UK retail pricing question!

[Deleted member 2816]

I market a product online that I have been importing from the US for 2 years. Previously, there had never been any discussion on my UK retail price for it, and at the start I was the only UK outlet for it.

I have now - out of the blue - been emailed by the suppliers to inform me of "the minimum suggested retail price" for this product in the UK, and have been told to "adjust my price accordingly"! :shock:

Now, I have never marketed it at such a high price, and wonder why they are telling me to do this. Possibly because other UK suppliers have complained that I sell it more cheaply than they??

The question is - can they legally make me market this product at a specific minimum price here in the UK even though no agreement was ever made about pricing? (Another aspect of this is that they sell the item wholesale at different prices depending on the amount bought, so different customers will have paid different prices for it.) What can they do about it if I refuse to increase my retail price?

Please advise!

:?:

 

[gary]

This isn't unusual - I read in the paper yesterday that Stella Artois was rasing it's prices because it thought supermarkets were selling it too cheap and therefore devaluing it (or that was the impression I got anyway). Just as well I'm a John Smith's man!

I'm not sure a supplier can dictate to you at what price you sell their products without an agreement in place, but if you don't they can quite easily say they won't supply you anymore, and I'm not sure there's much you can do about that.

Gary

 

[Deleted member 2816]

Thank you for that opinion, Gary.

After this incident, which has p*ssed me off big time, I doubt whether I would reorder from them anyway! :?

My pricing is not 50% less or anything like that, just a couple of pounds!!

Any more views?

 

[Alpha]

I think Garry has got it generally correct especailly on goods imported from abroad.

If it was from a UK supplier you may be able to argue through the courts regarding restrictions on trade but in many of these cases I think the supplier has won. (Selling levis jeans in supermarkets is one example that comes to mind).

The simple answer is ignore them and decide that you want to risk the possibility that they will no longer supply you or increase your prices(and profit) but have a personal moral dilemma.

Really it depends on whether the product is a substantial part of your business(either directly or indirectly because people who order this then order other products).

Personally I would not appreciate doing business with suppliers who tell me what I should or should not do....now advise would be slightly different.

 

[gj]

I agrtee with Alan that you need to look at the impact this product has on your business.

My initial reaction from a profitability point of view is that if there is a genuine market at or above the minimum suggested price, and which is only a few pounds different to your current price, increase it to that. You will lose little business from it but will gain £2 per unit pure profit. In fact you could afford to lose some business and still make the same overall profit.

I wouldn't be afraid to raise the prices if you believe others are selling at that price. If you were the sole distributor, you already have a lead on the other UK suppliers, so would your clients go elsewhere, if they call only get it at the same price of higher elsewhere.

My suggestion would be to regard this more as the supplier giving you an indication of a more realistic selling price, rather than as a command.

Taken in that light, you could make more money, keep your supplier and keep the customers happy who are used to buying that product from you albeit at a slightly higher price.


Regards

Graham

 

[Deleted member 2816]

My suggestion would be to regard this more as the supplier giving you an indication of a more realistic selling price, rather than as a command.

Graham

I would hardly call....
"The minimum suggested retail price for xxxxx in the UK is xxxx (British Pounds). Please adjust your pricing accordingly."

...a suggestion! That was the sole content of the email!! :? Not even a hello.

It sounds very abrupt to me, and I am not a person who likes to be told what to do!! Especially as I have been marketing it for a year & a half for less than their 'minimum suggested retail price' without a word from them! :evil:

 

[Deleted member 2816]

I've just learned today that the exchange rate is $2 to the £....I wonder if this has anything to do with it.....we might be able to sell it cheaper than them soon...hehe!

 

[kyber]

Unless they and this product are absolutely critical to you, I would say "no" to them. They can not force you to sell for a particular price. It is up to you how much profit/loss you want to live with and how, as long as it does not bring their brand into disrepute etc., you sell their products. They can make a recommendation but that is all it is.

They may choose to try to stop selling to you. You may be able to challenge this in court.

Possible there is also the option of the "grey" market to acquire the goods from.

Have fun.

Stuart

 

[Deleted member 2816]

Thank you for all your replies, Stuart, Alan, Gary & Graham.

It has put my mind at rest. Input appreciated. I shall simply carry on as before & ignore the email...

 

[SillyJokes]

If you have been selling it for two years it is surely not unreasonable to increase the price a little.

Is the product widely available- have you price checked your competitors?

Are you confident you priced it up correctly in the first place? Would you do it differently if you priced it again now?

Isn't price just as much about what people are prepared to pay as your desired mark up?

I agree that email sounded rather huffy, but don't forget those poor americans have just got to face up to the fact they are stuck with George Bush for another four years and get on with their lives.

 

[gj]

As Sillyjokes says aend I tried to suggest, it may be that you could charge more anyway.

Is there are good reason why you do not want to sell it at a higher price, other than the fact you do not want to be told what to do?

Otherwise, it sounds like you are potentially doing yourself out of additional profit, just to spite the supplier!

I could understand more if your decision was to find an alternative supplier.

Your choice, but I wonder if emotion over the tone of the email is getting the better of commercial common sense.

Graham