22 replies to this topic

[PurpleDog]

Has anyone come across this site ? Two of my customers needing notebooks have !

They adverstise Leeds and Hit Promotional Products on thier main page, and sell those Leeds and HPP products to anyone at way below the standard pricing listed on Leeds and HPP's websites. I am comparing net to net pricing.

I've reminded my customers that PurpleDog stands behinds its products 100%, that we don't invoice until we are told by our customer that they are 100% happy with the order, and that we bill net 30 days. And of course they are already aware of our top notch customer service. =)

But, as we all know, price is price is price. Does anyone have any additional suggestions on how NOT to lose an order to PMSI ?

[promomanagers]

What I can tell you is this, there are much, much larger internationally known competitors selling sometimes at 5 and 10% online...on some of the items you described. Some of their sites you have to register for to see the prices but anyone with a free email can get an account. Some of those sites actual list the comparitive prices of stores like the one you mentioned right on the page to show how much cheaper they are. In the end you have two choices, sell at those prices when needed or potentially lose the customer. There are times when we have people calling us looking for us to sell at a loss and we can confirm that they are indeed offering the same item from the top 10 or 15 suppliers because they're imprinting in house, or cut a special deal. You have to remember some of these companies do millions and tens of millions with suppliers..they may be moving older items or items not selling well for suppliers at special rates, who knows? Also keep in mind one of the first and biggest online players has people over in Indonesia now doing their customer service so they're going to sell at less.

In defense of the group you mentioned - people I do not know at all by the way....prices are changing so often and in some cases dramatically this year it's tough to keep up. There are items from those brands up 10-15% since last Summer. It's really hard to keep up with the pricing changes particuarly if the products aren't triggering any looks by customers to raise an eyebrow. IE, until someone calls or tries to place an order it may just be that prices are wrong. But without going into details I just took a sample of 5 items from their site and went to the two biggest international organizations I know and I found them there for maybe 5-10% less and up to 15% if I went looking for one of their 10% coupons online.

In the end you'll find customers that price shop you often aren't loyal but you probably aren't going to have a lot of choices. Also keep in mind it's not hard now to buy factory direct through alibaba and places like that and cut out another 40%....

Another trend to look out for is the less than minimum stuff, an entire market is being created of $100-150 orders because distributors looked for a way to beat out others in total price and started eating the less than minimum charge and doing 1/2 orders.

I gave the example before, we lost a Bic order last year for a repeat customer that we'd really taken care of because someone was willing to sell at well under 5% on a mid five figure order ON TERMS. No doubt we've lost the client, but at that % and those terms, I'll take my chances on a lottery ticket first. No hard feelings, that's the way it is now.

In the end all you can do is sell your services and yourself and keep in mind that even if they don't go with the cheaper domestic distributor, they can actually cut us all out on the international stage. The factories that some of the suppliers use are now selling direct too.

[PurpleDog]

re: www.callpmsi.com

Thanks promomanagers for your reply. It's a shame that the lines between supplier, distributor, and end user are now so blurred. I remember way back in 1996 when I first started working in sales for an ASI / PPAI supplier, I was told that if the caller on the phone did not have an ASI or PPAI number to simply refer them to a local distributor and politely end the call.

I had a conversation with Hit Promotional Products this morning, and was told that they sell to PMSI and that PMSI is "just another distributor." Yeah right. =)

I will not use HIt PP or Leeds again because of thier "we will sell to anyone" tactics. I would also be interested in a list of other suppliers like these so that I could avoid using them.


Phil

[promomanagers]

re: www.callpmsi.com

Thanks promomanagers for your reply. It's a shame that the lines between supplier, distributor, and end user are now so blurred. I remember way back in 1996 when I first started working in sales for an ASI / PPAI supplier, I was told that if the caller on the phone did not have an ASI or PPAI number to simply refer them to a local distributor and politely end the call.

I had a conversation with Hit Promotional Products this morning, and was told that they sell to PMSI and that PMSI is "just another distributor." Yeah right. =)

I will not use HIt PP or Leeds again because of thier "we will sell to anyone" tactics. I would also be interested in a list of other suppliers like these so that I could avoid using them.


Phil

The problem is your customers will buy from whoever they like and it might as well be you. There's a legal issue here too, suppliers can attemp to enforce vertical pricing rules/MAP pricing, but it can get expensive and if the biggest clients don't want to play nice it can get a little ugly if you're telling a 100k a year account you must sell at 40% while the 300 million dollar a year account is selling at 12%, it's an issue of collusion so must have hands off now. In no case can they tell someone what they must sell at, they can try to enforce advertised prices is about it.

