Talking shop: Which side are you on? - ToyNews

Talking shop: Which side are you on?

Suppliers selling directly to consumers via their own websites was the issue on retailer's lips this month. We found out what effect this has on business, prices, margins, stock availability and more...
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“This has a massive effect”

Obviously this has a massive effect on us as a retailer, as in reality it means that the suppliers are taking customers from us.

Ideally, if we have invested in one of their lines, we would like to be the only way that consumers are able to purchase that product.

In effect, I feel that this makes us into a window for the supplier’s sales. The customer can come to our shop to see the product, touch it, feel it, and then go and source it direct from the manufacturer at a lower price.

We have found that Lego is the main offender in terms of stock availability. We have had stock problems with Lego for two years now. The fact that they are able to offer their full product range on their website means that they are making sure they have stock themselves, rather than looking after the retailer and getting it over to us.

However, other than Lego, over the last few years, we haven’t really had a major problem being able to get hold of ‘hot’ products from any other company, so I don’t think this issue causes a problem in terms of stock availability, more in terms of price and margin.

Another problem it sometimes causes is that of returns. If someone is returning an unwanted gift, they tend to just take it back to their nearest shop. We don’t want to create bad feeling with good customers if they return something without a receipt, but it is becoming increasingly difficult for us to distinguish between a genuine return and one that has come from another source. We therefore end up taking back extra stock, which creates an extra gripe.

Kevin Willis, Pettits of Wallingford

“We’re not terribly bothered by it”

We've seen it happening more and more – it’s not terribly surprising. With the terrific success of online retailing, suppliers naturally have started to wonder why they can't increase their margins, and consequently profits, by selling directly to customers themselves; customers who may well be coming to their site anyway to check for new products or look for support etc.

We’re not terribly bothered by it, at least not yet. It’s a different business, with a new set of problems, managing stock levels for instance, knowing how to maximise potential from Google listings, rankings and so on and until they become experienced they’re not going to trouble us too much.

Most are still happy to list/link to other retailers and satisfied with picking up the odd sale here and there.

They’re not really set up for volume either and getting the customer service levels right can be a nightmare.
Plus companies like Firebox offer a fairly large and eclectic mix of products that a brand like Tomy, for instance, couldn’t and probably wouldn’t hope to compete with.

The only thing that would trouble us is if they undercut the SRP. It's illegal to price fix and you would naturally expect some healthy competition but not from the manufacturer.

As sales pick up and the suppliers become more comfortable selling direct, it might become much more of an issue but we're cool with it for now.

Ben Fowler, Firebox.com

“It was a horrible shock”

A manufacturer selling directly affects us negatively as a business. I am only a small shop, so it has a big effect on me.

I recently had a situation whereby I bought into a Playmobil offer and when I went onto their website, I found they were selling the product for just 50p more than I bought it for. I know my reps will do their best to sort this out, but it was a horrible shock.

Often, once postage and packaging is added on, these offers aren’t as attractive as they seem at first, but amazingly, the customers do still buy into them.

I do think that displaying the products on a website is a good idea as it allows the consumers to see what is available, but it’s very tough out there and I feel we need all the help we can get rather than increasing levels of competition.

I find it ironic that we have problems getting hold of Lego stock, but they are selling it on their own site. This hasn’t been a problem with any other company as yet though.

Sandra-Louise Hook, The Rainbow Toyshop, Waterlooville

“A good advertisement”

When suppliers started to do this, retailers were a bit non-plussed, but as time has moved on, we’re not selling any less, so it’s become less of an issue for us.

It can be a good advertisement and I think about half of the consumers will buy this way, especially when looking for a particular item. I think cash-rich, time-poor customers also shop this way, but those who have time and are a bit more picky still come to the shop.

As long as we can keep the same prices, I don’t think it poses too much of a problem. We use the sites like Lego and Playmobil as a price comparison. That way, if anyone comes to us saying they can get an item cheaper elsewhere, I whip up the supplier’s website to show them the official price.

It tends to go through waves, Hasbro have stopped selling on their site, but Character Options recently started to. As annoyed as I was when it started to happen, I’m not any more, there is no point in moaning about it. Less and less suppliers produce a physical catalogue – only Playmobil do this now, so the site can be used as a resource in a positive way.

The only real downside is that sometimes promotions will go up on the supplier’s site before we find out. Then we get the customer saying to us ‘this is £20 on the Lego site and you are selling it for £30’ and that’s the first we’ve heard of it.

I’ve noticed some wholesalers are also now selling direct to the consumer at prices that are little more than we would call wholesale prices. I just won’t give them my business, I won’t buy from them.

The world keeps turning and there’s nothing you can do to stop this happening. They haven’t been underhand about it, so you can’t really complain. The way I see it is if I can keep my little percentage of the entire toy market, I’m happy.

Paul Wohl, Argosy Toys, Westcliffe-on-Sea

“I don’t mind them doing it”

I don’t think that this has much of an effect on our business as those suppliers who are offering this service, like Lego and Playmobil, are tending to stick to the recommended prices.

I have no problem with competing with companies who stick to the fair prices, whether they are retailers or suppliers. Those that compete at lower prices are the problem.

I realise that nobody can dictate prices, but there should be a guide figure that we all work within. If companies stick to that, it won’t pose a problem for other retailers.

What I do have a problem with is that as a retailer, I often can’t get hold of the stock I need, yet it is available for customers to buy on the suppliers’ websites. They are sometimes stocking their shelves before looking after their retailers.

But overall, I don’t mind them doing it. They are in business to sell their product in whatever way they can, so if selling direct to consumers helps them do that, I don’t have a problem with it.

Chris Enticknap, Pplumz, Pershore

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