Ask Tamara: Breach of Sales “Etiquette”?
I currently sell my product through retailers -- but I'd also like to sell it through my own website. Will retailers object -- or be less committed to my product?
–Emily, Santa Barbara, CA
Yes, some retailers will have an issue with this, asking, "Are you a retailer or a manufacturer?" However, experienced retailers understand that a good product will have competitors. You can allay their fears by strategically pricing your product for each sales channel.
Theoretically, you have the ability to sell your product for the least amount, which gives you an "unfair" price advantage. This is the retailers' main concern – that you will undercut their own sales. I suggest, then, that you do not charge less than your retailers! In fact, if customers can purchase product from your retailers for a bit less – while also having the convenience of purchasing from you, if they so wish – you'll take on the best of both worlds. A single retailer often won't carry your entire line of products, so another angle is to sell products on your website that your retailers don't already carry.
If you are in the early stages and haven't really established retail distribution, you can adopt another strategy – selling it at the suggested retail price. Then, as your distribution grows, raise the price on your own website so you will avoid undercutting your retailers. In fact, in this way you are reinforcing their own profit margins! Also give your customers a list of retailers to purchase from on your website. This way, having your own site becomes a plus for your retailers.
Then, the choice becomes the customer's. And either way you get the sale and you've preserved your relationships with your retailers.
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