Hit and Leed's are great companies, whether you buy from them or not they have products clients want and there will always be someone who will beat you on price. We are bidding on a job right now, civic job so it's automatically 3 bid and goes to the lowest bidder...we know darn well it's probably going to go to someone at 15k at probably 10 or 12%? We can bid or not, but that's the way it is. I'm going to deliberately reverse the first two letters here, so reverse them but zs-wholesale dot com, go check them out and take a look at what they have. We've had customers send us their quotes, they make all the same stuff, probably in the same factories in china for 30-50% below our cost! At one time their delivery was 30-60, now it's down to 15 days. I've heard horror stories, but the fact remains...you can't worry too much about price and at the end of the day the customer that cares only about price will mostly only ever care about price and as soon as you stop giving them the best price they'll drop you anyway.

I think you'll find with most clients if you're close to the competition they'll stay with you and if they don't and blame it on price you either don't want them as a customer or for some reason they're using that as an excuse. IE, they're unhappy with some other aspect of the service and that's just easier than saying they don't want to do business with you or me. As far as the suppliers go like Leed's and Hit you have to cut them a lot of slack. They're all concerned about the direct overseas players too as we should all be, the more business they can get now the more they build their brands in the end the more resistent they are overall to being chopped from overseas. Ultimately the call is yours to sell at the rates you can be comfortable with and walk away when you cannot.

I think all of us, self included are naive to somethings that go on in the business. I won't get into details here, all I'll say is what you're being exposed to now is fairly common. Be much more worried about the suppliers that sell direct, that have inhouse people onsite at companies, that cut out their own sales reps and sell direct to distributors so you have no shot of ever matching the other distributors prices etc....

Good luck!

[sharona]

Have you talked to your Leeds or HPP reps? I think you should get their feedback as well.

[promomanagers]

Have you talked to your Leeds or HPP reps? I think you should get their feedback as well.

There's a bill before Congress that would take us back to the point where it'd be illegal for manufacturers to dictate prices that resellers sell at. http://judiciary.hou...11-37_49387.PDF

Besides the federal level, most States are going after manufactures that try to set prices. http://www.usatoday....ourt22_CV_N.htm

It's a no win situation for manufacturers, and we can all buy most of the same goods direct overseas and cut them out entirely - but assume risk of getting products from China to here. That's why I'm saying better to focus on why the customer is out price shopping than anything else, because there isn't much the manufacturers could or should do with the threat of legal action over their heads and the potential negative PR that would come from that among their end user customers (our customers).

Lots of good reading in the USA Today article to set the backdrop of what's going on....

[royster13]

I think there is an assumption that big direct sellers are buying the same products as us from the same suppliers as us...That may not always be the case......In many cases they have similar items sourced directly from overseas and bypassing traditional suppliers.....

Even me as a small seller does that occasionally where I can not come close to competing by buying from traditional suppliers.....

[promomanagers]

I think there is an assumption that big direct sellers are buying the same products as us from the same suppliers as us...That may not always be the case......In many cases they have similar items sourced directly from overseas and bypassing traditional suppliers.....

Even me as a small seller does that occasionally where I can not come close to competing by buying from traditional suppliers.....

Great point and something for the OP to mention, make sure you're stressing the part numbers you are using. We see that all the time, they ask for a quote on a major brand product from us and we're 25% higher because someone else is quoting a totally different product of lesser value.

[robinr21]

I took a look at the site yesterday, quickly, and compared pricing on one Leed's product. It appears to me that they are probably buying at EQP and marking up from there. I quickly estimated a 20% markup on their end quantity, discounted Leed's product.....so it's doable that they are buying just like the rest of us and cutting margins on larger quantities.

I did not read all of the above responses, so I hope I'm not duplicating what anyone else had to say.

[PurpleDog]

Thanks for all the thoughtful responses. Here's A follow up:

I talked briefly with my sales rep for Hit Promotional Products, who emphatically told me that they "do not sell direct." I asked her if she would sell me the 2 [notebook] items at the same price that CallPMSI sells them for, and she told me she had to look into that, that she was driving, and that that she would “get back to me” later that day. I’ve heard nothing from her since, despite leaving another message.

