Comet

[Scylax]

Daily Telegraph (Business section)28/1/09:

'Comet, the electrical retailer,has told suppliers
that they must pay up to �15,400 to have each
product line displayed on the shop floor, plus
a 2% discount on invoices, and a 0.5% fee
for sales and stock data.'

Is there not an easier way to commit
commercial suicide ?

[sandmaster]

This will have two affects:
1. limit the choice available at Comet
2. Increase prices
The solution - don't buy from Comet.

[buildersmate]

If this is true, these people just don't understand the principles of retailing different types of products.
This is certainly operated by some of the food retailers, who use the technique to put more commercial pressure on some suppliers. But customers have to shop for food and what this does is to provide a shop-window for customers to make 'optional' purchases amongst the many food necessities that are part of the weekly shop.
The same does not apply to a trip to Comet - customers generally go for a specific purpose to investigate and maybe purchase a specific and often pricey item.
Price is a little more important and since Comet has many competitors and this tactic has to get passed onto the customer somewhere, it must result in higher prices than current differentials, and Comet will lose out.

[jno]

so what have Comet - and its competitors - been doing in the past?

[buildersmate]

Presumably not trying to extract readies from suppliers merely for the privilege of renting shelf space in their stores? Just good old-fashioned retailing - I buy from a supplier, sell to customer - difference equals my margin.