What Would You Do?

[GLBTcity]

Hi Everyone,

Hope you have time to read, this one is going to take a while but I'll try to skip all the BS in between.

About Us:

1. We sell videos/dvd's (multiple studios), sex toys, erotic art, pride jewelry and erotic chocolates.

2. We price shop the competition on movies.

3. We're a free site to browse.

4. We're small potatoes compared to most adult websites and haven't done any advertising (Google/Overture) over the last 4 years until this year. Just basic SE submissions and SEO (on our own, not contracted out).

Situation:

1. We watched a company (no names mentioned) make a BIG push into the gay market and doing advertising with Overture and Google.

2. We priced shopped them only to discover that they were giving away the farm on ALL studios.

EXAMPLE:
We were selling one particular studio for $46.95 that listed for $59.99 retail. Other competitors were selling them anywere from $47.88 up to $59.99.

This company is selling the same studio for $39.95. Plus, they give customers a free compilation video if they buy any 3 movies.

3. We noticed our sales drop significantly on this one particular studio (and so did the studio notice). We've been one of their largest resellers.

4. We priced matched this new company on this one particular studio to see if indeed this was part of the reason for a drop in sales.

5. BINGO!!! Our sales are back up and many of our regular customers are ordering from us again on this studio.

Okay, we all know that customer service is an important topic. I've been in CS for over 30 years, trust me I know how important good CS is to a customer.

HOWEVER, agree with me or not, it's my experience that buyers of porn, are continually shopping prices and provided a site looks trustworthy enough, if they find a better price, they're going to buy elsewhere.

Okay, with that said...

Next Situation:

We started price matching them across the board on all studios. In some cases however, when their prices were all over the board on a particular studio, we elected to take the "middle of the road".

Example:
If they were from $29.95 to $36.95 on a studio, we just went $34.95. (this seemed to work pretty well we discovered and our sales were up across the board again)

Now comes the twist...

1. Two (2) studios contacted me about our new pricing.
2. Both studios contacted me on the same day.

Now I didn't just "fall off the turnip truck" or "was born yesterday". It's obvious we get shopped too by our competitors and someone was complaining about our prices.

My first thought... we're small potatoes... why isn't this person shopping a little more thoroughly? If so, they would discover this other site just as we did. IMO, it's someone that's knows us or we have done business with in the past. In any case, that's besides the point.

FACT:

a) I know we were the first to bring this new company pricing to the attention of the one particular studio I mentioned in the first part of this post.

b) I know we were the first to bring this new company pricing to the attention of the distributors we buy other studios product from.

c) I know we were the first to bring this new company pricing to the attention of Colt and numerous other studios.

d) I DID NOT bring this new company pricing to the attention of the two (2) studios that contacted me about our pricing. I did when they contacted me.

Okay, with all of that said, I know that all products have their basic set value. That's obvious when you go shopping even at Wal-Mart. They're generally not $10, $20 or more $$$ less expensive on name brand products.

Studios don't like seeing one of their movies, expecially new releases that retails for $60 selling at $39.95.

AGAIN... we're small potatoes compared to other adult reseller sites. If we lose 50 sales in a given month, we're going to notice it and question why. And then do our best to get the business back.

I welcome any feedback on this matter.

PapaBear

[Lee]

Just my 2 cents but, as long as you are paying the studio what they are asking you to pay 'per video' they really have no say whatsoever in how much YOU sell the movies for.

You have honored your part of the supplier / sales contract by purchasing your stock from them, thats where the business relation ends.

They cant tell you how much to sell a movie for just as you cant tell them how much to sell a movie for.

Unless of course, it is in the sales agreements.

Regards,

Lee

[GLBTcity]

.

They cant tell you how much to sell a movie for just as you cant tell them how much to sell a movie for.
Regards,

Lee

That's true Lee. However, when I went through this one time before with a totally different studio, they came right out and told me:

"If you don't change your pricing, we won't sell to you anymore".

That is their option. Of course, I suppose I could go to one their distributors to buy their stuff. But still it's the idea of "price fixing" by the studios, but then someone has to single us out. It's obvious to me (if my thinking is correct) that the person and/or company that complained about our prices is someone that watches us closely. I can think of 4 sites/people in particular and I'm sure 2 of these people would love to see us simply "go away".

Thanks for the positive feedback Lee. I personally agree with you 100%.

PapaBear

[Lee]

So drop them.

It really is as simple as that

If you are making them money right now and they dont want to keep making money especially now they have given you an ultimatum, turn around and tell them you dont want to carry their movies.

