Baumblog EST 1968 - A blog for the Baumbachs who originated in Syracuse, NY

We've run into a dilemna that we will probably need a little legal advice on, but I thought that I'd put it out there to see what you all think. We've been purchasing our items for our company directly from the supplier. We then set our own price, which is slightly lower than what the manufacturer sells it to the public for. We never signed anything with the company saying that we had to sell items for a particular price, but they've asked us to match their price. Since we obviously want to maintain a good relationship with the company we buy from, we will comply, but I'm curious about the legality of both their request and what we've done (advertised for less).

I've taken down all of our prices as a precaution. But what's interesting to me is that I know for a fact that another company that buys wholesale from them lists their items on Ebay for less. I would think that would be a no-no as well....

Steve said 30 minutes later

I think you're stuck. While you don't have to comply with their request to match their price, they also don't need to sell you the bags for any less than they list on their website, unless you had an agreement with them before hand. You might advise them of the other company that's selling the stuff on ebay, and mention that you don't think it's fair that you have to comply but they don't.

Even if you did have an agreement with them on price beforehand, they may find ways around the agreement, or just not be very supportive in providing product to you. Since they are you're only source of product, you are very limited in what you can get away with. They have quite a bit of control over you, unfortunately.

Have you gals given any thought to increasing the range of products that you resell? Relying on just one source for all of your income is very risky, as if anything goes wrong with the source, you're out of business.
GJ said about 9 hours later

Steve's spot on, Kristen. There is nothing that can be done from a legal perspective--they aren't violating any laws. It's totally the rules of supply and demand.

Absolutely, positively inform the manufacturer of anyone who appears to be violating their selling rule. Remember, though, that you're not in that line of business, so don't spend your time on finding rule violators.

Now, of course, selling at the same price as the manufacturer is going to dent your sales. If they have a slicker site (and they almost certainly have more media exposure than your company), a price differential was the only thing keeping your sales going. What can you do now? Simple--you must add value for the customer. Previously, you added value by reducing their cost, but that's not the only way to add value.

Adding value:

1. Like Steve said, offer other things for sale--but be sure those things are complementary to your main sale items. Either find good accessories to sell, or expand your business to sell other "interesting" purses. You still want that to be a hallmark of your business, I assume.
2. Offer some kind of freebie or reduced price item along with the purses--this, to the consumer, makes the purse appear lower in price, even though you are keeping with your supply company's restrictions. The idea here is use the gap in price that you used to have to put towards this freebie or reduced price thingamabob.