Supplier also my Competitor??

[Jessies Little Angels]

Hi all!

I need some advice please, I have recently found out that two of my suppliers are also my competitors.

I run a baby store and I found out that two of my suppliers not only supplier people like me with stock but also have their own websites under different names selling the same products.

Is this normal or am I going loopy?

Thanks

Jessica :redface::redface:

 

[patientlady]

I would have thought this is fairly widespread. I presume you receive a wholesale price tho?

 

[Jessies Little Angels]

I would have thought this is fairly widespread. I presume you receive a wholesale price tho?

I did think it maybe a little bit more popular than I thought!,

yes I do get wholesale price - just thought its a bit weird that they compete against their customers.

 

[FM1000]

I did think it maybe a little bit more popular than I thought!,

yes I do get wholesale price - just thought its a bit weird that they compete against their customers.

If they can make more money selling direct then they will. It's quite normal practice

 

[chalkie99]

Fairly widespread in the sign trade too, unfortunately.

We try and place our custom elsewhere but not always possible.

It has become more frequent during the recession as they try every avenue to keep afloat.

 

[Jessies Little Angels]

I can see that.

Just thought I would check it out an I'm glad to know that I am NOT going loopy - yet lol

 

[mit74]

Had the same problem with a local supplier of computers . Problem was they started supplying the product to consumers far cheaper than any of the wholesalers could. Stop using them in the end so was really dumb move on their part.

 

[alexft]

MIT74 why dumb maybe they are next Dell

I know business called something like sexshop 365 they sell direct and they wholesale, works fine probably also becouse they sell at same prices as their customers.

Nowdays many biz models are changing big time

 

[gemd89]

The biggest fancy dress shop in UK is also wholesaler! (same umbrella company different website)

Gemma

 

[Jessies Little Angels]

The biggest fancy dress shop in UK is also wholesaler! (same umbrella company different website)

Gemma

Thats exactly what my suppliers are doing, running two businesses under the same umbrella.

Thing I have found is that they also want to know the gossip about my business, how well I am doing etc (not that I tell them anything anyway) I almost feel that I cant trust them and I feel that is wrong as I want to trust them as my supplier, one even tries to push slow moving stock onto me lol!

 

[Rhyl Lightworks]

Some suppliers do this in all industries, and others do not - they are only interested in selling to retailers. You have to decide whether you can compete with them taking into account two things:
1. Your bigger orders should mean you are getting large discounts on their prices selling one off items to the public
2. Your orders should not incur carriage charges, which they will charge to the public for one off items either as a separate charge or built into the price.

If you are still selling their items after taking these things into account, either in a physical shop or online, there is no problem. If you are not, drop them like a hot brick, and find a similar supplier who does not compete with you.

Barrie

 

[patientlady]

Thats exactly what my suppliers are doing, running two businesses under the same umbrella.

Thing I have found is that they also want to know the gossip about my business, how well I am doing etc (not that I tell them anything anyway) I almost feel that I cant trust them and I feel that is wrong as I want to trust them as my supplier, one even tries to push slow moving stock onto me lol!

We purchase from one of the largest wholesalers in the country. They are a main competitor. We buy as little as possible but use them! They offer a great delivery service so use them where others cannot supply. We source elsewhere whereever possible. Sometimes it can be useful to be in touch with your competitors. It keeps them at bay to some extent.

 

[office man]

Is there no one else that has a 'trade only' policy that you can source from?

Ultimately this could really damage your business.

Manufacturers and particularly wholesalers should decide whether they want to supply direct or go through the dealer route NOT BOTH - I'd do everything to sever relations asap (if you can)

Good luck

 

[deniser]

You need to decide whether or not to stock the products.

We won't stock anything that our supplier sells cheaper than us and we get an undertaking from them not to reduce the price of anything we sell during the season.

Most suppliers will actually sell to the public at a higher price than the RRP to keep their business customers happy.

