At first, Sabina McPherson chalked up her store’s drop in sales to a weak economy.
But when she happened to check the Website of SwimWays Corp., one
of her suppliers, she discovered something she’d never suspected.
“It looked like a sales site,” said McPherson, manager
of Aqua Leisure Pools & Fire Shoppes in Virginia Beach, Va.
The manufacturer had set up online sales of its products, with free
shipping on purchases over $100.
“The prices on there are less than what I can retail [those
same items] for.”
Selling products online is nothing new for the pool and spa
industry, and the lower prices found via the Web have been a source
of frustration for many brick-and-mortar stores.
“There’s widespread price cutting on the Internet, on
literally 95 percent of the things that are being sold to the pool
industry,” said Bill Kent, president of Team Horner in Fort Lauderdale,
Fla. “It’s been going on ever since the Internet became
a popular way to shop.”
But some industry manufacturers now have begun pursuing a more
aggressive strategy by directly undercutting their own dealers via
sites targeting consumers.
Yet undercutting dealers was never the goal, said Monica Jones,
director of marketing at SwimWays. “We care deeply about our
pool dealers,” she explained, adding that as far as she
knows, the free shipping discount only applied to one item.
“We wanted to move discontinued items that we have in stock,
and have a place to move products that retailers aren’t
selling. Now, we are selling more than just those [products], but
we aren’t selling every item [online].”
Scott Rolenc, president of Aqua Palace Spas & Pools in Council Bluffs,
Iowa, had drafted an exclusivity contract with his supplier,
Splash Superpools Ltd. Then he discovered the firm was enforcing
minimum pricing in his store while undercutting those prices and
selling directly to consumers.
“They wanted us to retail a certain pool for $11,999, and our
dealer cost on that is $6,000,” Rolenc said. “But if
you go on the Splash Website right now, they’ll sell it for
Rolenc found out about these online-only prices from consumers, who
told him they’d found a better deal on Splash’s Website
after visiting his showroom to see the product.
In addition to hurting profits, this online price slashing also can
damage the credibility of dealers with the public.
“If a customer comes into my store and sees that my price is
[almost double the price] on Splash’s Website, 90 percent of
customers don’t even give you a call-back to ask if you can
meet that price,” Rolenc said. “And they probably
won’t be back to my store again.”
Representatives from Splash Superpools did not return calls for
this story by press time.
For Rolenc, there’s no question this business tactic is
shortsighted. “You’re taking the Website your dealers
use and [employing] it to solicit business away from those
dealers,” he said. “If they continue down this path,
they will fail. This goes against our contract, but even more than
that, it goes against common sense.”
Despite Splash’s decisions, Rolenc continues to meet with the
company’s staff, hoping to open a more effective dialogue.
However, he doubts this situation can drag on much longer before
“Are you my competitor, or are you my supplier?” he
asked. “You can’t be both. You’ve got to
Most manufacturers are likely to avoid such competitive behavior,
though, Kent said.“I think [these cases] are isolated,”
he added. “I think they’re outliers, and the reason is
that the big [manufacturers] have too much to lose with the
brick-and-mortar part of the industry.”