Supplier stops supplying

a major supplier decides they will only sell to my biggest competitor

[CliffR]

I sell widgets on a drop ship basis from more than 20 well-known widget brands. I am one of a number of smaller widget websites in an industry dominated by a single competitor (call them eWidgets), who seems to have about an 80% market share.

One of the brands I carry is very popular right now. I have been selling and promoting this brand for more than a year. Yesterday, I got an email from the supplier of this brand indicating that due to their license agreement, they will only be offering their brand for sale online through eWidgets, that monopolizing competitor of mine. The told me to remove all products and images from my site immediately.

Do I have any options here? My problem with this is that they already opened the door and allowed me to build up a business around their products. I have their products integrated in all my feeds for dealtime, froogle, nextag, etc. Removing these products now will damage my business considerably as it's one of my most popular brands.

So what would you do? Just lay down? Should I be on the phone to my lawyer, or is this just the nature of the business? Your thoughts are sincerely appreciated.

Thanks,
CliffR

[oddsod]

It's the nature of business unfortunately. That's why I'm always cautious about spending too much of time promoting one supplier's products/building infrastructure to sell his products.

[decaff]

Sorry to hear of your situation..

This is a difficult situation..

Company A(eWidget) wants to dominate a sector and dictate relationships (eWidget)...Companies B - Z want to play and work to create relationships and have some success promoting and selling ... Then eWidget works to sabatoge all this work by going to the manufacturer and hammering out an exclusive or nothing type arrangement...basically leveraging their 80% into 100%..

The only option you have is to approach eWidget and see if they are offering an affiliate program (and you can bet the payout will not be spectactular)...or
Find another competitive widget that is comparable to the one you were promoting and develop out this product to compete with eWidget and the manufacturer who have now locked out thier product offerings...

I work closely with a guy online who is at the top of his sector...now his sector is changing..in that other sites are offering a more diverse range of products...he has a relationhip in place with one of the top manufacturers in his sector and the way the relationship is structured ... it prohibits him from diversfying...he won't make a move because he has had this structure for the last 4 years...now I am watching all my hard work slowly lose its value in that sales are eroding and others sites are offering some killer products ..

I have watched our bookmarks (via my log analyzer) go up significantly as people are now window shopping deeper in this sector with all the new offerings...

painful..

[submitx]

If the widget is the only product of its kind, another option is to maybe become a manufacturer of a similar product and sell it cheaper than your competitor. Now days China is pretty good at duplicating almost any type of widget. Of course you have to be careful of legal and patent issues, so consult an attorney first.