With the boot on the other foot, we supply shops as well with one product that we wholesale but we retail it as well. All our retailers have chosen to sell it for the same price as us but some offer free postage or other offers making theirs a little cheaper. We won't compete with them; we don't mind who sells it.

 

[ADW]

We used to supply direct with certain products and were approached several times to wholesale to other companies..... which we did.

As long as they don't undercut you I don't think it is a big problem.

 

[JDX_John]

This is entirely normal. You should be adding value.

 

[Astaroth]

Thing I have found is that they also want to know the gossip about my business, how well I am doing etc (not that I tell them anything anyway) I almost feel that I cant trust them

As others have said, it is common practice in many areas for an organisation to be both a wholesaler and direct retailer. In most cases their wholesale customers feel that they can add value above and beyond price and so the model can work.

An organisation that does this should have chinese walls in place to stop there being a conflict of interests and give their business customers confidence. It can always be worth asking them what their internal processes/ policies are that enforce them.

 

[sphynx]

Some suppliers do this in all industries, and others do not - they are only interested in selling to retailers. You have to decide whether you can compete with them taking into account two things:
1. Your bigger orders should mean you are getting large discounts on their prices selling one off items to the public
2. Your orders should not incur carriage charges, which they will charge to the public for one off items either as a separate charge or built into the price.

If you are still selling their items after taking these things into account, either in a physical shop or online, there is no problem. If you are not, drop them like a hot brick, and find a similar supplier who does not compete with you.

Barrie

It's totally normal unfortunately but this is good advice

 

[SillyJokes]

Yes, this is a real problem for independent retailers. The wholesalers are turning retail left right and centre. They usually try to hide this from their retail customers so they obviously realise it is going to be an unpopular move.

 

[Jessies Little Angels]

Thank you for all your advice, it is greatly appreciated and all taken on board!

 

[Jessies Little Angels]

I have just been having a right old nose through their retail website and found that they are selling goods at a much cheaper price than what I actually pay them grrrrr!

 

[gemd89]

Not good then jessie! Better look for another supplier..

Gemma

 

[CSBob]

Or take it up with your supplier first, at least. You are justifiably annoyed and can use this to write a very angry (but focused) letter. Aim for a substantial reduction in their price to you.

Failing that, find another supplier - preferably one with no retail outlet of its own.

 

[gemd89]

www.obabytrade.co.uk
http://www.dhgate.com/wholesale/fisher+price.html
http://www.podee.com/wholesale2.html
http://www.upspringbaby.com/index.php?main_page=retailer_info
http://www.doopsy.com/become-a-retailer.html
http://www.mominnovations.com/
http://www.aristofashion.com/babinikuki/?p=7
http://www.drion.co.uk/baby-diapers.html
http://www.regotrading.com/
http://www.tinytodds.com/
http://www.haptic.co.uk/taggies/products.php
http://www.kskids.com

Try these

 

[h4nym]

I have just been having a right old nose through their retail website and found that they are selling goods at a much cheaper price than what I actually pay them grrrrr!

Which does beg a few questions:

1. Can you not buy off their website?
2. Can you not nick some of their ideas for your own website?
3. Do they cover the entire range that you do? If so, what value are you adding for your higher pricing? If not, then do the suppliers that you get your other stuff from cover these folks range too?

Don't get mad... get even! See what you can do to play them at their own game - compete harder with them! And it's extremely unlikely that price is the best battleground for that!

We're in a similar postion - one of our suppliers - for whom we are the only customer(!) wants to start offering the same services as we do. I explained that we would not only welcome them but actually help them if they launched overseas rather than in our back yard. They declined, but haven't yet given up hope.

The reason? It's the only gig they know - and ours is the only gig in town! Think of it from that perspective!

 

[cjd]

I was going to say that so long as they're selling at their RRP it's a nuisance and a worry but not terminal, but if they're selling below their wholesale price to you that's a deal breaker.

As a minimum you need a better deal; but I'd now be looking for alternative suppliers.