Dealer calls on BHTA for solution to suppliers who ‘undercut retailers’ with direct sales

STOCK IMAGE. Image: Peter Macdiarmid/Getty Images

A mobility dealer based in Hampshire has raised the question of industry bodies such as the BHTA coming up with a solution to combat the perceived problem of manufacturers selling directly to the end-user for cheaper and cutting out their retail network.  

Out & About Independent Living’s director, Deborah McCallum, asked why manufacturers are not able to talk to retailers to find a solution to suit all parties and particularly the end-user.

Ms McCallum said that the dealer recently learned of another manufacturer who has begun selling directly to the consumer on the internet and offering products priced lower than retailers can buy directly from the manufacturer.

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She said: “We fully understand the importance of the internet to the consumer – it allows them to compare and contrast products very easily.

“It obviously allows them to make price comparisons and buy at an advantageous price. However what it doesn’t do is to allow them to try the products before they buy. Nor does it cause them to consider perhaps longer term needs as well as current needs.

“That is the role of the retailer but with low or no margin this will be a short-term offer before retailers will go out of business.”

She said that if manufacturers operate in this way, they could lose retail partners who may decide to delist products and buy other similar brands.

Ms McCallum feels that few products are truly unique and claims that manufacturers do not invest enough money in R&D to launch wholly innovative products.

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13 Comments

  1. Roland said:

    I have spoken with this company before for advice but i first went to BHTA to were helpful and pointed me to them for advice, Deborah is lovely and my mum was happy with advice, but why are they not member of the BHTA? to give input, or why dont you speak to the body you are joined to the Trading Standards buy with confidence people. If change needs to happen then you should support the people who can possibly make change.

    • Alastair Gibbs said:

      Well said Roland,
      A small company can be a member of the BHTA for around £10 per week, far less than an advert in the local paper.
      By being a member they can then attend section meetings and have their say to shape the actions and activity of the organisation. It is often very easy to sit back and expect others to do the work for you, by being a BHTA member not only do you have your equal say, but you also have a code of practice underwritten by the Trading Standards Institute to demonstrate your ability to uphold those standards.
      Ms McCallum would do well to remember that no trade association could possibly interfere with price setting or price manipulation to suit her business as this would be anti competitive and totally illegal.
      Surely it would be better to focus on how the company can demonstrate the added value they offer, as many small dealerships do, to combat internet, no service, poor aftercare, poor advice type outlets.
      By not being a part of it you forfeit your rights to complain about it !!

  2. deborah said:

    Thank you for your comments Roland. I have attended BHTA training courses, which proved to be very instructive and I paid for these as an individual. From a business point of view , we cannot justify the cost of becoming a member – they are not sufficiently pro-active I’m afraid. If this were to change – then of course we would reconsider.
    This pricing situation presents an opportunity for the BHTA to demonstrate its position as the main industry body and bring interested parties to the negotiating table.
    Unfortunately, this issue is not within the remit of the Buy with Confidence scheme.

  3. Roland said:

    Hi Deborah, how can the BHTA help the article does not mention who the “manufacturers” in question are, feels like an open ended statement/article, I’m sure they have the right to sell direct if they want to? and all the better if the cost savings are fed back to the customer. Pricing strategy is a normal business day to day if you don’t keep up surely this will affect your business just like any other on the high street.

    you cannot judge an organisation simply by the fact you are not paying to be a member yourself i have contacted them plenty times for my mum and the products she needs to keep her independent and each time they have been more than happy to help even with hard to source/bespoke items. They are certainly fair in this approach as i have been in touch with your company before because of the fact BHTA pointed me to you..and you were not even their member.. we just told them we live in Cheriton and they found us the nearest company able to help so they are certainly independent in their views and not always aligned to their own membership base, also the fact the have 500 members says it all really.. as they say better to be in then out right? not wishing to debate with you but i just think companies need to be more proactive themselves and not rely on others just like any business in any other industry sector otherwise you may alienate your business to your suppliers

    Kindest regards

  4. Jack Marlow said:

    It seems Deborah is asking a Trade Association to bring retailers and manufacturers together to price fix, which would completely be against CMA rules! If a retailer is unhappy with the practices of a supplier, such as one that has taken the decision to go directly to the consumer, then it is up to them to negotiate with that supplier and ultimately, they can stop selling their products if they don’t like their practices. To call on an Association to handle these negotiations seems silly and maybe they should look at becoming part of a buying group instead.

