Retail in general is a hard game, but in the adult industry, I think it is even more so. Buying and selling product was once a straightforward task, and physical stores found their customer base willing to part with their cash because pleasure products weren’t so easily and freely available. People had to search and hunt for a shop that sold exactly what they were looking for. And when they did, they felt a sense of achievement.
And then the internet happened.
As retailers, we need to diversify and adapt to the market.
The internet is a powerful tool, life would not be the same without it. The internet has given birth to many businesses that have grown and flourished thanks to this incredible, ingenious global network. And yet, it’s both a blessing and a burden.
Let me explain. What is the biggest impacting factor when it comes to helping a retail business grow? Price! Your products need to be affordable and your customers need to be happy to pay what you are asking for them, or they simply won’t buy. Before the internet, this was much easier because adult stores were generally few and far between. But the internet has brought these stores closer together, creating a virtual high street of any type of shop you can imagine (providing the business has an online outlet of course).
Here’s the blessing: stores can sell to not just their local area, but across the world as well. From just a few thousand people in-person, their products can now be bought by millions of people from the far corners of the globe. Providing you nail your SEO right, your customers are there, ready and waiting.
The burden: As I previously mentioned, stores are now virtually closer to each other than ever before. You can switch from one store to the next in just a click of a mouse instead of driving for hours to the next brick-and-mortar retailer. Customers are becoming smart with their online shopping and price comparison is playing an enormous factor in their spending habits. Consumers want a great price on the product they are buying, and unless you can give them an offer they can’t refuse, you may be waving good-bye to the sale (and in some cases, the customer alltogether!)
Retailers often complain about a huge player in the online retail industry, one that is almost impossible to compete with: Amazon. This retail giant has been around for a long time now, and it’s more popular than ever thanks to its ultra convenient shipping options and pricing.
Adult retailers often find that brands they are selling are also available on Amazon’s marketplace, sometimes for less than what the store bought it for. As an online retailer myself, I can understand the frustration of this. It drives profit down and can dissuade your customers from shopping with you, a knowledgeable, reputable specialty store. The care and love we put into our stores and products are lost in a sea of brown cardboard boxes with almost zero customer service. But people still shop with Amazon, and we have to accept that.
So what can we do about it? We could sit here complaining about being walked over by the bigger boys and feeling sorry for ourselves … but better still, let’s do something about it!
Is Amazon really the enemy here? This is a question I often think about. Those low prices you see, how do you think Amazon is doing it? Do you think they’re making a loss on those products? Nope! So how can they offer such low pricing?
I should mention that this information is applicable to Amazon U.K., and I’m not sure if it differs in the U.S., so this may not be the case in your own country.
When selling into Amazon U.K., manufacturers/vendors set the price Amazon buys for and then can let Amazon know the RRP. (This is the recommended retail price for those in the U.S. We don’t have MAP pricing in Europe, so we can only suggest the selling price and can’t enforce it.) Often when these Amazon prices are lower than the RRP, this is not Amazon. It’s usually the vendor supplying Amazon who has reduced the price or given Amazon a limited time deal. And this in turn helps Amazon to reduce the price, producing more sales and increasing the number of units shifted. It’s usually down to the supplier of the product as to why the price is so low. If they didn’t give Amazon such a low price in the first place, Amazon wouldn’t offer it so cheaply.
“So what’s the best way of dealing with this, seeing as I can’t compete with these prices?”
The first port of call would be to talk with the manufacturer or supplier of the products. Express that you are unhappy and can’t compete, and that their prices and brand are being undermined by Amazon. Remember though, Amazon’s vendors aren’t always the manufacturer and it can sometimes be other retailers with vendor accounts who are dumping stock onto the market just to get rid of it (for example, if they are closing down or have fallen out with the manufacturer). It may not be possible to do anything about the price in this case, but it’s worth making the supplier or manufacturer aware of the situation to see if they can improve it in any way (and remember that if this is the case, things should improve again once the stock that Amazon has is gone). Undercutting RRPs can harm the product’s reputation too, so usually brands won’t want them being undercut and will try to resolve it where they can.
If you can’t get anywhere after talking with them, it’s time to consider whether you want to carry on with the brand. As retailers, we need to diversify and adapt to the market. We can’t run with the same products forever and things change. Just because something is a bestseller now doesn’t mean it will be for the next 20 years. Ranges and brands need to change and stay fresh and current to give the customer choice. Why not consider brands that aren’t widely available? Take small but calculated risks on new ranges and strike exciting deals to bring your customers back.
If there is no loyalty from a brand to their retailers and no respect given to those who are selling their products, why would you want to offer them to your customers? We need to be selling products we love, products we believe in. If manufacturers or suppliers don’t want to help retailers to remain competitive, maybe it’s time to wave goodbye. Let them have the cheaper end of the market and devalue their own brand while you move on to other exciting things and leave them behind.
Curiosity is a natural human response. We are always looking for something new, something we haven’t seen before. Stand out to your customers with unusual, eye-catching brands that aren’t mainstream and you’ll scratch that itch for your customers.
Now ask yourself again: Is it Amazon that’s really the enemy…?
Daniel Miller has worked in the industry for over 10 years and specializes in adult retail and wholesale.
