RE: [Epic] GW BOYCOTT (MUST READ IMEADIATELY) (fwd)

From: <duckrvr_at_...>
Date: Thu, 05 Jun 1997 08:45:57 -0500

At 09:23 AM 6/5/97 +1000, you wrote:

>Plus the latest Epic97 thing where in the U.S. stores had to carry the
>ENTIRE range of Epic97 or they got nothing at all. They are also at "war"
>with U.S. distributors as they are trying to cut them out of the market as
>they cut down on GW's profit margin and can give retailers the opportnity to
>sell GW stuff at a discount. In the U.K. and here in Oz, they stock
>directly to the stores and have thus increased their profit margins
>drastically. I hope the U.S. holds out. Apparently things aren't looking
>too rosy over there for GW at the moment.

This is a long-standing tradition between distributors and manufacturers.
The fact is very few stores are of sufficient size to handle bulk purchases
on a variety of products, and very few manufacturers make a wide enough
variety of products that they can provide a store with everything they need.
Hence the need for distributors. Both the stores and the manufacturers
would rather do away with distributors and split the added profit. What you
aren't seeing in the above scenario is that distributors will put pressure
on stores also. Frex, "If you continue to buy directly from the company,
that's going to reduce your volume of business with us, and we will have to
raise your prices." Usually it's couched in much friendlier terms, like,
"if your order is over $xxx, you get x% off." However, distributors will
threaten stores, and more importantly, the manufactureres with loss of
business. "If you continue to undercut us by selling directly to the
consumer, we'll stop carrying your products altogether, and you will lose
visibility and market share."

Not that any of that excuses GW's disregard to customer satisfaction.
Ultimately, if they keep loyal customers, then they will be able to undercut
the distributors, and make more money. If they lose their customer loyalty
by over-pricing, then they will lose the distribution fight.

Temp
Received on Thu Jun 05 1997 - 13:45:57 UTC