Vass distributorships, globalization, protectionism, etc...

[aportnoy]

I think it's a little melodramatic to view this as a personal assault on anyone. This Forum thrives on the very thought of finding top tier goods at less than top tier prices. We live for it. That's all this is. It's unfortunate that it impacts fellow members, but it's called competition and in my book, that's always a good thing for the consumer.

If Mr. Vass wants to post here and state the reasons that he doesn't want these orders to go through, then that's a different story. He owns the business and that's his right. Right now, the only voices we are those of re-distributors who stand to lose revenue in this scenario. They don't own Vass and shouldn't represent themselves as spokespeople for the Brand when their interest clearly lies on this being decided in a cerain way.

 

[edmorel]

Originally Posted by aportnoy

I think it's a little melodramatic to view this as a personal assault on anyone.

My thoughts exactly. No one has questioned Mr. Harris's contribution to these fora. I for one am a newborn on this forum and currently have the following thread saved on my computer as I found it incredibly informative.
http://www.styleforum.net/showthread...hoes+explained

The question is the large price discrepancy between the two markets and the decision to clamp down on the seller that was shipping to the US. It is hard to not take that as a diss if you are an American customer, knowing that the same shoes are sold for a lot less in Europe.

 

[tiger02]

Mr Vass speaks only Hungarian, as I understand it. You will get your best deal, and only satisfactory answer, if you travel to Budapest and discuss it with him. In the meantime, he has hired Gabor and Andrew Harris to be his voice in America. Would it be "good for the consumer" if all North American outlets refused to carry Vass knowing that they would be undercut by overseas distributors? Try ordering a Kiton suit directly from the company, see what answer you get.

Why wasn't anyone bitching about Vass prices two weeks ago? They were a deal at BG prices then, they still are now.

Ed--the personal questioning of A Harris and Gabor was on AAAC. Here it has been implied rather than stated outright. Comparing their business practices to a murderous communist regime, for instance.

 

[JBZ]

The practice being employed by Vass is hardly unique. For example, from my understanding, Alden shell cordovan shoes are significantly more expensive in Europe (I believe they are very popular in Germany). This is just a guess, but I'll bet Alden and its European distributors would be pretty unhappy if some of the Alden American distributors began shipping Alden shoes to consumers in Europe for lesser prices. Nothing is stopping German consumers from flying to the United States and buying their Aldens here (and, as we all know, Germans are always on vacation

).

There was a minor plot line in last week's Sopranos where two Italian hit men were discussing the gifts they had purchased during their visit to the U.S. In particular, it was noted that Mont Blanc pens were cheaper in the U.S. While this is only fiction, I think it's reflective of a commonplace business strategy. See Nudie Jeans for another example.

Is this the correct business strategy? Heck if I know. If people are willing to pay more in Germany for Alden shoes, then it probably is. Same for Vass and the U.S. Is it legitimate (or at least very widespread)? I would say yes.

 

[sysdoc]

I agree with Andrew Portnoy in as far as I cannot see anyone willing to attack or in fact attacking Andrew Harris personally. I, also, have benefited from Andrew H's postings long before I joined SF (or AA for that matter) or made my own first posting. Andrew is highly welcome in both fora and I couldn't possibly see why this should change due to his side job as Vass USA represantative for the West Coast. It is also true that Andrew Harris has made tons of postings that were a huge help for the forum members while not providing any financial benefit to Andrew. He was and still is one of the few really valuable sources of information in both fora and it would be very unfortunate to lose him. I do not understand why people would have a problem with the prices of Vass products in the US. It's entirely their business if BG or Vass USA want to ask even $1,000,000 per pair of Vass shoes. However, it's entirely up to every single potential Vass customer to choose his sources - may that be within the US or anywhere else on the planet. It's hypocritical to blame Andrew, Gabor or BG for their pricing if one can either get on a jet or at least on the phone to purchase Vass shoes elsewhere. What I REALLY want to know however, is WHAT WENT ON BEHIND THE SCENES? WHO told the German retailer WHAT and WHY? Did Andrew Harris or Gabor Halmos get in touch with Vass Budapest, and did Vass Budapest in response then forbid the German retailer to ship interationally? Did Vass Budapest threaten the German retailer? After all, he is evidently forced to give up an attractive business opportunity. There is a dirty component to this story and it is seriously pathetic and hypocritical to deny that.

