Monday, April 15, 2013

Kerfluffle

This post is going to be somewhat vague (and a little weird), but I want to be up front with an issue that pops up from time to time in our industry from a business person's point of view.

I have used eBay as a way to clear excess inventory for over ten years now and have most recently started moving most of my operations (at full retail price) to eBay.  (You can find me at stores.ebay.com/Shakespeares-Peddler.)

Once in a while, I hear from a distributor or designer who is upset about the way I am selling her product (whether that be on my web site or elsewhere.)  It has come to my attention that some shops are complaining to at least one of my distributors about the fact I am using eBay to sell merchandise (most of this merchandise is at full retail price; certain older items, over-stocks, or otherwise less-desirable items I am offering in auctions.)

Now, one particular distributor has told me she can no longer sell to me, since I use eBay, as other shops have complained.  I still have a number of this distributor's products in stock, and am using eBay to sell them, much of it at full retail price.  Now, this distributor has told me I have to stop selling anything she wholesales on eBay, and she offered to purchase those items back at wholesale.  (Keep in mind, I paid shipping on those items for starters, and would have to pay return shipping, which would mean I would lose money taking this offer.)

This same distributor's products are sold every day at a discount on a number of other stitching web sites.  I have never personally agreed with the "everything on sale, every day" business model in our industry.  Our mark-up is low compared to other industries, but that decision is each business person's to make.  One of the beautiful things about being a small business owner is making your own decisions.

When I started my business 17 years ago, I faced numerous complaints from other shops (and distributors) who felt that online businesses were unfair and hurtful to the industry.  However, the shops who did not get on the Internet were the first ones to go out of business.  Times change, and so businesses must change, too.  Stubbornly hanging onto the past would mean our malls would be filled with buggy whip outlets and top hat stores.  (Well, and even then, how much longer will we have local malls?)  I have found on eBay that I can reach a much larger group of stitchers world-wide, and the format makes it easier for me to fill orders by taking out a lot of the steps.

No distributor (or designer, or manufacturer) has to agree to sell wholesale (or even retail) to anyone.  However, attempting to control the way a product is sold, adherence to terms of sale, limiting discounts, or agreeing to sell something at a common "retail" price is called price fixing and is punishable under the Sherman Antitrust Act, a federal offense.  Anyone who would bring such a case before a court and win can collect up to three times the damages sustained, plus full compensation of legal and prosecution fees.

I guess I just wanted to let y'all know that the kind of backstage bickering that goes on sometimes in our industry is not only meddling and counter-productive, it's also misguided, uninformed and potentially illegal.  Please know that I am not angry at anyone, nor do I wish anyone any harm.  There are so many great shop owners, customers, distributors, designers, and manufacturers out there!  And I love you guys!!!

31 comments:

marly said...

Are you kidding me? You paid for their product! Oh well. I'm not in the business so I should keep my mouth shut. Uh-oh....too late!

HollyXSing said...

Would the same be true if you sold on Etsy? It's not an auction?

Just asking...

-Holly

Rita said...

I have to agree with you. Sometimes when they're overly restrictive about how they're sold once they leave their hands, they end up hurting themselves instead of their desired outcome.

I also agree about the ones who blame the internet for hurting their sales are the ones who don't set up internet sales themselves. I try to buy from brick and mortar shops when I can but since it's over an hour to the nearest one (and my time spent driving back and forth and the gas $$ are also important), I often buy from internet shops.

I understand their are challenges owning/running a LNS but many who have problems aren't creative with their services they offer. Not all but some.

It's time for some of them to get with the times.

Eva said...

Sorry to hear of your difficulty! E-bay is just another way of selling goods, and just because it is sold on e-bay, doesn't mean it is sold at a discount. Frankly, no distributor should dictate how you run your business. Would you like a letter written to the distributor on your behalf. I would be happy to do so.

Nan ~ Threadwork Primitives said...

Yes, I'm learning this business can be full of kerfluffles at times. Stand your ground. You can't make everyone happy all the time, right?
Do what's best for you!

Kevin said...

