|Web phobic companies - Yes they still exist.|
Manufacturer refuses to allow goods for sale on Internet.
Back around 2000, when everybody thought that discount E-commerce would wipe out mainstreet; many manufacturer's and distributers would refuse to deal with companies that sold products on the web.
Those fears were unfounded, and eventually everybody found that E-commerce was just another distribution channel, with it advantages and disadvantages, and market forces eventually even out the odds.
So I was shocked today, while exploring a new venture; the manufacturer said they refuse to have their goods sold on the internet.
Obviously this sales agent is stuck in the dark ages. I figured I must have encountered one of the last of the dinasaurs.
Anybody had any recent experience with Web Phobic companies?
Yeah, I kinda touched on it here -
[webmasterworld.com...] but got no traction.
Then came at it from a little different slant here - [webmasterworld.com...]
Haha, happens all the time to me. At first I would back of but then I dug a little deeper into European competiton law and found out that manufacturers in selective distribution systems are not allowed to prevent the online sale of their goods by brick & mortar stores inside the EU. (However they can refuse to sell to online only businesses). Now if one of the manufacturers tries to pull a stunt like this a fire a broadside of paragraphs.
Perhaps you should check if there are similar laws in your jurisdiction. Search for something like "vertical restraints" or "vertical agreements" and "internet".
They do have similiar laws in Canada and the USA, however Restraint of Trade lawsuits are long and expensive. It easier to deal with the competition.
Another option is to hide an online business behind a retail storefront, if you have a friend who owns a retail business; that could pass for the goods your are trying to sell.
On another note; finding a manufacturer that does not allow sales over the internet is probably a great find.
It creates virgin territory for a market segment (in this case ecommerce), and you either can
a) Develop a business plan, try to educate them on ecommerce, and offer a trial period.
b) If all else fails, and you think they have a great product that will sell online, find creative ways to get their goods, and sell them online.
I remembered recently, that there was a lady that worked in the luxury high end goods industry; and used her inside knowledge, contacts and reputation to convince these companies to sell their surplus high end goods, at discount prices to the unclean masses.
This was probably the last taboo in ecommerce penetration.
She is now rolling in cash.
There could also be good reasons a company does not want you selling on the web. They may have given that exclusivly to another entity. or they want to keep the playing field level for their affliates (such as amway, avon, etc..).
jNorth is right, it's not necessarily an "old way of thinking", there are some good reasons not to sell online.
A lot of companies still do this due to distribution contracts. If a manufacturer has given a distributor or retailer exclusive rights over a region, then selling directly online would be screwing their distributors out of that local sale. And likewise they may restrict their local distributors/retailers from going online with the products because that would allow them to potentially cross into someone else's territory with their sales.
Not all businesses need e-commerce, or want the extra sales. Sometimes keeping your brand "exclusive" is a smarter strategy. Frankly I'm surprised at the arrogance of the young webmaster types who think they know how to market a business better than 70+ year old $100M+ companies. No offense, but I'll take their strategy over our meager Internet strategies any day. :)
There are some good reasons not to sell things online. Large Bulky items that have a high return rate, is one example.
However, if a manufacturer has created a product line, and has created an exclusive label, and are trying to control prices, and distribution channels; they are bound to fail unless they own at least 30% of the particular market segment (ie the De Beer's Diamond Cartel)
What happens is the manufactuer becomes dependent on high end speciality shops to sell their products. The manufacturer may also have a website that only sells at retail or slightly above. The manufacturer may also have factory outlets with a mix of end of lines and seconds mixed in with regular priced merchandise.
They have leverage the vertical supply chain, but they have created enhanced risks. They are selling goods at inflated costs, and they are built like a deck of cards.
If someone wants to sell the manufacturer products, there is nothing that can stop them from getting them fron a secondary source. Sure they will be paying more for the goods, but the large margin and low competition makes it worth while; and good money can be made until the market collapses; and then you move on.
Yes I know better how to market a business better than a 70 year old $100 company. I have seen plenty of 70+ year old large companies fail, because they tried to control the market, or are still using old marketing methods, and refuse to change.
Anti-Trust and Restraint of Trade laws were put in place for a good reason.
On a side note, I don't see how Avon and Amway fits into this. These are mass produced low quality products sold via a pyramid maketing scheme. Unless you are near the top of the pyramid, I don't see why anybody would want to sell this stuff on the web.
[edited by: lgn1 at 4:04 pm (utc) on Feb 12, 2011]
|On another note; finding a manufacturer that does not allow sales over the internet is probably a great find. |
I like the way you think :).
Back 10 years or so ago I had to source a textbook title that I sold online. The sole distributor in my country refused to sell to online only bookstores. And laws in my country prohibit purchase of books from other countries where there are distributors in the country (you can't make this stuff up. Protecting culture or some such nonsense).
Frankly, these people are idiots. Justify it however you want, if someone wants to buy your product and you're not selling then that's just nonsense.
I think the way products and materials are bought and sold, is in a real state of change right now. It's going to take a while for all the old heads to disappear, but hopefully everything will become a lot more streamlined after that. The fact that, to this day, the majority of parts/materials manufactures that I call, refuse to take direct payment right over the internet or phone for what I'm looking to buy, is ridiculous. During a time when everybody is whining so much about the economy, you would think people would be doing everything they can to sell stuff. But I can call most manufacturers and say... "Hey... I want to buy 500 of these right now... Got my card in my hand"... and all they do is tell you they're going to mail you some 5 page account application.
I've worked at many businesses, where you soon find out that the person who is really in charge is not the owner, but some ancient bookkeeper that lives in the stone age... Their main priority is not making money, but following some sort of Nazi-like paperwork scheme she's laid out. Nothing is allowed to get in the way of that, including sales.
I run into all sorts of people that dip their toes into the INet waters but they haven't a clue how fast the waters are moving and no clue how they appear to anyone that might actually visit their website - let alone try to buy from them.
I agree that not all products translate well to web sales. It's also true that many of these could benefit from a bit of creative thinking using the web.
Example: selling a car, or dishwasher, or lumber. Any of these could be promoted via various channels using a website and other online tools but webphobic business owners have tunnel vision and think of straight up eCommerce. I see a shift happening but it will take several years before they get it.
"Hey... I want to buy 500 of these right now... Got my card in my hand".
You weren't asking for them to be delivered to Nigeria by any chance? Seriously offering a large cash transaction in a sector that normally works on a basis of 30 or 60 day accounts would be thought a trifle fishy.
webphobic business owners have tunnel vision and think of straight up eCommerce
Mirrored by webphiliacs who think that the web is the only channel for promoting ecommerce.
|You weren't asking for them to be delivered to Nigeria by any chance? Seriously offering a large cash transaction in a sector that normally works on a basis of 30 or 60 day accounts would be thought a trifle fishy. |
Well, it's not like I'm some guy calling them up with some sort of foreign accent, and wanting to buy 500k of stuff or something. These are just regular small businesses. Not Sony. I use tons of different parts... I'd be filling out account apps 7 days a week if I went that route with everything. I'm not Boeing... Unfortunately I don't have people to do all that stuff for me. Wish I did. The guys that just sell to me get my business and have no problem with it. The guys who don't, don't. Their loss.