I have 2 calls into my Leeds rep; and have received no response back to date. Perhaps why I’ve not heard back from him is that I don’t sell a lot of Leeds stuff ?

[jimknecht]

This thread confuses me. I see all kinds of words like selling direct & blurred lines between supplier, distributor & enduser. When told this company is a distributorship, the response was that wasn't true. Also see a response that they maybe aren't selling the same product as you would offer.

Why? Why so much confusion on a company like this? You really think they are a supplier offering all this product? Why the confusion over why they can sell for less that you? Why would you expect Hit to sell to you at the same price as this company?

Seems to me, and I sure don't know these folks, that this is simply an online distributor? One that expended a lot of resources (money) to build an attractive site in order to get lots of orders. We deal with many such distributors & most suppliers will offer them volume discount pricing. So if this company can send Hit 10 or more orders a day, I would expect Hit would offer them better than catalog pricing. What I don't understand is why a distributor that doesn't push that line & maybe only sends a handful of orders a year, would expect to receive the same pricing.

It is a real simple business model. Build a nice, user friendly website & offer discounted pricing to get high order volume. With that high order volume, negotiate discount, volume pricing with an industry supplier. No one makes full commission but both distributor & supplier help to make up for that with volume. There is nothing nefarious about such a business relationship. There is nothing to cause you worry about a supplier selling direct. It is simply a different business model than the "traditional" distributor model of years past. Keep in mind these folks just aren't purchasing a stock website from someone like ASI, Sage or whomever & hoping endusers show up. These folks spend big buck in developing their site plus spend big bucks in attracting their clients.

[promomanagers]

This thread confuses me. I see all kinds of words like selling direct & blurred lines between supplier, distributor & enduser. When told this company is a distributorship, the response was that wasn't true. Also see a response that they maybe aren't selling the same product as you would offer.

Why? Why so much confusion on a company like this? You really think they are a supplier offering all this product? Why the confusion over why they can sell for less that you? Why would you expect Hit to sell to you at the same price as this company?

Seems to me, and I sure don't know these folks, that this is simply an online distributor? One that expended a lot of resources (money) to build an attractive site in order to get lots of orders. We deal with many such distributors & most suppliers will offer them volume discount pricing. So if this company can send Hit 10 or more orders a day, I would expect Hit would offer them better than catalog pricing. What I don't understand is why a distributor that doesn't push that line & maybe only sends a handful of orders a year, would expect to receive the same pricing.

It is a real simple business model. Build a nice, user friendly website & offer discounted pricing to get high order volume. With that high order volume, negotiate discount, volume pricing with an industry supplier. No one makes full commission but both distributor & supplier help to make up for that with volume. There is nothing nefarious about such a business relationship. There is nothing to cause you worry about a supplier selling direct. It is simply a different business model than the "traditional" distributor model of years past. Keep in mind these folks just aren't purchasing a stock website from someone like ASI, Sage or whomever & hoping endusers show up. These folks spend big buck in developing their site plus spend big bucks in attracting their clients.

As always you pretty much nailed it.

If you go and look at alibaba, or any of the asian direct sites you can go ahead and buy the exact same product made in the exact same factory but without the "brand" name behind it. I am not going to list them here but I've yet to find an item from any of the main business accessory supplier that I couldn't buy direct from China for much less - or as it turns out that my customers couldn't buy for less. The imprinting is done in China, the cost will be 40-50% less than what you pay here for the same item. #1 it may get held up in customs, #2 you will be dealing with someone thousands of miles away, #3, if it works out you save a lot of money. They'll also sell direct to your customer. But please don't think buy forcing PMSI to raise their prices you're helping....those same customers will just dig a little deeper and find it from someone overseas and cut everyone out. A couple of years ago Columbia got very aggressive on MAP pricing. Not long after they were gone from NES and moved to Sanmar who worked hard to enforce pricing and aggravated a ton of distributors I think in the process. It's difficult to be told you must sell an item at $40 when at the time you could go buy the same item from a local sporting goods store that was offering it at $34, giving a $20 gift card with the purchase of $50 or more, and then tacking rewards points on top. It didn't work and last I heard Sanmar/Columbia are parting ways after 2012 which I think means for the first time in decades Columbia will be gone from our industry. That doesn't benefit anyone.

We are not talking about the infamous Florida company that sells pens on one site to our customers and sells to us on another site as distributors.

