Whistle blower. Licence UK - how to approach

[Rc2702]

I have been dealing with a licencee for 6-7 years on some products we B2B in Europe.

 

I have seen this company steal our clients, sell us stock with high pricing unconducive for our model, fail completely on supply ability and they have litrually lost every UK client they ever got with the same failures.

 

 

The company acted so badly they were forced to do B2C and undercut the whole market place by 30% and continue to do so.

 

I'm pretty sure we are there most long standing clients and the truth is we only put up with it as we try to furnish our clients as best we can but in reality the supply ability has cost us dearly makes me to sick to quote numbers tbh.

 

These guys represent one of the largest vehicle manufacturers in the world and I'm at the point where I want to cut all ties with them come Jan 1st but in doing so we will forfeit a lot of business which they will gain.

 

I have never tried to licence something and the odd thing that happened recently is we were asked if it was ok for our supplier to pass on our details via the licencing agency to another company who licence the same brand but on a different product. 

 

The fact is they now have a massive price difference between the whole B2C market and they are now sniffing around our clients and I want to go out with my head held high and tell them to stick it and even give them the business but I also want to show the people who provided them the licence why a client would do such a thing and walk away from a mid 6 figure turnover which could easily have been 7 figures.

 

Surely there are t&c's which go beyond just trademark approvals and manufacturers also seek for sustainability and if that is the case then how do I blow the whistle as I'm pretty sure the licencing agency would attempt to put out this fire without notifying the brand?

 

Any ideas on this, my accomplished expat community?

 

 

 

 

[blackcab]

I doubt the licensor would jeapodise their relationship with their licensee over any one customer. If you were them, would you?

 

They clearly want all of the market for themselves. Without competition they can raise prices and for them life would be good.

 

Why not just carry on making money and take the emotion out if it.

 

[impulse]

Gotta admit, I'm having a hard time divining the plot.  

 

The OP mentioned a licensee, a licensing agency, a company, a vehicle manufacturer, clients, a brand, your own company and direct to consumer sales.  And I may have even missed one or two players.  Or maybe you just referred to one player using multiple terms?  I'm not even sure where your company fits into the narrative.

 

Reminds me of the old schtick, "Who's on first?"

 

You may want to clarify your post if you want some good input.

 

 

[Rc2702]

8 hours ago, impulse said:

Gotta admit, I'm having a hard time divining the plot.  

 

The OP mentioned a licensee, a licensing agency, a company, a vehicle manufacturer, clients, a brand, your own company and direct to consumer sales.  And I may have even missed one or two players.  Or maybe you just referred to one player using multiple terms?  I'm not even sure where your company fits into the narrative.

 

Reminds me of the old schtick, "Who's on first?"

 

You may want to clarify your post if you want some good input.

 

 

It is confusing yes;

 

To clear it up, hopefully.

 

They approach manufacturer (MNFR) in regard to a brand of product the MNFR owns. MNFR hand it to the licencing agency who handle licencing deals on their behalf.

 

Licencee applicant gets permission to licence the brand and use it to create a product.

 

Product rocks hard and sells.

 

My company joins party and does distribution for them, but not exclusively.

 

They have a hard time supplying the demand, the 100 stores buying these items lose confidence and they lose 80% of their market in EU.

 

They then try B2C and fail so miserably they quickly revert back to trying to do B2B all whilst still doing B2c albeit at 30% less the price they suggest and force.

 

I do not see how that is sustainable  and surely it would raise eyebrows to the MNFR that their products are being used in a manner which has no balance and just forces companies other than the licencee to sell at a much higher price.

 

Eg. They sell to B2B for £130+ vat with an SRP of £259 and they are banging it out for £200 to end users (b2c)

 

The whole experience just seems very odd, merchandising of licenced goods has a value to the brand more than it has a value to the product being used to licence the brand. So surely there should be a strong emphasis in the manner licencees can sell goods.

 

Surely you want a fair sustainable market, after all the brands image is being soiled. The resellers say;

 

"unbelievable product but the supply ability and lack of parity where SRP is concerned is shocking"

 

Surely if you are losing clients hand over foot and undercutting them by 30% your actually taking the absolute p@ss and if you are unable to show a sustainable model your licence should be reviewed?

 

 

 

 

 

 

 

 

 

 

 

 

[Rc2702]

17 hours ago, blackcab said:

I doubt the licensor would jeapodise their relationship with their licensee over any one customer. If you were them, would you?

 

They clearly want all of the market for themselves. Without competition they can raise prices and for them life would be good.

 

Why not just carry on making money and take the emotion out if it.

 

Emotion is not the issue it is the lack of professionalism that seems ingrained into this company. Litrually every single decision made has had no logic to it and cost them and us dearly. I want to highlight it to the brand and walk away. I want them to ask the same question you ask.

 

"Who walks away from money without surely having very good reason?"

 

I want the company to wake up and act professional but after 7 years I do not think it will happen hence I think it makes sense to distance ourselves from them.

 

 

 

 

[blackcab]

Have you catalogued every single decision and then shown how an alternative (better) decision would have made more money, not just for your company, but for everyone?

 

Can you accurately quantify the sums of money you believe are being lost?

 

If you can, why not find out when their license is up for renewal and pitch for it?

[Rc2702]

2 minutes ago, blackcab said:

Have you catalogued every single decision and then shown how an alternative (better) decision would have made more money, not just for your company, but for everyone?

 

Can you accurately quantify the sums of money you believe are being lost?

 

If you can, why not find out when their license is up for renewal and pitch for it?

Their initial decision of this item was wrong so ok I shall run through some factual events to underline how much this company have messed up.

