Sign in to follow this  
Followers 0
TimS

Ouch - Penn gives Merrick Tackle the boot

Rate this topic

26 posts in this topic

Wow, this could be a good case study for my MBA classes! A company looking to restrict/decrease market share is a very rare animal. My guess is that Penn is trying to protect the brick and mortar establishments that got them to where they are. But, you gotta change with the times if your gonna make it out there. Sounds like a policy that needs to be revisited by Mr.Nelson.

 

jk

 

On second thought, Penn is trying to control the selling price of their product by reducing competition. Solely web based operations generally incur lower operating costs, so they are more likely to offer their products at bargain prices (relatively speaking). I also assume that their contract requires their product to be sold at "manufacturers suggested retail price". But, I get the feeling that demand for the product is not as high as it once was since there are now many quality fairly priced alternatives to Penn. So Penn might want to revisit their policies before they achieve significant declines in market share.

 

[ 09-30-2004, 02:23 PM: Message edited by: JimK ]

Share this post


Link to post
Share on other sites
Supposedly they broke a contractual agreement! I guess their wrong and deserve to be ousted!

 

Bobby, no question about it, if they signed a contract and later ignored the terms of that contract, they deserve to be booted. My question is more along the lines of is Penn making the right decisions in their choice of not dealing with web based retailers? And furthermore, should Penn be able to decide if other businesses like Merrick Tackle can sell to web based businesses?

 

TimS

Share this post


Link to post
Share on other sites

I'm a black and white kinda guy, especially when it comes to business. If they broke the agreement, then they broke the agreement and they get what's comming to them. I represent insurance companies, and if I break the contract, they terminate me. It's that simple. Sure, it would be nice to get a warning, slight slap on the wrist, but they would be withen their rights to drop the hammer just the same.

 

Tim, I'm not sure if your problem is the fact they got booted, or that Penn is taking a possition that, at immediate glance, favors brick and mortar stores over net based.

 

Is Merrick a reglar brick and mortar?

Share this post


Link to post
Share on other sites

Penn like anyother company can do as it pleases. It can sell to whom it wishes. And if its cusomters sell to those they do not want them to then its thier right to not sell to that vendor. Is it a good business decision? I dont know, I ahvent seent thier numbers. But it seems to me maybe we dont have the whole story? I heard some rumbles about this in the spring from another online retailer so its not like this happened over night.......

Share this post


Link to post
Share on other sites

Tim from what I heard this was a reel sold to someone and they were in effect "setup" on this...Merrick is a great company to deal with and I'm pretty confident that they didn't purposely sell that reel. They sent a letter out to everyone last June or July, you didn't get a copy?

Share this post


Link to post
Share on other sites
Tim, I'm not sure if your problem is the fact they got booted, or that Penn is taking a possition that, at immediate glance, favors brick and mortar stores over net based.

 

KoQ, I don't have any problem with what happened, I was simply reporting something and asking a question - is Penn cutting off their nose to spite their face? smile.gif

 

I'm 100% behind Penn being able to do whatever they want with their stuff - and 100% behind their right to enforce their contract. I was just asking, do you think it's a good business move to cut out online retailers in this day and age? I only sell a few Penn reels...and yah know what? The ones I have in stock I will sell online. Yah know why? Cause I paid for them and I have no such agreement with either Penn or the distributor I purchased them through...or I never woulda bought the reels smile.gif

 

So if anyone's looking online for a Penn 975 or 525Mag or Slammer...I got 'em right here HappyWave.gif And until my distributors stop sending me them when I order them, I'll keep right on having them right here. So it doesn't affect me at all right this minute...nor will I lament the time when I can no longer buy them for resale...they aren't very good sellers anyway smile.gif

 

****, I get lots of stuff from Merrick, probably got the notice you refer to, but as stated above, I was just asking a question, not faulting Merrick or Penn smile.gif

 

TimS

Share this post


Link to post
Share on other sites
The ones I have in stock I will sell online. Yah know why? Cause I paid for them and I have no such agreement with either Penn or the distributor I purchased them through...or I never woulda bought the reels smile.gif

TimS

 

So technically the company you bought the reels from was not supposed to sell them to you? How is this type of thing generally controlled - by signed agreements all the way to the end user? Seems kinda silly to me, but then again I'm no business guru.

