Company won't supply us

smyth1979

Hi all,
I work for an independent gift retailer and we wanted to start stocking a particular company's goods. They are a popular company and have said that they are not opening any more accounts in the area. I believe that there is still a high enough demand for us to give over space to the range due to the amount of times our customers ask us to stock it. So I was wondering, is there a legal obligation on the company to force them to supply us? Any thoughts and experiences would be appreciated.
Smyth:o

forbairt

My thoughts would be .. if they don't want to open an account they don't have to. If you can justify why they should open an account with projections and figures maybe they would be more interested.

I wouldn't see there being any legal requirement for them to do business with you either. Stores reserve the right to refuse business to customers (potential customers) so I'd see this as being the same thing. They may also not want to saturate the area with their product from different suppliers as they have have a deal done with other stores in the area.

seamus

Probably nothing you can do.

Look at the iPhone - Apple have decided that only O2 can sell it here in Ireland, and it's been ruled OK.

Competition rules really only kick in if a company produces a product which nobody else does, and only supplies it only to a single retailer for sale.
If there are alternative products on the market (as is the case with cars and phones), then the manufacturer has the right to choose who can and can't sell their goods.

thecola

smyth1979 wrote: »

So I was wondering, is there a legal obligation on the company to force them to supply us? Any thoughts and experiences would be appreciated.

There are some countries that would have such legal systems. Not that they are very well understood among free economy. Viva la Cuba, maybe Venezuela, Zimbabwe... they all might request companies to do something...

I think that your popular supplier is managing it's posibilities to highest possible revenue, as well as to maintain their maybe somewhat exclusiver image among customers. dunno.

seamus

thecola wrote: »

There are some countries that would have such legal systems. Not that they are very well understood among free economy. Viva la Cuba, maybe Venezuela, Zimbabwe... they all might request companies to do something...

That's not entirely fair. There are perfectly legitimate reasons why a company may be "forced" to sell a product to more than one retailer.

For example, imagine I invented a diet pill that caused the user to lose 1kg of fat per week, while eating whatever they wanted.
Then I agreed with Boots that they would be only suppliers. I would sell it to Boots at €2/packet and they would sell it at €20/packet.

Within a couple of months, you could be guaranteed that all but the hardiest and remotest of chemists would be crippled or out of business, while Boots would record massive profits.

thecola

seamus wrote: »

That's not entirely fair. There are perfectly legitimate reasons why a company may be "forced" to sell a product to more than one retailer.

Correct me if I'm wrong, but here isnt case of only one retailer, and product does not classify under breaktrhu in medicine. So we are in a pretty good environment.
And about the pill... I imagine you invent the fatpill. What are chances that all pharmacies take it from you. so in order to get a deal you sign an exclusive to Boots contract. And they realize that this is a catch, and they boost their sales, while you get 2E/piece, and cannot do anything about it, because you are not Boots. I dont think there is any legitimate reasons for someone to intervene in anyone's decision to supply or not to, unless its the only regional food, water and medicine provider for a remote place, who get evilishly abandoned by its suppliers.

ChinaImports

smyth1979 wrote: »

Hi all,
I work for an independent gift retailer and we wanted to start stocking a particular company's goods. They are a popular company and have said that they are not opening any more accounts in the area. I believe that there is still a high enough demand for us to give over space to the range due to the amount of times our customers ask us to stock it. So I was wondering, is there a legal obligation on the company to force them to supply us? Any thoughts and experiences would be appreciated.
Smyth:o

There's nothing that you can do, other than as one poster stated put a sales presentation together for the supplier. I wouldn't waste to much time chasing them. You could well kill any margin you'd make wasting time getting it in the door. If they're that select on outlets, they'll very likely probably require large minimum orders. It's a regular occurrence in the retail sector and has been carried out by numerous large jeans brands for decades. Even the car makers are getting in on the act ie upgrade your showrooms or else.

In stead of grumbling about it, look at it as an opportunity to cross sell to customers. Source something similar and sell it instead.

Customer: Hi, can I have some XYZ.
Retailer: Sorry that's not in stock at the moment, but we have ABC. It's just as good and it's the same price.

These are changing times and we'll all have to change mindsets and tactics.

A little simplistic maybe but you'd never know.


Good luck.