Dealers clash over online discounts

When this very website ran an opinion piece on price cutting by Catering Appliance Superstore’s marketing director Graham Sowerby, the comments poured in thick and fast. In fact, they broke the site record for the amount of responses.

While many commentators questioned Catering Appliance Superstore’s own stance on margins, Thames Valley Catering’s owner, Simon Wratten, welcomed the outlook. “Nice to see one of the larger online dealers taking this standpoint,” he said. “As a small dealer I would love to see the big boys get their act together.”

He suggested that larger online dealers should set a trend of increasing their pricing to a level that would mean the smaller dealers like his company could buy items from the manufacturer cheaper than the end user can buy it online through these distributors.

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“If the large players put their additional discounts into their pockets rather than selling to the end user within their discount structures and ours, we could all make some money,” he added.

Cory Greenhough co-founder and MD of online dealer, FridgeFreezerDirect, called for a solution to the price-fixing question that has dogged the industry: “We all agree the pricing online in our sector is a big issue. We all knew what was going to happen when MAP pricing was pulled by the big players.

“Let’s hope the current issue is resolved amicably and quickly for the two big manufacturers being held to account currently, and that we can all move forward with a logical, sensible and legal solution that allows us all to make a living without having to reduce ourselves to ‘rubbishing’ our competitor’s names.”

Whereas Mick Brown, director at Sunderland-based dealer Cooltrader Equipment bemoaned online selling tactics: “Cooltrader Online has been established for many years and I think that the internet has been bad for everyone unless you just want to make a quick buck,” he commented.

“I still go out cold calling but everyone asks what the model number is then goes on the web. Sure, I have a few loyal customers but many are not interested in loyalty – just the price.”

He recalled: “A few weeks ago I kitted out a shop in Liverpool less than a couple of miles from one of my competitors, and a week later someone on my doorstep kitted out a shop from someone in Manchester.

“I’m afraid things won’t change. The internet is here to stay and unless wholesalers take a stand, nothing will change. The majority of distributors these days are not salesman like me; they are merely order-takers, shifting boxes.

“It’s great being out on the road. I feel as though I am one of the few pioneers left as I never see another salesman selling catering equipment. They just want to sit there waiting for the phone to ring. Is it any wonder the sales are down?”

Graham Batty, MD of Grampian Catering Equipment joined the debate, saying: “There has been this problem of crazy discounting going on for years. It has to stop for the sake of every distributor in the country. What the internet has done has devalued every manufacturer’s price list and product.

“Gone are the days when professional salespeople sold the equipment based on advising a customer on the best product to suit their requirements. What’s happened to features and benefits?”

He believes that online dealers are blaming each other when it comes to cutting prices, with everyone stating that they have to match everyone else, or risk losing business.

Batty suggested: “Let’s see who the brave people are who can say ‘we are a professional sales company, we don’t give things away, we give quality products, first class advice, offer the right product for the right job, know the difference between three phase and single phase, know all the gas regs etc.’. It’s time to stop the box shifters and bring back the true professional salespeople.”

He called for manufacturers to “stand up and be counted” by offering a “fair discount to everyone”. He detailed: “I recently spoke to one supplier who I have supported for nearly 20 years, and discussed their pricing structure. They said they are offering the same discount to someone operating from their front room as to a professional distributor who stocks, installs, staff trains and gives an after-sales service. This, in my book, is complete nonsense.”

This is one debate that the industry returns to, time and again – it definitely won’t be resolved in a hurry.

 

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