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TK's MORNING BUZZ: How Are Indie Retailers Buying Universal Product From Other Distributors Faring in the Face of a Uni Crackdown?

18 Apr, 2001 By: Thomas K. Arnold

On the eve of the annual National Association of Video Distributors (NAVD) conference in the Southern California desert, the three buying groups that are at odds with Universal Studios Home Video over the supplier's limiting of its wholesale network -- Video One, the New England Buying Group and IBS -- have gone onto the VSDA discussion board with an interesting series of questions.

"Because we are not buying Universal product from Ingram, VPD, Rentrak, or Valley -- the 'anointed' distributors -- we would be interested in feedback from independent retailers who ARE buying from those sources," they write.

"Namely, have your prices on Universal and other product changed in 2001?

"Have you experienced higher freight charges, or a change in monthly buys required for free freight?

"Has the level of service from these distributors changed -- better or worse?

"Have credit terms been tightened or restricted?

"Has anything else changed so far?"

So far, the curious buying groups have received 24 replies. I thought I'd share some of the edited responses.

--"Distribution consolidation is starting to show changes. For years I'd gotten free shipping on all product from Major as well as Ingram. A couple of years ago, due to increases in shipping charges, I was bumped to a $50 minimum for free freight. As soon as MVC was effectively swallowed up by Ingram, my minimum is now $100. Not only that, but because of the dispersion of warehouses virtually none of the special orders I place come from the same point of origin. So I either wait until I pile up a $100 order from that particular ship point, or I eat $3.50 in shipping...."

--"No change per se in our distributor, but the goals are simply ridiculous. They have gone up for each and every Universal title, and even after I b**** and moan to get the goals reduced, they are still too high."

--"I am afraid to post my feelings of how my distributer is ( or is not) performing. If I make them mad, I have no where else to turn to buy all the product I need.

"I will say charging shipping for a replacement defective is highway robbery, though...I could go on and on but as I say, We have no where else to turn. This situation is only going to get worse."

--"So far, I have not suffered.... My average tape cost has gone from $67to closer to $50 or less in the past year. Yes, I buy Universal sideways, as well as Warner, when I have to...."

--"I am starting to see things change, by the day, with the way Universal is handling its new customers that were stolen away from their regular distributor (distributor of choice). My goals have increased dramatically to the point where I do not need 75 copies of a title per store, just to get it at a cheaper price. When I had one distributor (Flash) everything was 100% easier. With numerous stores to care for and buy for, I now find myself spending 15 extra hours a week working on goals, whereas before I spent one day a month going over everything with my Flash sales rep..."I need another full time bookkeeper to keep up with all the paperwork, mainly invoices. It is absurd!... In addition, I can't get the same level of service, or pricing from the 'anointed' distributors as I was used to getting from Flash. Thus, even the cost of goods on Universal product has risen to me, due to this change."

--"I believe Universal's ploy at controlling the product line is just another nail into the independent video retailer's coffin. Less choice. Less service. Higher goals and prices. And more work. Just yesterday, I went to my two stores, collected my 'send-backs' and did the appropriate packing and shipping. I paid Ingram for the week. I paid Warner for the week. I sent off a check to another (sideways) distributor for product of Warner goals I couldn't possibly afford. I e-mailed that distributor that my product didn't arrive on time. And then I went to my Chinese doctor, who treats me with acupuncture and herbs to try to relieve all the residual damage I'm experiencing from my heart medications I'm allergic to."

Now I'd like to pose a question: How many of you are buying Universal product from other distributors, and how are THEY doing in terms of pricing, freight, delivery time, and so on? Remember, Universal executives are cracking down hard to try to plug any leaks in their distribution network, but from what I've been hearing it's not working. Readers?

Contact TK directly at:TKArnold@aol.com

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