You must be kidding me, right? I'm sorry, but this "holier than thou" attitude toward selling on EBay is absolutely ridiculous! I'm not ashamed to state here that I shop on eBay frequently, and in fact I found your new sampler there this weekend and ordered it immediately.

Why, I wonder, would any designer or distributor care where or how you sell the merchandise if you legally purchased it from them and are legally selling it? Even if you were offering it at a markdown, isn't it your property once you've purchased it? I mean, you could wallpaper your house with the charts if the fancy struck you, right? You paid for them, after all.

I have only recently realized there is this "stigma" that persists throughout this stitching community of ours that if you buy or sell on Ebay, you are now considered one of the "untouchables" for some crazy reason! Why this attitude exists is beyond me. I've bought beautiful linen cuts, silks, brand new and used charts, and various stitching supplies via eBay, and plan to continue doing so.

Having a disability, it's very difficult for me to get into my car and drive to a physical location. I often need to reach, kneel, bend over and so forth to browse in a shop, and that is just unbearably painful for me. Online shopping has been a wonderful opportunity for me to find things I'm looking for, and eBay certainly hasn't impeded my shopping at other online shops.

I'm not sure who this distributor is that is giving you such grief, but I think they need to visit the 21st century and forego their antiquated and snooty beliefs regarding eBay transactions.

MJ Hunt said...

I for one am so glad to see samplers sold on Ebay. I live in a community WITH NO shops anywhere around. Perhaps 2-3 hrs away. I've had to rely on Ebay sellers for years and I thank you for it! MJ Hunt

Jeannine520 said...

I actually prefer shopping on Ebay for charts. I think it's much easier to "buy it now" and pay for it in the space of 2 minutes than it is to email a store, ask if chart is in stock, email a credit card number, etc., especially if it's just one or two charts that I need. I don't see what the problem is. Is it a rule just for the sake of making a restrictive rule? For an industry that is always worried about declining sales I really can't believe a distributor could be so shortsighted but you know how it goes, one gets on the band waggon or it leaves town without you, right? The needlework industry needs to wise up. Sorry for your troubles, wish I knew who this distributor was!

Samplings from Spring Creek said...

WOW! I must be missing something--after you make a purchase, can a distributor tell you how to merchandise and sell?

With fewer and fewer brick and mortar shops ordering on line is sometimes the only way.

diamondc said...

O.K. I donot get mad very often but this disturbs me, what is the difference between Ebay at full price or Hoffman or any other distributer, they are contacted on the web the same as Ebay is, my heart goes out to you, I feel that this is a petty thing if this person feels they need to not sell to you for your customers then so be it, however I am sure there will be a solution to this problem.
Some shops use distributers to sell their products how is this different? just asking.
Blessings to you
Catherine

Anonymous said...

The only problem I have with ebay is the fact that the majority of sellers want you to use Pay Pal which is wonderful if you have Pay Pal. So if I can't use a major credit card I can't shop ebay but that doesn't stop me from looking. :+)

Sandra MN

Lisa M said...

Wow. You aren't the only business in this trade to be using ebay though? Personally I don't have a problem with ebay. I miss Theresa's Basket and kit of the month etc from your shop but I understand why you have chosen to change how you operate and best wishes to you :)

Barb said...

Just keep up the good work. If it weren't for online shops like yours many of us would not be able to do our hobby!

Ginger said...

Stick to your guns! You are correct that businesses must change with the times. As for the distributor, perhaps they should ge their head out of the sand before they get swallowed up by another one who understands marketing. I have heard about lots of the issues in the industry and I am simply dumbfounded.

Love your work!

Sharon said...

Well really, how can anyone tell you how to run your business. Keep on doing what you do best.

Entre puntadas e hilos said...

I am from Spain and I can't find a number of designers' products in any local shop here (I live in Madrid, which is a large city). My only resource is Ebay a lot of times, so please keep using it. Thank you.

Lauralee @ The Eclectic Stitcher said...

I, too, live in an area with NO LNS ~ the closest would be at least 2 hours away. The only way I can get the charts/floss/fabric I want is to shop on the internet. What is the difference between having an online store like 1-2-3 Stitch and selling on eBay? Both make it possible for me to continue to stitch the samplers I love. Keep up the good work!