  5. deborah said:

    Roland, we always strive to offer “value for money”, as we state on our website. I think perhaps my point is unclear. Some manufacturers are more than happy to sell directly to consumers at prices lower than they sell to retailers. That is their prerogative – in a free market. However, they are not set up to repair, service or maintain their equipment – they are more than happy for retailers to do that! Neither do they, in the main, have their own showrooms where consumers can try products – again, they are more than happy for retailers to fulfil that role . Without providing either of these services, of course they are able to sell more cheaply to consumers – and it is no surprise is it? But should they be doing so, if they want, as most of them say they want, to build up a network of retail “partners”?
    I am not being critical of BHTA. BHTA may choose to respond to this issue or they may not – it is for them to decide. However, as I said before, they are well-positioned within this market to do so , should they wish.
    Finally, I don’t think it is necessary in this article to “name and shame” . After all, they know who they are!

    • Tony said:

      Deborah,
      Your point on aftersales service and attention is better made than you might think. I believe the BHTA Code of Practice specifically prohibits the sales of equipment out of a sellers ‘home area’ that cannot be properly and timely repaired or serviced the same as within the sellers ‘home area’. The seller is also to provide a proper assessment before the sale is made. On that basis there are few BHTA reg. manufacturers that should be selling direct!

  6. Roland said:

    Hi Deborah, thanks for explaining i think you are missing the point, you should be speaking to them in that case and not sending a message directed to them via AMP or its newsletter ..this has been posted as a news item… this is not news…this is your view being posted, more like a Blog. I think AMP are making you and your business look bad to be honest. As you say those manufacturers know who they are.. if they are reading this article and they are your suppliers they will soon reconsider their relationship with you leaving you with a problem, supply and demand – they are the manufacturer and without their products the retail element does not exist, as you would have no stock to retail. In normal cases if i need my scooter fixed and its out of warranty with the manufacturer i would seek to get it fixed via a retailer..if they can help = retailer getting my money

    i agree that the manufacturer should make their selling function i.e. internet sale robust by asking for an assessment, i know that all BHTA members who retail are advised to do so under the Code of Practice which they sign up to abide by it is not simply they pay a fee to join i use to think that but then checked their website in more detail, so these members commit to being better than the competitor by following these standards. I have personally been stung by a shoddy retailer out of almost £2000+ my fault really then i googled and learnt that there is a body with reputable companies i should have used to safeguard myself, they even mediate in complaints which could have meant i get my money back. you live and you learn but i am much wiser than i was about this marketplace and since have purchased a dozen products via BHTA members just to be safe as my mum needs assistance with her independence to date we have not had any further issues. I hope you get the result you seek myself and my mum have spoken to you before and you are lovely and helpful and so is your company and your not far from us so we wish you the best

  7. Gordon said:

    Many years ago I worked for a business who did just what Deborah is complaining about (not in this industry). It eventually backfired because our wholesaler decided not to deal with us. The comment was that you ‘cannot run with the fox and the hounds’. It hopefully taught us a lesson. My advice to Deborah is to try and sort it out with her supplier and if she can’t just to stop dealing with them and find some other supplier….. I sympathise with her predicament – however don’t let it hold you back!

  8. Anthony J Wellings said:

    Could anyone who is a dealer on this forum with there years of experience,Tell me what is reasonable profit from selling a mid sized scooter from a shop ??????As a percentage please.
    You look on the likes of E-bay and there are dealers selling scooters at 30.00 over trade price,Which the importer does not mind because they are box movers,with no back up for the customer,but plenty sales.
    The shops just suffer with massive losses and cannot compete.

  9. Jeanette Warner said:

    Hello Deborah,
    I hear your frustration in your interview with AMP. I am the Chairman of the Mobility section of the BHTA, and I have personally been working very hard to bring more discussion and open honest talk between manufacturers and retailers in my section. This is an issue that has not been brought up by any of our members, however I will bring it up to see if there are concerns within our membership group. If there are, then I guarantee I will open a flow of discussion to come up with the most satisfying conclusion possible.
    As others have suggested here, it would be most helpful if you became a member yourself, which I am sure you would find useful and helpful, especially in situations like this.
    As has also been mentioned here, we all must operate within the laws of the CMA, which, in an industry such as ours, where much time and effort is put into giving our customers exceptional service and attention, can make it very difficult to compete with those who don’t.
    As you haven’t mentioned manufacturers in your interview, I am unable to ascertain if they are BHTA members or not. If they are, then you are encouraged to contact the BHTA to ask any questions, or raise a concern about selling behaviour, whether you are a BHTA member or not.
    The more companies with the same good ethos represented by the BHTA code of conduct join us, the more pro active we will be able to be. Our members believe that it’s not just a case of what the BHTA can do for them, but what they can do for each other, for the BHTA and the industry as a whole.
    Regards
    J Warner

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