MT. BC...
Regarding the big box stores and distribution of CVSI products.
This could be a slippery slope, but I think CVSI will handle it well.
Here are the facts ( I have researched these)
CVS Pharmacy as 550 stores in the US
GNC has 4691 stores in the US and Canada
Vitamin Shoppe has 795 stores in the US
Walgreens has 9560 locations in the US, Virgin Islands, and Puerto Rico
Wal Mart has 5,358 locations in the US...
Although it is common knowledge that Wal Mart works on discount pricing and may in fact ask for a volume discount, its does not mean that they will be granted one by CVSI. However, it does not stop them or any large retailer from discounting the retail price of selling Plus CBD.
This is where private labeling comes into play. CVSI I do believe will maintain wholesale pricing integrity. Retailers however make the decision on what they will charge. With the volume of stores that they (Wal Mart for example) have, they will be glad to trim $5-7 a jar for PLUS CBD gold.
If you look at many of the food items you buy (example chips and pretzels) the price is already on the packaging.
I can assure you that Frito-Lay decides when Fritos or Lays potato chips go on sale. ( I am not talking about mom and pop stores, they are not national chains)
With a national retailer (like I have mentioned above), the wholesaler has the option to control the pricing. Pepsi and Coke do this all the time.
The way around that is to allow CVSI to "private label" CBD products and place them next to the plus CBD brand on the shelves for a cheaper price.
This is how the retailers get the pricing they want.
When you shop Walgreens you see Listerine and right next to it you see Walgreens mouthwash for $2.00 cheaper.
Brand name pricing is important to CVSI. If you are going to sell CBD soft gels for $5.00 below the price of CVSI brand you are going to have to put your own label on them. CVSI will make them for you, but your name will be on it.
This is still a home run for both CVSI and the major retailers. CVSI would love to private label. This protects CVSI from price manipulation as you both have stated. Remember CVSI controls THEIR wholesale pricing.
I can assure you these type of national retail distribution agreements are very detailed and specific so as to not hurt the small retailer down the street from a Wal Mart who would get killed with this kind of pricing structure.
The big boys understand that some wholesale products are in a stronger position than others. We aren't selling paper towels here folks. We are selling GRAS certified and a premier brand of CBD products.
If a national distribution. deal comes to fruition and I believe it will, these details will get worked out.
We will not know the details of each deal, but I can assure you that existing small business retailers will be protected from these situations.
Vitamin Shoppe in an article written recently has already stated it is looking into the hemp/CBD space. They were not specific about who, what or when exactly, but they know like GNC knows and the other players know, that often times first to market often wins.
A national distribution deal will be huge. Because I believe that it will be a combination of retail distribution of both PLUS CBD products and private labeling as well. This is a major event should this happen.
This is what would make CVSI a very attractive acquisition target. If you were a chip company and you wanted the distribution base and customer network of Planters Peanuts...what would that be worth?
Remember, money follows money....if a national retailer jumps on board, the rest of the big fish will follow.
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