 

1. They gave resellers way too much margin and sold to anyone who would buy without considering the resellers would use that margin unwisely in order to sell as much as possibble.

 

I even got into this at that price as the margin was there. We would go out at £155 per unit on a pallet  (24 units) so it was great when they had stock.

 

Initially they sold to every retailer for £130 + vat and SRP was recommended very strongly at £299

 

Product sold well even then and with a price parity across the market at that point the only issue was the sellers who tried to under cut. Not a massive problem at all but they failed to even control this and instead of identifying the bad apples they removed all amazon sellers and took on amazon B2C themselves which is like taking a whole revenue stream away from your resellers. Forcing them to operate without amazon these days is like suicide.

 

The sales of my clients who are mainly in EU mainland were very strong 1 company was smashing 48-60 units a month in first 2 years during 5 months of may-Sept.  3rd 4th and 5th year supply ability f#cked us (max 60 units sold to good client each summer) added to the fact the Mnfr was unable to move crappy colours to reinvest on the good colour. Those three years with 1 client lost around 5k-7.k so over 3 years 1 client 15k min. x by 20 other clients doing half of the good client were talking around 150k lost in business on 1 item by simply not having a supply available.

 

They then introduced the item in different colours but some flopped big time and only 1 colour was making serious waves the rest were 8/1 30/1 sales ratios versus the best seller.

 

I advised maybe do what car dealers do and sell the products for slightly less than the best selling colours and dump the slow sellers once stock is depleted.

 

 - this was met with a higher than thou attitude advising they would not drop the value of the product.

 

Within 2 months a close out distributor was selling the bad sellers for £195 - £230 online.

 

I don't want the business to be honest it's tainted imo. I would prefer the licencee be either:

 

1. Pulled into line

2. Pulled completely 

 

This guys a designer trying to do business. He's full of shit to be honest and I hate working with BShitters.

 

The worst part is they try to do spot deals on all other items which tells me they have too much stock and drop their pants.

 

If they had managed to keep their client Base happy and kept the market fair they would have done 10 times more business on everything.

 

Problem is no one's actually looking at this model beyond some minimal numbers and measuring if it is sustainable.

 

If you peel back a layer and look specifically at why they are able to show year on year sales which have not grew, the only answer is surely because they are now selling it 30% less than all resellers. If licencee could inspect the type of sales and end price it would be clear they are just bending the market place over.

 

If I inquired about the licence I suspect that info may be shared with licencee.

 

Hence the licencing agency I fear is not the best communication channel for airing any views.

 

I'd like to find out who manages the agency within the MNFR and open dialogue about it with a view to sustainability as a biz model and demonstrate the massive slide in the product over the last 3 years.

 

1. Began at 299

2. Began wirh over 100+ sellers

3. Lost 80% of market through poor supply.

4. Licencee removed all amazon to do B2C

5. Licencee gave up on amazon and let B2B back in but only because they are 30% cheaper than rivals/clients

6  disgraceful supply ability with an eye on retail sales for sure

 

 

 

 

 

 

 

 

Edited August 26, 2017 by Rc2702

[blackcab]

@Rc2702 Thank you for the detailed reply.

 

So either they are terrible at business; they want you out, or both.

 

Has anything else worthwhile come along to put some capital into?

[Rc2702]

Just now, blackcab said:

@Rc2702 Thank you for the detailed reply.

 

So either they are terrible at business; they want you out, or both.

 

Has anything else worthwhile come along to put some capital into?

 I think thaivisa should create a magazine with both a digital and print mag and they should attack big business and use products like the marketing managers handbook to identify their targets. Call it Expat-SEA and bridge it with all countries in SEA and have a digital edition available for download or viewing on their site.

 

The expat demographic is not just retirees, entrepreneurs are a big catchment in this area. Add all the tech content on Thaivisa  and a few more chapters and it becomes a magazine which could be done quarterly wirh varied themes.  Festivals for summer etc.

 

Aim it at the large companies who get a nice shiny print edition sent as a sample and underline the readership and all big brand especially the luxury brands would be on it.

 

Print 3000 copies but add that to a readerdship of 350k digitally and it's decent biz. Old style sales, phone bashing with finesse, following up with a knockout email a tasty rate card and your Web link for a viewable pdf mag and the sky is the limit.

 

Requirements are minimal and return could be very big.

 

That's a tasty licencing deal but the girly content on first view of TV may need to be sacrificed and Web banners for patek philippe etc would replace them:-)

 

 

[blackcab]

@Rc2702 The only problem with that is I can't read Chinese.

[Rc2702]

Just now, blackcab said:

@Rc2702 The only problem with that is I can't read Chinese.

Lost me there. Why would you need to read chinese

[blackcab]

32 minutes ago, Rc2702 said:

Lost me there. Why would you need to read chinese

 

It was a joke, due to the large volume of Chinese money that's floating around town at the minute.

[Rc2702]

Just now, blackcab said:

 

It was a joke, due to the large volume of Chinese money that's floating around town at the minute.

Yeah well funny that, hilarious....

[inThailand]

When someone can't explain clearly and succinctly their problem, how do they expect others to provide good feedback?

[blackcab]

13 hours ago, inThailand said:

When someone can't explain clearly and succinctly their problem, how do they expect others to provide good feedback?

 

I understood. Are you having difficulty keeping up?

[Rc2702]

Just now, blackcab said:

 

I understood. Are you having difficulty keeping up?

Thanks BC It was far from rocket science it was very clear if you have experience and thanks for your input.

[blackcab]

3 hours ago, Rc2702 said:

Thanks BC It was far from rocket science it was very clear if you have experience and thanks for your input.

 

You're welcome. I just don't get why some people conduct themselves in the way that they do.