What to do when your distributor also sells to end consumers and you are a retail store...

[TheBenchmarkSociety]

Hi guys,

I'm taking marketing course in college right now, and it is pretty interesting. I've just learned about the different distribution channels and such, and I pondered upon a question: what can you do, as a retail store, when your distributor is also selling to end consumers? Here's the story:

Say I have a Prada retail store in the U.S. (sell only Prada products), and I always stock up my inventory from the Prada U.S.distributor. I found out that my U.S. distributor is also trying to make not only my business, but also other end consumers' businesses as well via its own online store (I do not have an online store). Thus, the distributor is reeling in my potential customers by setting lower prices on Prada products than the prices I am charging in my retail store. In this case, what are my options?

I certainly cannot start a price war with my distributor because they will always win... I've been pondering on this question for a while now but can't really figure out how to overcome this. What are your thoughts?

[GotLiveChat]

You're selling locally via a retail store, and you're worried about the distributor's online sales stealing customers - yes? Or are you trying to sell nationally as well?

[TheBenchmarkSociety]

Of course retail stores are not only limited to selling locally. So if advertising campaigns can reach markets nationally, that would be even better. So yes, selling both locally and nationally.

[daveb1]

-Well first think about the old saying "location, location, location" - You must play of the advantage that you have a brick and mortar store and make sure it is in the right shopping "spot". Its not hard to imagine that the 60 year old lady that needs a new prada bag would never shop online but she has been to her outdoor boutique mall a million times. Location is everything when it comes to retail sales and it has nothing to do with online sales as the internet is the same place for everyone.

-Your staff. In a brick and mortar environment your sales staff can be so much more knowledgeable. They can be more personal. They can more customer service oriented. Human to human contact can be a powerful thing and is not really possible on the internet selling handbags.

-Presentation. In a brick and mortar store you have so many more options on presentation. Your physical display limits far exceed online pictures. The clients can touch, feel ,smell etc. when its in a live store.

-Time. Hint humans like instant gratification, hate shipping, need gifts for quick occasions etc.

There are lots and lots more differences within the online vs. brick & mortar shopping experience but you should get the idea. Look for the differences and exploit them to the max and a few dollars in price will mean very little. It's really like comparing apples and oranges even in today's internet age. Not by any stretch of the imagination does everyone shop on the internet just to save a few dollars. Shopping, technology and people are nowhere that advanced yet. I do not even know if my mom knows how to check email lol.