Thursday, June 7, 2007

Know your enemy... er..competition. Wait make that manufacturer.

I love to sell saddles. I've been blessed to not only be successful in selling saddles, but to have a business partner who has the same christian faith as me. There are many discouragements in this business, which I'll get to later, but to have my father-in-law as a business partner has been a great blessing and encouragement.

Dale and I have taken many actions to be sure that we know as much about saddles as we can, and that we stock those saddles in our store. We want to be able present the best saddle for any one of the many situations our customers are in. As of today, we have 462 saddles in our warehouses. In selling saddles, we are very careful to be respectful of our competition. We feel that though they are competition, it is our job to be the best at what we do, regardless of what our competitors do. In other words, we do not bash or talk down our competition. We feel it is rather unseemly.

So we are baffled by not our competition from another retail store, but the competition from one of our manufacturers. For brevity sake, we will call our un-named manufacturer/competition as Company A. Among other manufacturers, we happened to be Company A's top dealer in 2006. That is, we sold more of their merchandise than any other single store in 2006. We are continuing to have very strong sales in 2007 for Company A. In the past week or two, Company A started selling saddles directly from their website. It is generally a bad idea for a company to start competing with their dealers, but this is what Company A has started doing. But, they weren't satisfied with a fair, although very odd, competition in selling their saddles to the customer, Company A decided on their website to take a little swipe at their online dealers.

In essence Company A is saying "Don't waste your time with our dealers that have an online store." HorseSaddleShop alone has 96 of Company A's saddles in stock. Hey, Company A, I have over $100,000 of your products in my inventory and you are telling customers to not buy from me!?! It is not just HorseSaddleShop but also the other fine retail stores of Teskey's, Pards, Rod's, Country Supply, State Line Tack, Stage Coach West, FM Brown, Holtz Saddle Co., Outfitters Supply and others.

It appears that Company A is not performing so well these past few years, and rather than attack the problem they have decided to attack their retailers. You may ask, "What is Company A's problem?" Well, when I visit the Internet Archive of HorseSaddleShop for January of 2004 one of Company A's saddle that sold for $1,162.50 now has to be sold for $1,499.00. That is a 29% price increase in a short 3 years. I believe inflation has only risen 9% in the same amount of time. That means Company A has increased prices 21% over inflation adjustments.

I don't know how this is all going to pan out, but I do hope that Company A will start putting more effort in manufacturing so that we retailers can put more effort is selling their saddles. As it is, we continue to sell their product, but it does leave a nasty taste in our mouth, knowing our manufacturer would rather make the sale that the retailer. As I said, it is an encouragement to work with Dale as we remind one another that there is a God that not only knows, but gives me all that I need, whether pleasant or painful.


AppyGirl said...

Perhaps HorseSaddleShop and the other retailers of Company A's products need to return the stock to them for their online sales. Then, with the money refunded to you for such returns, invest in merchandise from Companies B, C, or D who respect and appreciate their retailers.

Just a thought.

Anonymous said...

I wonder 'Y' Company A would sell their own saddles and I also wonder 'Y' they would ask more for those same saddles than YOU, their leader in 2006 sales? I use as an example the Flex-Lite saddle model number 1661....your price is $1,550.00 and they are selling it through Shopatron for $1,675.00.
Things that make you go "Hmmmmm"

Chuck Klockow said...

Company A has since taken down the comment trying to sway customers away from their dealer’s online websites. I don’t know “Y” – well, I kind of know “Y”. That is some progress, but yes unfortunately they are still selling their products through their website and indeed are charging higher prices. I must say, that by far, we have sold more of their products than they have. That is while we are highly promoting company B (Reinsman), C(Crates) and D's(Billy Cook) fine products.