Re: [CH] retail racketeers
BrentLeatherman@netscape.net
Mon, 14 May 2001 13:05:58 -0400
I don't post too much around here, but read constantly, and would like to add my 2 cents on this issue. What you're stating is the main reason I make it a point to *not* go to K-Mart, Target, Walmart, etc, etc, ad nauseum...
Support you local stores!
B
Margaret Lauterbach <melauter@earthlink.net> wrote:
>
> I've heard the same story from inventors of useful products. How in bloody
> hell do people get their inventions or products on the market? You have to
> be rich to start with. My friend was charged $100 a month or something
> like that for hanging space near the cash registers at KMart. And Sears
> ordered a thousand electric heaters from him, saying up front they wouldn't
> pay him for six months. Just think of the alternative products out there
> that can't get a place on the shelves, but you'd like much better than what
> they do have. This is the contorted view of competition that retailers and
> wholesalers know and love. It ain't what they teach in schools.. But I
> think they'll sing a different tune when online sales begin to hurt
> them.Margaret L
>
> Date: Sun, 13 May 2001 17:25:21 -0500
> From: "wildpepper.com" <jim@wildpepper.com>
> Subject: Re: [CH] $$$
> Hooray for you Peter!
> Sorry to jump on this one late, but I've been out of town for the
> weekend. A post on that later....
> Another thing that happens is that the larger retailers demand something
> they call a 'slotting fee' (we would call it 'extortion') for those
> prime shelf locations. When, as a small producer, I approach them about
> placing my stuff in their stores, they typically ask 'how much do you
> believe in your prodcut?' That's their lead-in for demanding money up
> front for shelf space. That's only the start....
> Another racket that causes me to charge way more than I would like to is
> that most large retailers also work it like a giant consignment sale.
> For instance, they order a pallet of sauce from me. I pay to produce it
> & ship it to their warehouse. Do they pay for it yet? Not on your
> life! They don't even claim ownership of it yet for if their 'top gun
> fork truck jockey' sticks the forks throuh the pallet, I'm commanded to
> remove the damaged product and replace it- at MY expense!!
> Yet another ploy used by retailers and distributors is to (in addition
> to everything else) assess an 'advertising fee' or 'promotion fee'. It
> goes like this: we're going to proudly feature your sauce in our
> upcoming newspaper insert since Cinco de Mayo is approaching. Oh, BTW,
> if you want us to feature yours, instead of brand X, you need to pay us
> to cover the cost of the advertising AND since it is on sale, you need
> to lower your price to us.
> It goes on and on.....
> As Peggy also mentioned, economy of scale comes into play as well. I'm
> You also have to remember that I don't see as much as HALF of that $7
> you are charged either! Most all retailers calculate they need a 50% to
> 70% mark up to cover their costs (utilites, rent, labor, samples, taxes,
> etc). Distributors most often request a 20% mark up and wholesalers at
> least 10%.
> - -Jim C
> Mild to Wild
>
>
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