Anonymous said...

As a needlework shop I regret your choice to sell charts at bargain basement prices. I have no problem with full price charts being sold but I checked you e-bay site and there a lot of current designs for less than $3.00 bids. This is another reason why there are so few brick and morter shops left. I carry a lot of the things including your charts but I cannot compete with $1 and 2dollar charts.

Theresa said...

Thanks, I appreciate everybody's comments. To the anonymous shop who wrote, when I clear out charts on eBay, that is no different than when shops do in-store clearances. Those "less than $3" charts are things I bought too many of or can't get rid of at regular price. We all have those, right? I lose money on most of those charts, but the alternative is just letting them gather dust or (gasp!) throwing them away.

A lot of shops offer clearance sales, grab bags, Crazy Days/Sidewalk Sales. When I put a chart up as an auctioned item, what I'm trying to do is get as many pennies for that item as I can...otherwise, it'd just sit here un-loved!

I have never made it my policy to criticize other shops for selling at a discount every day, for offering clearance items/freebies, or really for any other reason. How each shop chooses to do business is up to them. I view cross stitch graphs like fruit -- after a while, they get a little too ripe to sell. Once my customers have seen something, and I've sold as many as I feel I can sell, the rest have to go. Shops can easily get into trouble by hanging onto too much inventory for too long.

But again, that's just the way I see it. - T

Carolyn Boutilier said...

I shop from on line shops most of the time with a few exceptions. I would have to travel 74 miles and with the cost of gas it is not feasible to take my car. I have been glad for your on line shop and others.
Miss your kitty notes and pictures. Because of your love of cats and the stories behind each animal, I went to our local SPCA and have a wonderful adult cat.
Carolyn B

Anonymous said...

I love that you are on ebay -its where I shop a lot for my things ,I have personally purchased from your shop & would buy again anyday.I dont have any shops near me & we only have a craft show here once a year. Im sorry they are doing this to you I think it really sucks!Hang in there..
Debbie in australia.

Anonymous said...

People who whine about business not being "fair" shouldn't be in business. I say keep doing what you're doing and don't let someone else tell you how to run your business unless they want to pay your mortgage and put your kids through college. :)

Stitch Wizard said...
This comment has been removed by the author.
Anonymous said...

I so appreciated the post, Theresa. Information is power, and it's important that customers (who drive the entire industry, even if it seems we do so from a very far, far back seat)understand how the distributor/wholesale/retail scenario plays out in real life. It helps us make purchasing decisions that align with our individual concept of what constitutes a fair and competitive market.

I wonder if those complaining about your eBay sales also profess a love of the free market system? I suspect they do. We love free enterprise, but "only if you do it the way we (who have maintained market control long enough to think we "own" it) want it done...."? The whole concept is so interesting. You can only discount if the item is in your store with the customer on the premises? What about if you move it outdoors to a sidewalk sale, a bazaar??? No where in the law are distributors of X-stitch charts given such a heavy hand to determine legitimate points of sale. Sadly, they can bully successfully if we the consumers remain unmindful of what is happening.

I love X stitch, have spent tens of thousands of $$ on charts, silks, linens, supplies, classes. There is only one turn off to my hobby: the self-interested outcry of designers, distributors, and retailers who see a changing playing field and demand that it be restored to the way it used to be. That's very unlikely, and in the long run, the players unwilling to move with the demands of their customers will be the losers.

I try NOT to buy from any designer who states on the design that absolutely any copying (no problem with the "copying for resale is illegal") is forbidden. I have 60 year old vision, stitch with no glasses and nose almost touching my needlework, and ALWAYS make a working copy (destroyed after use) which is pinned on my project so it's very close to my eyes. To suggest this violates the law is both incorrect and a big turn-off to the stitchers who would never copy to resell or gift a chart. In the end, these warnings make this stitcher ponder if there is stiching allowed in prison as I'm copying something I PURCHASED so that I might be able to see it well enough to stitch, and the warnings do very little to nothing to dissuade the illegal copying for resale/reuse. I support technically creative, effective steps to halt illegal copying, but see an industry that is mainly bemoaning the fact that "times have changed and we don't want to change," will leave us with a stagnant, maybe dying industry.