That's different than a supplier selling direct which is not what any of us were implying. You have one of the top suppliers in the industry explaining it to you very clearly. If he has someone buying a million in goods from him in a year they're probably going to get a better price than the person selling $5k. If you want the same price, sell the million and dedicate the time, resources and personell to sell his brand with some exclusivity. I think Jim would agree with me on this, there's a reason why incentives are given to distributors that dedicate a lot of resources to sell their product. It benefits both mutually.

As far as online sellers go, the competition is there and as I've said it becomes increasingly cumbersome to maintain catalogs as they grow. Imagine some of these online distributors with a 100k products that are changing prices sometimes weekly. One of the companies mentioned here raised prices on some items 15%. Instead of calling the manufacturer to complain, why not drop a nice line to the distributor nicely letting them know the price might be lower than they intended. That will generally get someone to respond. But be prepared. We had a situation last year where a major, major online player was selling at about 5%...when notified they dropped the price and we had two choices sell at 3% or let that part of the order go and maybe lose the entire order.

The websites a lot of these places run probably cost 50-100k when all is said and done to setup properly. There's a cost of hundreds if not thousands a month to maintain them. The perception that they're selling for less because their costs are less really isn't true. The upfront costs to do it right are pretty massive.

Good luck, but I think Dooley just gave you the best explanation.

[PurpleDog]

This thread confuses me. I see all kinds of words like selling direct & blurred lines between supplier, distributor & enduser. When told this company is a distributorship, the response was that wasn't true. Also see a response that they maybe aren't selling the same product as you would offer.

Why? Why so much confusion on a company like this? You really think they are a supplier offering all this product? Why the confusion over why they can sell for less that you? Why would you expect Hit to sell to you at the same price as this company?

Seems to me, and I sure don't know these folks, that this is simply an online distributor? One that expended a lot of resources (money) to build an attractive site in order to get lots of orders. We deal with many such distributors & most suppliers will offer them volume discount pricing. So if this company can send Hit 10 or more orders a day, I would expect Hit would offer them better than catalog pricing. What I don't understand is why a distributor that doesn't push that line & maybe only sends a handful of orders a year, would expect to receive the same pricing.

It is a real simple business model. Build a nice, user friendly website & offer discounted pricing to get high order volume. With that high order volume, negotiate discount, volume pricing with an industry supplier. No one makes full commission but both distributor & supplier help to make up for that with volume. There is nothing nefarious about such a business relationship. There is nothing to cause you worry about a supplier selling direct. It is simply a different business model than the "traditional" distributor model of years past. Keep in mind these folks just aren't purchasing a stock website from someone like ASI, Sage or whomever & hoping endusers show up. These folks spend big buck in developing their site plus spend big bucks in attracting their clients.

Jim, thanks for your response. You are indeed correct. But at the end of the day, I’m still pissed off about the situation. Hit Promotional Products is knowingly undermining my efforts and then denying it. If they came out and said "Yeah Mr. PurpleDog, we sell CallPMSI.com hundreds of thousands of products and they offer them at very low margins", I'd be OK with it.

But no, they want to maintain that they are ASI / PPAI distributor friendly when in fact they [thru CallPMSI.com] offer anyone and anyone with a credit card a better deal than I can. I've had 2 friends call Hit PP – both live and work within 30 miles of me. One owns a restaurant, and the other a small energy consulting company. In both cases, my friends asked about a small order of notebooks and in both cases were directed to CallPMSI.com.

So, I’ve learned a lesson ... and also discovered I’m perhaps a bit naive when it comes to suppliers today. But in the end, people buy from people they like, from a company that makes it easy for them to order, from a company with fantastic customer service, and from a company that will guarantee they are happy with their purchase. In that regard, I have both CallPMSI and Hit Promotional Products beat. =)

I will also excercise my right to never sell Hit PP or Leeds stuff again. Its the only way to "vote" with supplers it would appear.

[royster13]

Well Purple Dog I think you missed an important factor about why people buy from who they do.....Sorry to say that price is a "huge" factor these days....If not the #1 reason, it is certainly high on the list....

[promomanagers]

We don't do much with HIT at all, but they're a great company. You're implying in this post that they are colluding with CallPMSI and I'd be very careful of making those types of statements unless you have undeniable proof that's actually happening.

