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Independent Behaving Like Big Box
July 6, 2008

As independent retailers, we expect to be undercut on some merchandise by big box stores and big box e-tailers.  What we might not see coming, though, is another independent pushing a strictly specialty product at big box volume and pricing.  This practice takes sales from one independent and gives them to another who has done nothing other than slash margins to ridiculous lows.  Where do we as independents draw the line?  Does every specialty manufacturer need to implement and enforce a strict pricing policy to protect the other independents across the country?

I find it absurd that I am competing with someone for a sales to customers in my own city.  (As if having almost a dozen other stores in the area isn't competition enough.)  The other store in question is hundreds of miles away.  Would this retailer appreciate me soliciting sales from their local customer base on products that they stock and sell?  It's one thing if we're talking a difference of small significance but this is hardly the case.  This is a large item and there is a large price difference.

You know that I do not use names so I would appreciate it if no one posts comments calling out other stores on this behavior.  With that said, what do you do when a fellow independent crosses the line?  Should I contact the manufacturer and discuss the implementation of minimum retail pricing?  I don't really see any other way around it.  Even if I price match this ridiculous price, and I do, it makes us look like price-gouging meanies to have our retail price so much higher.  (For the record we are not price-gouging meanies and do our best to maintain fair and reasonable margins.)  Perception is huge in this industry and we hardly want to be perceived as over-priced.

Should I approach the retailer about the pricing?  I have been told that this will likely make no difference as this store is doing very well with this particular product at the cut-rate price.  If an independent is behaving like a big box retailer, do they still deserve the title "specialty store?"  It seems that any store more focused on quantity than quality is of a big box mind-set and is hardly special.  Can you have a specialty store if you eliminate the "special" element?  Perhaps we should call them a "-ty store" since there is no more "special."

That's my rant.  I've said my piece.  My next conversation in regards to this will be with the manufacturer.  Where do you stand on specialty product pricing and drastic price-cutting? 

Posted by Kelly Nelson on July 6, 2008 | Comments (0)