Rocket - Yesterday we talked about pricing and I said I was curious about it, ao I asked for clarification from Mr. Lehner -
What I sent is at the bottom and Mr. Lehner's response on top -
From: "Eric Lehner" <firstname.lastname@example.org> Add to Address Book Add Mobile Alert
To: "'Kevin J Grogan'" <email@example.com>
Subject: RE: Product pricing at various outlets
Date: Mon, 7 Jan 2008 09:46:40 -0500
Hello again Mr. Grogan,
Thank you for taking the time to share the market intelligence of the two websites for which you provided links below. The issue of pricing is a very interesting one. The following are a few of our thoughts on the matter.
Winning Colours® Stain Remover is positioned as a “high value” product. By this we mean a product which is premium quality and deserves a “good price” ; one that permits all parties to win. We as manufacturer should receive enough to operate with high quality inputs; the retailer should earn a fair profit for providing a convenient high quality retail environment for the consumer; and the consumer needs a price which still leaves the consumer with benefits that are attractive relative to the purchase price when buying the product. By avoiding the low end of the market, all parties can do well and the model is sustainable. In the case of Winning Colours® Stain Remover, because the product can be diluted for so many uses, even at full price, the product delivers great value even while occupying the premium price category.
The legislative environment however is such that virtually any discussion between the manufacturer and retailers about the maintenance of a retail price point is considered anti-competitive. Thus, the “official” price of Winning Colours® Stain Remover for the large bottle is $9.95 as the “Manufacturer’s Suggested Retail Price (MSRP)”. Any variation from that is made by the retailer for internal reasons and is beyond the control of the manufacturer.
From a corporate perspective, Winning Brands ensures that it does not sell its products to retail partners in a haphazard manner, but rather according to a set of policies that can be observed consistently at each level in the supply chain without discrimination between these retailers. In this way, any variation in retail pricing can be said to be purely based on distributor/retailer internal policies regarding their own profitability needs based on the nature of their operation.
As a final thought, price stability is one of the characteristics that demonstrate to retailers that a manufacturer is a reliable business partner. Thus, pricing out of the factory gate must also anticipate set-offs and allowances that may occur “off invoice”. These include co-operative advertising, shipping, and handling fees of various kinds. These factors are all taken into account, and evolve as necessary, when developing the long term business plan for Winning Colours® Stain Remover and other Winning Brands products. All of these elements are at work when the final price is ultimately set by a vendor for the product.
This response is not confidential and may be shared as appropriate.
Your very kind thoughts at the bottom of your note are an inspiration for us in the company.
Eric Lehner, CEO
Winning Brands Corporation
From: Kevin J Grogan [<a href="<a href="mailto:firstname.lastname@example.org"" target="_blank"mailto:email@example.com"</a target="_blank"<a href="mailto:firstname.lastname@example.org</a" target="_blank"mailto:email@example.com</a</a]
Sent: January 6, 2008 9:44 PM
Subject: Product pricing at various outlets
Good morning, Mr. Lehner,
While doing some checking at various websites of Winning Colours dealers around the US, I noticed that some are selling the product for as low as US$7.75 while HD and Canadian Tire sell theirs for nearly $10.
Most products have a "lowest advertised price" and I'm sure Winning Colours does too. This protects the dealers/market, I thought... I am hopeful of a moment for clarification.
Thanks in advance,
PS. I saw this and whenever I want to reinforce my decision to become a million share investor, I read this several times... an excerpt from the announcement of Patricia Diane Miles to your team of true professionals -
"The decision by Winning Brands to expand its executive sales structure at this time represents its commitment to implement success in a practical manner that eludes many aspiring young firms. According to Winning Brands CEO Eric Lehner, a company needs to be realistic about the shortcomings common to failed junior companies and to avoid them. "A growing company needs people who know how large companies operate. It's almost too basic to mention except that it is remarkable how many aspiring companies are populated by founders and staff who do not have corporate experience comparable to their targeted scale of operation. Ms. Miles is comfortable with more than $50 Million in annual sales. That affects how she does things. Our Production Manager is comfortable with manufacturing over $50 Million worth of product. That affects how he does things. The list goes on. We are assembling a team of people at Winning Brands who know how to be successful, view success as a normal state of affairs and act accordingly," says Lehner."
You are a leader and we see it as forum members conducting Due Diligence everyday... I see it as a student of continuous adult education with an emphasis on leadership. And I am extremely grateful to have been in a position to see WNBD and the massive potential for the foreseeable future! Being a shareholder is a true blessing. Thank you for the opportunity to participate in your successes!