 

The Penn memo refers to "Gold Label" product & "Authorized Gold Label Dealer". Can someone clarify what these are?

Share this post


Link to post
Share on other sites
Penn-Trash.jpg

 

Ouch icon25.gif

 

Here's the whole story: Merrick unhappy with Penn's policy

 

Is Penn cutting off their nose to spite their face or what? icon25.gif

 

TimS

 

It was the "or what" portion of the post that lead me to believe you had a problem with it. It's been my experience that any time someone has used that phrase or verbage it was to give indication that they'd taken a side or had a preference rather than just making a statment or seeking an opinion.

 

Wanna make a deal on the 975? biggrin.gif

Share this post


Link to post
Share on other sites
The Penn memo refers to "Gold Label" product & "Authorized Gold Label Dealer". Can someone clarify what these are?

 

Vinny: I'm not sure how Penn specifically sets up their dealer network, but I know many tackle manufacturers will offer "Level" discounts on their products. Say Iyou order 5-10 reels, you might be on the lowest level and would pay the highest wholesale price per reel. Increase your quantity and add a few more products and you may get "bronze" level (lower) pricing or discounts. Add still more products and/or larger quantities and you may qualify for "silver" level pricing. Order an entire product line at whatever quantities required, and they give you "gold" level pricing.

Share this post


Link to post
Share on other sites

As an interesting parallel, Shimano's bicycle components side of their business decided to almost go the same route two years ago. Shimano's bicycle components harbor a significant market share and are arguably one of two choices for those who ride road bicycles. As many online retailers sold large quantities of components at significant retail discounts, Shimano responded and created an authorized online distribution channel. These are the only Shimano online retailers of their bicycle components. There are probably less than 6 in the US(someone correct me here). Consequently, Shimano has been able to firm up their retail prices and "weed out" distributors that sold to online companies. This was done prior to a significant roll out of next generation componentry. With the online retailers significantly cut out the business, Shimano has been able to maintain price levels of both the next generation componentry and the older components. This likely would not have happened had online retailers been able to continue to buy from Shimano distributors and offer consumers the same products at better prices.

 

As an observation, brick and mortar bike retailers have fewer online retailers competing for their business. Consumer have fewer options and competition to lower the market clearing price. Shimano? Don't know if their wallets are fatter or not... but their pricing power has definately benefited by better controlling distribution in the U.S.

 

Don't know what if any controls Shimano may have in place regarding their fishing products.

 

Just a parallel to the issue presented here.

Share this post


Link to post
Share on other sites
It was the "or what" portion of the post that lead me to believe you had a problem with it. It's been my experience that any time someone has used that phrase or verbage it was to give indication that they'd taken a side or had a preference rather than just making a statment or seeking an opinion.

 

Wanna make a deal on the 975? biggrin.gif

 

Fair enough, I can see that...and yes, I do think they made a mistake by not allowing distributors to sell to online retailers. In today's competitive fishing reel market, I think it's a mistake for any reel company to not use the internet to retail their products. I don't think they are wrong for enforcing their contract and don't think they are wrong for tossing Merrick for breaking their contract - I think they are cutting off their nose to spite their face by having such a brick-n-mortar only policy smile.gif

 

And it has nothing to do with the online store here, like I said, I could care less if I ever got another Penn product to sell smile.gif

 

As to the 975...I already sell them for $32 less than Cabelas icon25.gif What kinda deal you lookin' for? cwm13.gifwink.gif

 

TimS

Share this post


Link to post
Share on other sites

Create an account or sign in to comment

You need to register here in order to participate.

Create an account

Sign up for a new account in our community. It's easy!


Register a new account

Sign in

Already have an account? Sign in here.


Sign In Now
Sign in to follow this  
Followers 0

  • Recently Browsing   0 members

    No registered users viewing this page.