Another poster already explained to you what they're doing, they get high volume pricing and are able to sell at a lower margin but are probably still at 30+%. That's the nature of the business, and EVERY supplier operates the same way, PPAI ASI or not. If you choose to only do business with suppliers that don't do that, you'll be able to sell calendars from Norwood, as they do not offer EQP. I'm pretty sure every other product in the industry is on the former plan.

[PurpleDog]

Well Purple Dog I think you missed an important factor about why people buy from who they do.....Sorry to say that price is a "huge" factor these days....If not the #1 reason, it is certainly high on the list....

Royce ....... I agree, price is HUGE ! I guess I'm lucky ... most of my current customers also look at the other factors I mentioned and won't go elsewhere unless the price difference is substantial.

PromoManagers ....... I choose not to to business with Hit Promotional Products and Leeds because they have their name [as of 2.14.12] prominently displayed on the CallPMSI.com home page. That is a simple and undisputable fact. Other than that, I'm not accusing anyone of anything. =)

[jimknecht]

But at the end of the day, I’m still pissed off about the situation. Hit Promotional Products is knowingly undermining my efforts and then denying it. If they came out and said "Yeah Mr. PurpleDog, we sell CallPMSI.com hundreds of thousands of products and they offer them at very low margins", I'd be OK with it.

But keep in mind, it is none of your business what price they offer another distributor. That is between the two involved parties. If you or anyone were to ask me what price structure I give company X, I'd tell you to mind your own business. If I had a special offer with you, I doubt you would want me telling someone else. A supplier's dealings with any distributor are private.

But no, they want to maintain that they are ASI / PPAI distributor friendly when in fact they [thru CallPMSI.com] offer anyone and anyone with a credit card a better deal than I can. I've had 2 friends call Hit PP – both live and work within 30 miles of me. One owns a restaurant, and the other a small energy consulting company. In both cases, my friends asked about a small order of notebooks and in both cases were directed to CallPMSI.com.

If true, that would be disturbing, but as already mentioned, I'd be careful of any such public accusations.

So, I’ve learned a lesson ... and also discovered I’m perhaps a bit naive when it comes to suppliers today.

Maybe so. Most suppliers offer volume discounts to distributors that really push their line. Once again, nothing sinister or underhanded here, just plain business. No different than if you placed an order for 10,000 cups, and distributor X placed an order for 500 cups. You would get a better price. A distributor that places 10 orders a day will get better pricing than one that places 2-3 a year.

But in the end, people buy from people they like, from a company that makes it easy for them to order, from a company with fantastic customer service, and from a company that will guarantee they are happy with their purchase.

I agree completely & price is not always the deciding factor. However, that being said, I think it an inaccurate assumption to think you will always offer better service. Many of the big online distributors that use our product have amazing service. They have lots of telephone customer service, multiple artists, websites that allow an enduser to browse & order 24 hours a day... where one can view thousands of clipart & many, many fonts. They can offer 24 hour service just as a traditional distributor. In fact, many of the younger folks of today prefer to order online and not deal with a real person.

[PurpleDog]

In fact, many of the younger folks of today prefer to order online and not deal with a real person.

About a 1/3 to maybe 1/2 of my transactions do take place now via email and without any telephone contact. But I'd like to think that most people still appreciate human to human contact face to face or via the phone. And I’d like to think my experience and advice is worth something ! I hope I can put in another 20 years and retire before the sales process is 100% automated, and with my memory full of my old sales stories of fax machines, traveling via bus trade shows, the PPAI show in Dallas, and my great salesmanship. =)

[promomanagers]

Purpledog, all I see on their site is a new for 2011 with Hit, which only furthers the point that they probably haven't updated the site in many months. Prices have risen dramatically as you know.

I'd have just cut to the chase and sent them a nice email asking if that's really the price they intended to sell at and gone from there. My guess is it's probably 5% or more lower than they planned because of the two price increases in the last 6 months.

[PurpleDog]

Purpledog, all I see on their site is a new for 2011 with Hit, which only furthers the point that they probably haven't updated the site in many months. Prices have risen dramatically as you know.

I'd have just cut to the chase and sent them a nice email asking if that's really the price they intended to sell at and gone from there. My guess is it's probably 5% or more lower than they planned because of the two price increases in the last 6 months.

I was told that "any questions about pricing have to be answered by my sales rep." As I mentioned, I've called her once and explained the situation. She told me she'd research it and "get back to me." That was a week ago or more. I'm not holding my breath. I ended up finding pretty much the same notebooks elsewhere, have obtained samples and pricing, and have forwarded them to my customer.