And, to those designers who ask in writing on the chart that I never sell it again, sometimes specifying eBay...sheesh...how many used books get a second chance at garage sales? Charts are no different, and all the wishes in the world won't change copyright law to make it so. I've never sold a single chart I own, probably never will. Yet, to suggest that to do so is illegal...very offensive to me.

In fairness, I tend to believe that all of us are operating from a good central premise: that we want the needlecraft industry to survive. I think there are no (OK, not many) players of ill intent here -- the real tussle is between fearfully grasping at the old ways that used to offer assurance of continued existence, and reaching out to the new ways that best meet customer needs, and lead to industry growth.

So, using the excuse of having my $$$ do the talking, I have just ordered via eBay, your latest sampler. That beauty would have been a challenge to keep secret!

Anonymous said...

It's no wonder some people (like me) prefer animals to people. When I read about irrational behavior as you described, I realize how much I prefer animals.

Carol

Nancy*Glory Bee said...

I got the same attitude from shop-owners when I decided to sell retail in addition to wholesale back in 2003. They did not like it, but I continued to do so and still do. It is what is keeping me in business. I have a huge number of people buying from me directly because shops were not carrying my designs. I say sell where you like. God Bless America!
Nancy

Shelly said...

Stand your ground Theresa! I understand perfectly your stance on selling slow-moving, gathering dust charts for lower prices. I think most people with any kind of intelligence knows that businesses can't have too much inventory hanging around. I just bought two sampler charts from you at full-price (they're yours!). There are certain ONS's that are selling the same charts for lower prices. Makes me wonder if they receive complaints. As for those designers who state on theIr charts to not re-sell this chart on eBay, sorry! I bought this chart legally, fair and square and if I can't give it away, I will sell it on eBay! Yours too Theresa! So don't change a darn thing!

Carolann Dunaske said...

Dear Theresa, I just received "Sarah Chapple". I purchased her from you on e-bay.I saw this beautiful sampler on your blog. Need I say more! Carolann Dunaske

Diane said...

I order almost exclusively online, largely because there is no LNS within 90 miles of my home. When I travel, I visit stores, but I never spend the amount of money that I do online. There just isn't the variety in the shops, the ability to buy both current and older patterns, or the ability to purchase from harder to find vendors. The industry would lost money if I shopped solely from a LNS even if there was one in my city. Vikki at hand-dyed fibers has also spoken of the problems with the industry, and her threads are shunned by the LNS. Her threads are less expensive, can be custom ordered, and have a greater variety than most of the other lines. I use them frequently. Ultimately, I hate to see the industry clinging to the past. It does nothing but hurt them in the long run.

stitchwork Share said...

The anonymous shop needs to check too what the final sales price is not what current bid is. Most bidders wait until the last minute hoping for a bargain. I can vouch for buying your items (gladly and happily) many times at very close to retail price that started very low. stitchers want not need. Our bids I think send a clear message on what the market really wants. Besides I could happily live out my years just stitching your own design reproduction samplers. so there... if I could just keep the fabric and thread folks from backordering the supplies I'd be all set

Anonymous said...

Be advised, I'm not an Attorney. But here are a few things I've learned that might be useful.

There's an agreement called MAP:
Minimum Advertised Price. This agreement means that an item, any item, cannot be sold for less than what the distributor or Designer sells it for.
The shop owner or internet merchant purchases the right to sell the distributor's item, they don't actually own the item. It get's complicated very quickly.
It's true that LNS have clearance and parking lot sales perhaps moving merchandise below the MAP but someone who is exposed on the internet has to be to be careful about observance of the MAP agreement. If no MAP agreement exists between seller and Distributor/Designer then one should be able to sell at will. As long as the starting bid is equal to the MAP there should be no problem.
Please take into consideration that I don't know all the details and am not in the legal profession.
My wish is that Theresa continues to design historical samplers. Her work is exemplary, her taste is exquisite.