3 Tips For Competing with the Direct Pin Sellers
We’ve all seen it happen. Your customer will tell you they saw lapel pins online at a price that’s close to your cost. How can you compete? How do you respond? While you may be fuming mad and tempted to tell them to try their luck – here are some tips for handling this situation.
1. Uncle Sam is here to help!
In most cases, Im pretty much a “free-trade” guy. I’m all for letting industries in different countries slug it out on a level playing field. But since the US Government has decided in its finite wisdom to impose an 11% import duty on lapel pins - you can use this to your advantage.
Many of the online stores are basically virtual businesses run from a laptop computer with little or no brick and mortar presence. These “suppliers” will process the order, take your customers money and send the order to an Asian factory. They will almost always ship the product direct from China to the end user – and this is where you can plant a seed of doubt in your customer’s mind.
If this “supplier” is shipping the product direct from China – your customer is now an importer. Being an importer carrys with it responsibilities that your customer may not be willing to take on. As the importer, your client is now responsible for the import duty, customs, proper country of origin markings, and documentation. If the factory does not document the pins properly or worse intentionally puts an incorrect value on the invoice – your customer can be liable not only for the duty but also may be fined for trying to evade import tariffs. If the pins are not properly marked with the country of origin – customs will delay the package indefinitey. If the correct harmonized tariff codes are not on the shipping invoice, more delays and fees. Does your customer really want to be in the import business??
2. Complexity is your friend
I always say this and sometimes it draws a puzzled look – but I love the fact that lapel pins are complex, and sometimes difficult to understand. If you’ve ever tried to explain the difference between die struck, iron, cloisonne and brass etched to your customer you know what I’m talking about. Now put yourself in your customers shoes – faced with all this complexity and only a computer screen to deal with….
At least once each week I’ll talk with a distributor who is trying to fix a bad situation caused by one of these stores. My experience suggests that these online pin sellers either don’t understand the complexities or don’t take the time to understand the customer’s needs and then select the best way to manufacture the emblem. It’s as if they assume that the customer doesn’t care what type of pin they end up with – they simply take whatever art is presented and produce a pin that makes the most sense to them. The result can be a very disappointed customer. You add value by understanding what your customer wants and working with a supplier to translate those wants into a product that meets the needs. It’s hard work – but that’s what we get paid for and your customer will be happier when all is said and done.
3. Time is on your side – sometimes
While production times have gotten shorter and shorter for everyone – you still have two weapons available to you the online sellers can’t provide – domestic production facilities and huge stock pin libraries.
If you look at it objectively, the fact is that the production times are pretty much uniform across the industry. However, many of these sites will advertise that they ship custom pins in 10 days – but they mean they are shipping from China in 10 days. Then of course you need to add the transit time to the customs clearing house, the time to clear customs and then shipping to the final location. Guess what – they’ll offer expedited shiping and all of a sudden those “cheap pins” aren’t so cheap anymore.
When comparing apples to apples (allowing for production and shipping) production time for a pin made in China will be the same for you vs these online sellers. But – when your clients schedule does not allow for overseas production you can pull a rabbit out of the hat and deliver a domestically produced custom pin within 10 days. You can also draw from inventory and ship stock pins within a day – something a “supplier” working from his spare bedroom can’t provide.
While you may think your client will dismiss these objections as your attempt to protect your business, the bottom line is your customer will be more satisfied in the end by working with you and a reputable factory. Who knows, they may get lucky once or twice and may save a few pennies – but none of these online stores can match the services you and your supplier can provide. Stick to your guns and don’t pull any punches – your clients will thank you for it in the end. Trust me, Im the guy who usually has to step in and clean up the mess.