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On the Souring of the spring
04 August 2010
Nothing to do with e-cigs, of course...
Imagine the situation... For ages you've had a lucrative market pretty much to yourself. Even internationally, other dealerships could not sell into your home market, and wholesalers could not sell to dealers in your territory...
And then it ends, either by the contract running out, or because you and your supplier fell out for some reason. Whichever, however, whatever, it comes to a close. Suddenly, dealers in your home country can get hold of the product range you've had at direct wholesale prices, without your middle-man markup. They may actually take market from you.
So, what would you do? How would you minimise the possibility of other dealers grabbing your customers?
Y'know what I'd do? I'd have a sale. I'd cut prices so far that everybody would simply stock up - even other dealers would buy from me, because, once my sale had ended and prices went back up, they'd be able to turn a profit - because they probably would not have been able to buy from me as cheaply as I was retailing now.
But then, when the sale had ended, retail customers would think long and hard about paying the pre-sale prices. They'd know that I could sell at half that old price and still survive in business,and they'd expect everybody else to do the same. So, I'd keep buying at pretty much my old price, but I'd chop the old price by maybe as much as a third - but more likely a quarter - to hang on to as many of the new customers I'd got as a result of the sale.
Either that, or I'd shut that shop up and - ooh, I dunno - move to America. Either way, I'd have made quite a mess in the market, maybe even a market which needs stability and support moving towards potential legislation.
But, of course, this kind of thing never happens in real life, does it? And definitely not in the world of e-cigs...
Imagine the situation... For ages you've had a lucrative market pretty much to yourself. Even internationally, other dealerships could not sell into your home market, and wholesalers could not sell to dealers in your territory...
And then it ends, either by the contract running out, or because you and your supplier fell out for some reason. Whichever, however, whatever, it comes to a close. Suddenly, dealers in your home country can get hold of the product range you've had at direct wholesale prices, without your middle-man markup. They may actually take market from you.
So, what would you do? How would you minimise the possibility of other dealers grabbing your customers?
Y'know what I'd do? I'd have a sale. I'd cut prices so far that everybody would simply stock up - even other dealers would buy from me, because, once my sale had ended and prices went back up, they'd be able to turn a profit - because they probably would not have been able to buy from me as cheaply as I was retailing now.
But then, when the sale had ended, retail customers would think long and hard about paying the pre-sale prices. They'd know that I could sell at half that old price and still survive in business,and they'd expect everybody else to do the same. So, I'd keep buying at pretty much my old price, but I'd chop the old price by maybe as much as a third - but more likely a quarter - to hang on to as many of the new customers I'd got as a result of the sale.
Either that, or I'd shut that shop up and - ooh, I dunno - move to America. Either way, I'd have made quite a mess in the market, maybe even a market which needs stability and support moving towards potential legislation.
But, of course, this kind of thing never happens in real life, does it? And definitely not in the world of e-cigs...
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