Home Forums Find the help you need Supplier closed my account after the store moved

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  • #999876
    DrGear
    Member
    • Total posts: 31

    I had an account with a major supplier since the business opened in 2017. I was obtaining certain parts and accessories from the 2 major brands they sell. These products are found in every music store and repair shop out there, it would be like going to a cafe that didn’t have coke.

    When we expanded and moved to a new location, there was another shop in the area. This distributor is known for selling products to everyone, pretty open. I placed an order with them for some parts and accessories as I usually would only to get a letter back saying my account had been closed as they ‘have enough dealer coverage in the area’.

    Does anyone know where I may be able to contest this as their only response has been to literally berate me when I tried speaking to them. It’s not like we’re talking about major line products or full dealership items, just regular old accessories and parts that you find in every music store across the country.

    Not having access to them has kind of knee capped me as there are no comparable products out there due to sheer brand recognition and them having approximately 85% market share across their categories.

    #1221703
    Paul – FS Concierge
    Moderator
    • Total posts: 3,117

    Tough situation – I hope you get it resolved.

    You might need to think of some out of left field strategies in the meantime such as buying at retail from an overseas online supplier to keep yourself in the game.

    #1221704
    DrGear
    Member
    • Total posts: 31
    Paul – FS Concierge, post: 267805, member: 78928 wrote:
    Tough situation – I hope you get it resolved.

    You might need to think of some out of left field strategies in the meantime such as buying at retail from an overseas online supplier to keep yourself in the game.

    Already have been, however with the weak AUD and import costs now that everyone is doing the GST part, I’d be selling them at over RRP and making a slight loss on each unit.

    Most other products I can get easily enough via contacts I have in the US, but these parts and accessories are geolocked by suppliers in other countries. Not allowed to ship them internationally and whatnot.

    #1221705
    Dave – FS Concierge
    Moderator
    • Total posts: 2,523

    How could you make it worth their while to sell to you again?

    #1221706
    DrGear
    Member
    • Total posts: 31

    Well first of all, compared to the other two shops in the area, I actually open my doors on time and treat customers well. So I move through stock they don’t.

    Here’s the real kicker; yesterday I got told another of my accounts was being closed because the music store across the road doesn’t like the competition. So now I have no alternative suppliers to obtain budget instruments which accounts for over 30% of our sales.

    By most peoples understanding this could be considered anti competitive and it unfortunately means that as a business, I no longer remain viable. I basically become the pub with no beer.

    #1221707
    businesstrade
    Participant
    • Total posts: 210
    DrGear, post: 267838, member: 102825 wrote:
    Well first of all, compared to the other two shops in the area, I actually open my doors on time and treat customers well. So I move through stock they don’t.

    Here’s the real kicker; yesterday I got told another of my accounts was being closed because the music store across the road doesn’t like the competition. So now I have no alternative suppliers to obtain budget instruments which accounts for over 30% of our sales.

    By most peoples understanding this could be considered anti competitive and it unfortunately means that as a business, I no longer remain viable. I basically become the pub with no beer.

    Can you import them direct from China?

    Why did they stop selling to you? It seems counter intuitive that they’d opt to lose money no reason.

    #1221708
    DrGear
    Member
    • Total posts: 31
    BusinessTrade, post: 267841, member: 113709 wrote:
    Can you import them direct from China?

    Why did they stop selling to you? It seems counter intuitive that they’d opt to lose money no reason.

    I know right? When I opened the shop after 2 years in the repair side of the industry, I didn’t receive a single rep call or anyone try to sell their products to me. I had to keep chasing reps to get them to sell stuff to me.

    The industry is shrinking, old school players who never embraced ecommerce or modern business practices rely on their pre existing relationships with suppliers to protect them.

    In their eyes, the threat of losing an existing account to a new one isn’t worth the risk. Both retailers did that to the suppliers to get them to stop selling products to me. Products I already had access to. Products I was already selling.

    So yeah, the music instrument industry is extremely political, old school and headed for some kind of collapse when new blood can’t enter the market.

    #1221709
    bb1
    Participant
    • Total posts: 4,472

    Just reading through the thread, you should have contacted the supplier before you moved to make sure they still wanted to deal with you in the new area, often suppliers will only have a single distributor in an area.

    No point just saying it’s the other business’s fault pushing the supplier into it, and opening on time makes no difference, the supplier wouldn’t know that. Maybe the other stores move more of their product, or give them better returns, a supplier wouldn’t cut one business out if they didnt see an advantage with sticking to another.

    #1221710
    DrGear
    Member
    • Total posts: 31
    bb1, post: 267851, member: 53375 wrote:
    Just reading through the thread, you should have contacted the supplier before you moved to make sure they still wanted to deal with you in the new area, often suppliers will only have a single distributor in an area.

    No point just saying it’s the other business’s fault pushing the supplier into it, and opening on time makes no difference, the supplier wouldn’t know that. Maybe the other stores move more of their product, or give them better returns, a supplier wouldn’t cut one business out if they didnt see an advantage with sticking to another.

    They knew we were moving here. We actually were already stocking products when we moved. It was only after the other business complained about having competition we were cut.

    In the music retail industry, there are few suppliers. In the area we operate there used to be 3 music stores. One closed up, we moved in long after they went. In other areas of the country there are as many as 5 stores in a small radius of each other that sell the same products from the same suppliers.

    There’s also a lot of politics in the industry. People who have been around so long they’re all mates. I actually know we sell more product than they do, that’s what’s real messed up about it.

    After speaking with ACCC and the Small Business Commissioner, there’s a string indication that what’s happened could be considered anti competitive as the distributors have such huge market power and there are no alternative suppliers for these product categories. Having already been sold the products previously and having our access to those lines pulled at the explicit request of other retailers because of their desire not to have competition, that’s not even a grey areas anymore.

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