Distributor issue

JackSparrow4

I've a distributor issue and would like some advice/guidance on this.

Over the past year I've built up a successful business involving a product that I buy directly from a distributor here in Ireland. The distributor has now bought my largest competitor and now won't supply the product to me anymore and is going after the business that I built up.

I've invested heavily in this not just in stock but also to build the brand and awareness of this product. As a result I've grown the market substantially and now I can't source the product elsewhere. I don't have any contract or agreements drawn up.

Would this be considered anti-competitive and is there anything I could do about it?

GerardKeating

JackSparrow4 wrote: »

I've a distributor issue and would like some advice/guidance on this.

Over the past year I've built up a successful business involving a product that I buy directly from a distributor here in Ireland. The distributor has now bought my largest competitor and now won't supply the product to me anymore and is going after the business that I built up.

I've invested heavily in this not just in stock but also to build the brand and awareness of this product. As a result I've grown the market substantially and now I can't source the product elsewhere. I don't have any contract or agreements drawn up.

Would this be considered anti-competitive and is there anything I could do about it?

Is the product made in the EU?

jimmii

Yuck that sounds horrible. How much of the market are they going to own? Unless they control quite a substantial market and are likely to be able to dictate the price then I think anti-competition is very unlikely. Is there nothing even remotely close that you could import? Can you try go see them in person put a face to your business and hope someone there has a heart!

EDIT:

Worth having a read here just in case. Do you think that it could damage the economic interests of society?

link to the EU anti-trust legislation page.

JackSparrow4

Thanks for the replies.

Is the product made in the EU?

No it's made in China by a UK based company.

How much of the market are they going to own?

The majority of it unless I source another product elsewhere.

Is there nothing even remotely close that you could import?

Yes there is but not of the same quality.

Can you try go see them in person put a face to your business and hope someone there has a heart!

That's all I can do

Any point talking to the manufacturer or would I be wasting my time? Doing decent numbers for the market.

jimmii

JackSparrow4 wrote: »

Any point talking to the manufacturer or would I be wasting my time? Doing decent numbers for the market.

I guess seeing as the relationship with the distributor has already broken down there's not really any harm not like things can get worse! I doubt it will come to much though. I think you are just going to have to search for an alternative have you thought about going direct to a Chinese factory and skip the middle man that way you will have more control over the quality presumably you would have to buy much bigger numbers.

JackSparrow4

I think you are just going to have to search for an alternative have you thought about going direct to a Chinese factory and skip the middle man that way you will have more control over the quality presumably you would have to buy much bigger numbers.

That's what I am looking at now. Have some samples on the way over at the moment. Always risky buying from China so need to make sure the product is good. Thanks for your advice.

Note to self: Get a distribution agreement the next time

jimmii

JackSparrow4 wrote: »

That's what I am looking at now. Have some samples on the way over at the moment. Always risky buying from China so need to make sure the product is good. Thanks for your advice.

Note to self: Get a distribution agreement the next time

Yeh with China its very mixed but if you need quality they can make quality people think its only cheap stuff that comes from there but in reality its everything! I have some limited dealings with factories in India & Brazil too its worth looking there too.

JackSparrow4

I have some limited dealings with factories in India & Brazil too its worth looking there too.

Thanks. I will!

p.s I like your website. Hope it's going well.

jimmii

JackSparrow4 wrote: »

Thanks. I will!

p.s I like your website. Hope it's going well.

Thanks how did you manage to find it! Its going really well lately we've put a lot into AdWords and SEO its made a big difference for us. We depend solely on one distributor for our main product (not hard to work out what it is lol!) they could probably do what you have had happen to you if they wanted fingers crossed they never want to!

JackSparrow4

It's your profile home page. Sorry I'm nosey Glad to hear it's going. SEO takes time but well worth it in the long run.

DoYouEvenLift

Is it an expensive and difficult product to make and is there only one manufacturer of it?

JackSparrow4

DoYouEvenLift wrote: »

Is it an expensive and difficult product to make and is there only one manufacturer of it?

No several manufacturers make it. Wouldn't be the hardest to make either.

jimmii

JackSparrow4 wrote: »

It's your profile home page. Sorry I'm nosey Glad to hear it's going. SEO takes time but well worth it in the long run.

Lol I actually had no idea I had that there!! Its mainly the b&m shop that does the money but the site definitely makes for a great additional shop window.

DoYouEvenLift

JackSparrow4 wrote: »

No several manufacturers make it. Wouldn't be the hardest to make either.

If all else fails then the last option would be to hire people to make them, if you have the funds and feel the market's big enough to make it worthwhile. Hope you get sorted sooner rather than later so the guys who cut you out don't get as much of a chance to get ahead.

Borzoi

JackSparrow4 wrote: »

I've a distributor issue and would like some advice/guidance on this.

Over the past year I've built up a successful business involving a product that I buy directly from a distributor here in Ireland. The distributor has now bought my largest competitor and now won't supply the product to me anymore and is going after the business that I built up.

I've invested heavily in this not just in stock but also to build the brand and awareness of this product. As a result I've grown the market substantially and now I can't source the product elsewhere. I don't have any contract or agreements drawn up.

Would this be considered anti-competitive and is there anything I could do about it?

To be honest there's very little that you can do, especially without an agreement in place. I've seen plenty of MNC do the same thing - let a small guy build the market then set up shop.

My understanding is that they can't refuse to supply you but they can make the terms so bad that is not worth your while.

Find another better supplier

pedronomix

They must believe that they dont need you and that they can mop up the trade you had and at full margin. How big were you as a customer to them in terms of their sales of the product? if you were doing such a good job, why did they not buy you out? The scenario as described does not appear to add up to me at least.

RUDOLF289

Hello Jacksparrow4.

If you need any assistance in terms of sourcing your product in China, I would be happy to share some of the contacts I have with sourcing companies. Especially if you have not done any business in China previously, it may be challenging the get the right product, at the right price from a reliable supplier.
Dealing through an (Irish) sourcing company takes away the potential pitfalls when dealing with Chinese manufacturers. Sourcing companies would have access to extensive databases of manufacturers across a wide range of industries. They know and understand how business is done in China and possibly may come up with quality and pricing exceeding your expectations.

Drop me a PM if this is an option you would like to explore.

Cheers,
Rudolf289