This is why every person who works at an indie record store, otherwise known as mom and pops hates big retailers: they screw us!
This letter was sent to all small retailers and distributors about 3 months ago after this happened, I meant to post it, but just forgot.
Hello retail and distributor friends,
Earlier this month SC Distribution authorized, with Secretly Canadian’s
blessing, participation in a Best Buy ad mailer which is currently running.
Perhaps due to some naivete, we did not perceive the program as potentially
controversial. After looking at things much more closely, thanks in part to
the many emails we have received concerning this, we realize that we may
have erred, and that, at a minimum, we should tread more carefully in the
future. Though unfortunately, much of the negative response that has
reached us is largely predicated on assumptions and/or misinformation
(understandable as they may be). I am writing in an attempt to foster an
open dialogue.
The program which we approved involved Antony and the Johnsons “I am a Bird
Now” (Secretly Canadian, SC105). Best Buy approached us about this title,
as they were seeking to focus on “Artists out of the Mainstream” (their
words, not ours). The album was included in Best Buy’s weekly print
circular which was distributed in newspapers nationwide on 1/22/06. It also
received special positioning with sale pricing for one week in Best Buy
stores. On the surface of things, this seemed like most any marketing
program that we would do with any indie mom and pop store (as that’s where
the majority of our marketing dollars go), just on a bigger scale. Here is
a link to Best Buy’s website featuring the “special offer” –
http://www.bestbuy.com/site/olspage.jsp?type=category&id=pcmcat81900050045
Now as soon as you look at that link, the first thing that screams out is
that Best Buy is selling the participating titles for $7.99 in stores (for
the one week of the program). Alarming to us and to many folks who have
written us is the fact that this price on Best Buy shelves is cheaper than
the price that retailers and other distributors receive by ordering the
title from SC Distribution direct. To say that this was a shock to us is an
understatement.
Many people who have written us have assumed that we allowed Best Buy to
receive a discount so as to lower their price point. Simply this is not
true. Best Buy did NOT receive a discount for this title. Before approving
the program we specifically confirmed with ADA (our exclusive distributor)
that Best Buy would not receive any sort of discount. In fact the price
that Best Buy paid is the same price that any other store or chain would
pay for our titles via ADA. Not to mention, the price that indie stores and
distributors pay to order from SC Distribution directly is significantly
CHEAPER than the price that Best Buy paid. We know that we can’t dictate
or control the end price in stores (as this is deemed in legal-legal land
as price-fixing or something of that nature).
We sincerely feel just as blind-sided by this as many of you probably do.
We had always heard theoretically how big stores, like the Walmarts,
Circuit Cities and Best Buys of the world, often sell items like CDs at a
loss in order to attract other business. And this, no doubt, puts unfair
competitive pressures on the smaller record stores who have, to date, been
our closest allies. Some of the responses we have received have said that
we “should have known better.” This is the first marketing program that we
have ever done with Best Buy which included sale pricing. It’s not always
easy to admit naivete, but I’m not sure if we did know better. Now we do.
But, truly, this experience has now brought this reality even closer to
home to us and has caused us to open our eyes further. That we were not
more conscientious to begin with is regrettable. And that we unwittingly
participated in this kind of scheme is highly regrettable. Independent
retailers and distributors are our base. We have not forgotten that. Every
indie store we work with in Chicago is more important to us than Best Buy
Stores #323 and #814. Here in Bloomington, I shop at Tracks and TDs CDs and
LPs, not Best Buy.
As I’m sure many of you have noticed, we have had a great year. With quick
growth, there are growing pains. With new opportunities and decisions to be made, there are learning experiences. We are discussing how else we may
want to respond to all this. A few of our staff are in France for the MIDEM conference. Once they return, we may have more for you.
Also, I encourage you to read the full comments that Mac from Merge posted
regarding all of this –
http://www.blogger.com/comment.g?blogID=20991992&postID=113819916402497407
He made a number of good points that don’t require an echo from me. I
encourage anyone with questions or concerns to contact me.
Humbly yours,
Nick Blandford