Perhaps they will learn a valuable business lesson from all this

I know if a content provider ever turned around to me and told me i had to charge $X for access to a paysite that used their content in it, id not only stop doing business with them but id make sure everyone else knew about it AND do a chargeback for the un-usable content

Regards,

Lee

[nicedreams]

They cant tell you how much to sell a movie for just as you cant tell them how much to sell a movie for.

Lee

True they can't tell you how much to sell it for, that's called price fixing. They can however tell you the minimum amount you can advertise at. That's called MAP or minimum advertise pricing. And is standard practice in most other businesses.

I would follow through with the studios to see if they have a MAP policy or would be willing to implement one to keep their pricing up.

Jim

[citiboyz]

I agree with Lee. This is a competitive marketplace, and you need to be free to set your own pricing. The studios shouldn't be telling you how to run your business any more than you should tell them how to run theirs.

[Squirt]

It sounds like you noticed a significant loss in profit when the other company outpriced you on these studios. You said that you're small potatoes so just dropping them wouldn't teach the studios anything and would cause you hardship.

NiceDreams is right regarding MAP.

You might want to clarify with the studios if all distributors have the same price guidelines as you. If everyone follows the same rules their's no problem. It is possible that different distributors have different agreements based on volume.

Depending on your contract a solution would be a buy 2 and get one free special, a 2 for 1 offer, a free shipping & handling offer with selected studios/titles, a 20% discount coupon with selected studios/titles. These are just a few options that will keep you competative while staying within the guidelines you were given. You can sell the product for less as long as the advertised price is within their guidelines.

I hope this helps :high:

[Squirt]

Damn I hate making stupid spelling errors early in the morning and not being able to change them quickly enough! :goof:

[gaybucks_chip]

As an owner of company who wholesales videos we produce, I'm torn. On the one hand, we want our distributors and retailers to make good money with us and be successful. On the other hand, if we have a retailer that wants to take a ton of videos in exchange for a better price, it's hard for us to turn that down.

Generally, we try to strike a balance. We don't have a formal MAP policy, but we encourage any of the retailers we work directly with to price our products at a fair value so that everyone can make some money, and the customer gets a fair deal as well. We're also all about cultivating a good relationship with our retailers and distributors, so we try to listen and make decisions that will benefit everyone. Perhaps having a conversation along those lines with the studio(s) in question might help.

[GLBTcity]

It sounds like you noticed a significant loss in profit when the other company outpriced you on these studios. You said that you're small potatoes so just dropping them wouldn't teach the studios anything and would cause you hardship.

Depending on your contract a solution would be a buy 2 and get one free special, a 2 for 1 offer, a free shipping & handling offer with selected studios/titles, a 20% discount coupon with selected studios/titles. These are just a few options that will keep you competative while staying within the guidelines you were given. You can sell the product for less as long as the advertised price is within their guidelines.

I hope this helps :high:

Right Squirt, dropping them isn't something we want to do. But....

Thanks for some great feedback!

[GLBTcity]

True they can't tell you how much to sell it for, that's called price fixing. They can however tell you the minimum amount you can advertise at. That's called MAP or minimum advertise pricing. And is standard practice in most other businesses.

I would follow through with the studios to see if they have a MAP policy or would be willing to implement one to keep their pricing up.

Jim

No studio, no distributor has told me I HAD to sell within a specified margin. One of our distributor reps will tell me what a title will "generally" be selling for and I should try to work within $x and $x. But he also told me straight out that he couldn't tell me what to sell it for. Simply, my cost is $x, and it's up to you what you want to make on it.

Thanks Jim!

[GLBTcity]

The one particular studio I mentioned in the very beginning that we sold for $46.95 and they selll for $39.95... well.... that studio has NEVER even said a word about our marking them down to $39.95. Not one word.... we buy on average of $4000/month from them. Whether that has anything to do with it or not, I don't know. But the fact remains, they haven't said anything about our new prices. The 2 studios I've heard from we barely buy $1000/month from each (30-35 vids/dvds). That's what doesn't make sense to me!!!

[basschick]

i have a question.

is it legal for a studio to have different minimum advertised prices for different sellers? i was under the impression that - at least at some point in our history - you had to have one minimum price that applied to everyone. perhaps that is no longer true, but is there a way to find out?

it seems very stupid of those studios to try and force you to sell their product for a higher price than those other guys. it seems foolish for them to allow those other guys to sell the videos that low, too.

but as far as trying to FORCE you to sell at a higher price than those other guys - thereby lowering your sales radically? i'd be talking to my lawyer, and if my lawyer didn't specialize in that area of law, i'd be finding one who did. after all, you're in business to make a profit, and they are making that impossible if they allow one reseller a lower minimum price than another.