah…and we didn’t land on the moon either…
Sorry do you mean Diamond Sellers? I personally think your right Ebay could not care about anyone but making as much money and putting the small sellers out of business!
It’s about time that manufacturers started to try protect the brands that they have spent thousands of pounds building only to see some complete idiot ruin their name by selling stuff for ridiculously low amounts.
eBay is stuffed full of busy fools. You know the ones. They refuse to make a viable profit and seem to want to earn feedback scores rather than earn £££’s
The problem lies in that how can you expect a high street store to spend lots of cash stocking products which can then later be found being slaughtered on eBay. They wont!
A manufacturer or distributor cannot rely on just one sales outlet and so they are forcing eBay sellers to actually make a decent profit margin! How disgusting I hear you say… Yes… A decent profit margin!!
Price fixing may be illegal and being “out of stock” every time a serial discounter wants stock may seem unfair but its unfair to expect the brand name to struggle to get product into high street shops because some idiot on eBay wants to sell a hundred quid item for only a quid profit.
Rant over!
It seems there are two issues here:
1)Should sellers should be pricing there stock so as to make a profit.
2)Should suppliers be able to fix prices by using tactics other than simply saying “sell at this price”
For me the answer is:
1)Yes
2)No (it’s illegal)
The old saying “cake and eat it” comes to mind here.
I think the issue here is that it’s so easy to set up a shop on eBay, undercut all the competition, trash the market, and then disappear 2 years later realising you made no money after VAT and fees etc.
Any idiot can set up an eBay store and undercut the competition. These sellers aren’t the future for the manufacturers, so I don’t blame them for cutting off their supply.
I like a bargain, but I think manufacturers should, and have every right to, stop selling to vendors who deep discount their brand.
And its true: you can’t offer any decent pre sales or after sales service with wafer thin margins, which can effect the whole “buyer experience” and brand image. I know it sounds like an excuse (and cliched) but it’s true.
More often than not when you get a real bargain, any after or pre sales help you may seek is poor or non existent. Think of a well known Irish airline that is frequently castigated in the press.
I’ll seek out a bargain all right, but where quality and/or service is important to me I expect to pay more, and do pay more.
I’m no lawyer, but I think you’ll find that 2) isn’t illegal. The supplier is not saying ’sell at this price’ but is cutting off supplies to the vendor or else making it unavailable to him.
Unless under contract, I think they are within their rights to do this, even if the true reasons is to get the vendor to sell at a price that is realistic and – as someone else said – sustainable.
Buyers can get around that issue by just asking the more expensive sellers. I lost track of how much time I’ve wasted over the years supporting buyers that just go to the cheapest one on eBay instead of me.
Some even have the nerve to ask post sales (not my sale) questions as well.
Ok same thing happens to us, but I think the idea is to rebrand yourself in the marketplaces so noone knows who you are. (unless they check with severe scrutiny)
its not just on line sellers that are doing this, we have a few lines that are sold at the same price in a couple of high street stores as we can get trade direct from the manufacturer. Obviously the qtys purchased are different, and I am not suggesting that we pay the same as the multiple retailer (although it would be nice
– this retailer markets it as XX off RRP …so we dont stock these lines, the manufacturer tried to sell us a new line at £49.99 + vat…in high street on promotion for xmas at £49.99…I might as well join the queue and buy it on the high street.
The manufactuers need to be careful with the larger retailers as well, as they drop prices etc at a whim…and if the manufacturers dont dance they drop them..