Monday, February 14, 2005

Some companies have a head for business....

.........this isn't a story about one of those companies.Ok, so most of you probably know I have been fighting these do-gooders attempting to buy a smoking ban from our lawmakers for about a year now. My business for 15 years has been selling Smokeeter aircleaners to bars & restaurants, thank you for helping me make a new career choice you spineless lawmakers. Anyway, I decided to put together a website (shameless plug) and start handling more residential oriented air cleaners.

Well last week I get an email from a supplier (whose name I won't dignify in writing here) that I can't advertise their product on my website. My other suppliers I work with are fine with free publicity as long as any pricing shown is list price, which they all are; even the product in question. But this company wants me to cease & desist selling their product. Well that's fine there is always a company eager for the free advertising; and the bonus is that the competitor's list price is 75% less. I not only save my customers money, but increase sales by handling a less expensive system.

My point is this, if profit is the bottom line why would a company turn down another avenue of free marketing? It's been interesting seeing how different companies handle the advent of internet marketing via their distributors. One supplier raised the wholesale price of their residential aircleaner by 40% so that they wouldn't have to compete on the internet with their distributors, that makes a lot of sense.

Look, before internet marketing; Company ABC sold their widget to their distributors for $5, the distributor sold that widget for the list price of $10 or whatever his local market would bear. But after the advent of internet marketing, some companies have decided we'll just raise the wholesale price of the widget from $5 to $8 to drive the distributors away and have all this internet business to ourselves, trouble is for every 1 widget sale to an end user; the company has alienated a distributor who used to order 10 widgets per transaction; that's apparently the new math, go figure.

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