Trade thoughts: Does a manufacturer selling directly to consumers affect your willingness to work with them?
Not a new model, manufacturers operating direct to customer propositions have long been a point of contention among the trade. In this month’s trade thoughts, five leading mobility retailers share their views on suppliers selling direct and whether this has a bearing on their desire to work with them or not.
All thoughts were submitted to THIIS in August 2020…
Darren Macey, Managing Director of Lifestyle and Mobility
“It is extremely important that if a manufacturer does operate a direct to consumer model, they make it very clear to their dealers.
“It’s not professional for dealers to find out through end-users or through the rumour mill. The only way that a direct to customer model works is if the supplier is very upfront about the relationship.
“Two great examples of who do this well are TGA Mobility and Motion Healthcare – they either sell direct or have an association with a company that sells direct but they are very clear about how this works from the start.
“They both only want to work with certain dealers and we have exclusivity deals in place for certain locations. For us, this works well as it means our local competitors can’t stock these products which gives us an edge.
“Also, when they or their associates do sell direct, they hold a high RRP which allows retailers to give a better deal to their customers or retain a higher profit margin.
“Again though, this only works if the dealers know about the relationship beforehand.”
Mike Williams, Managing Director of Ableworld
“The only reason a supplier should supply directly is if there isn’t a nationwide supply of professional retailers.
“Recently, a few chains have grown around the country so I find it incredible that any credible supplier would abandon their customers and start up DTC distribution. If one of our suppliers introduced this now, we would certainly have an issue and, if possible, find alternative supply.
“When we launched, there weren’t the retailers to serve the country and you already had established manufacturers dealing direct or having a “sister” company being your competition (certainly in the stairlift industry).
“Hopefully, in time, this will fade out as the retailers become stronger and suppliers have larger regional or national choice of retailers.
“If manufacturers already have a website or a “sister” company, I suggest they should only sell at an established retail price and not undercut their customers.
“In my last industry – DIY – the manufacturers closed their direct to public operations as the retailers grew. The last one I remember was Black and Decker who closed their retail stores after pressure from retailers.”
Alastair Gibbs, Managing Director of TPG DisableAids
“A number of my suppliers do also sell direct to customers but it is done in such a way that the customers effectively make that choice to either buy local or to buy from a national.
“There is often a perception that the manufacturer is the only one that knows their product inside out and, therefore, that is the right place to buy what you need.
“As a retailer, I would argue that our staff have an equally good and in-depth knowledge of not only that product but also comparative products and complementary products.
“We can enhance the value of the product by giving true local service and providing the additional products that are often required to give a workable daily living solution.
“As long as the ground rules are clear, I have no issue in competing with the manufacturer direct and that would not deter me from stocking their products. In truth, we are both offering the same solution to the customer but giving them choices in how it is acquired.”
Karen Sheppard, Managing Director of People First Mobility
“The answer, in short, is yes! From past experience, suppliers tend to sell products cheaper to end users than the retailer can which makes it harder for the retailer to do a good deal with their own local customer.
“DTC suppliers also tend to have less time for retailers as support is aimed more at the end user. In my experience, the DTC companies don’t seem to have the same support between the reps and retailers as the trade-exclusive suppliers.
“If a manufacturer chooses to go DTC and forgets the high street retailer, then this is limiting the supplier’s sales in many ways. Retailers will be competing on price which will devalue the product.
“Also, customers come in store for a certain make or model but see a different one in showrooms and choose that because they like to have choices and options.
“DTC suppliers risk losing brand loyalty by going direct as well. If a customer falls out with a DTC supplier, where do they go? Probably to a different brand. If a customer doesn’t like a certain retailer, however, they can still remain loyal to the brand of the product by just going to a different retailer.”
David Morgan, Managing Director of Snowdrop Independent Living
“Snowdrop Independent Living opened its first showroom in 1999, over the years we developed a loyal customer base. At the beginning of 2020 in the face of new challenges we decided to develop our digital marketing strategy and an e-commerce website in order to satisfy the changing needs of our customers.
“We are aware that many manufacturers now sell directly to the end-users via online channels. We believe that communicating the correct message to the right people is key to online selling, but it takes time to fine tune the tone and the voice.
“Fortunately, we have a fantastic team who work hard to understand our customers. We serve a rapidly changing market and a healthy level of competition will only benefit the end-users.”https://thiis.co.uk/trade-thoughts-does-a-manufacturer-selling-directly-to-consumers-affect-your-willingness-to-work-with-them/https://i2.wp.com/thiis.co.uk/wp-content/uploads/2020/05/Refund-cancellation-CMA.jpg?fit=900%2C600&ssl=1https://i2.wp.com/thiis.co.uk/wp-content/uploads/2020/05/Refund-cancellation-CMA.jpg?resize=150%2C150&ssl=1Analysis & InsightsNewsroomTrade ThoughtsAbleworld,D2C,direct-to-consumer,DTC,lifestyle and mobility,Mobility Industry,mobility retailers,mobility sector,mobility shops,mobility supplier,People First Mobility,Snowdrop Independent Living,TPG DisableAids,trade thoughtsNot a new model, manufacturers operating direct to customer propositions have long been a point of contention among the trade. In this month’s trade thoughts, five leading mobility retailers share their views on suppliers selling direct and whether this has a bearing on their desire to work with them...Sarah SarsbySarah Sarsbysarah@thiis.co.ukAdministratorTHIIS Magazine