 

[Cantabrigian]

Originally Posted by meaculpa

I'd be willing to put money down that the powers that be at the US retailers went and had a chat with Vass, or perhaps both Vass and Budapesterschuhe (iirc, that was its name), to put an end to that outlet, or else they would put an end to their own distribution.

It appeared as though this change was initiated by Andrew and Gabor who were justifiably worried about shoes being sold in the US in a way that would not allow them to be compensated for those sales.

Lawyers on the board, what would be the rule in a case like this where someone from Hungary or Germany or elsewhere in Europe were to buy these shoes and ebay them? or send them to send them to American buyers? if done on a small scale

(I am not endorsing that as a plan of action, rather asking a question which I find interesting.)

 

[chorse123]

Originally Posted by Cantabrigian

Lawyers on the board, what would be the rule in a case like this where someone from Hungary or Germany or elsewhere in Europe were to buy these shoes and ebay them? or send them to send them to American buyers? if done on a small scale

I am not a lawyer, and I don't purport to know the details of Vass' business dealings, but it could be that the German seller was violating terms of their deal with Vass, or that they were exploiting a loophole in the deal which Vass prefered closed. In book publishing, for instance, the territory in which a product can be sold is a crucial part of the deal, not just in, say, the US, Canada, UK, Australia or NZ, but in English around the world.

 

[demeis]

The one thing i don't get is why they would care where we buy the shoe from? We are buying the shoe and unless their wholesale prices changes and the are gouging retailers here and making more on the wholesale end it shouldn't matter. Its still one pair of shoes when it comes down to it and its the retailers choice to sell it for what it is. Sorry if i'm being unarticulate but a week of writting papers with another to go with very little sleep has seriously deprived me of thinking clearly. I think an example would suffice

If a vass whole sale cost for BG was 538 at a 2.6 markup would be around $1400 retail

But my question is BG getting the same wholesale price say as the german retailers selling for $550 retail at a wholesale cost of $220 most likely.

My idea is that if BG is getting them at the same price as the german retailers why would vass care who makes the sale? They are both buying a pair of shoes and then they have sold them. What difference does it make because BG is making more money the money goes to them not Vass.

I'm gonna read this tomamrow and have no idea what i'm talking about.

 

[Cantabrigian]

Originally Posted by chorse123

I am not a lawyer, and I don't purport to know the details of Vass' business dealings, but it could be that the German seller was violating terms of their deal with Vass, or that they were exploiting a loophole in the deal which Vass prefered closed. In book publishing, for instance, the territory in which a product can be sold is a crucial part of the deal, not just in, say, the US, Canada, UK, Australia or NZ, but in English around the world.

I was asking about a private individual, rather than a vendor with a contract with Vass.

 

[aportnoy]

Ah, you've hit on the rub of it. The German store places order and buys directly from Vass with no middleman or wholesaler mark-up. Bergdorf buys from Gabor/Andrew, Vass wholesalers/middlemen, and therefore their cost includes Vass's fee plus the wholesalers additional charge. Bergdorf's standard markup amount may also be more than the German store's which could also contribute to the higher pricing.

Originally Posted by demeis

The one thing i don't get is why they would care where we buy the shoe from? We are buying the shoe and unless their wholesale prices changes and the are gouging retailers here and making more on the wholesale end it shouldn't matter. Its still one pair of shoes when it comes down to it and its the retailers choice to sell it for what it is. Sorry if i'm being unarticulate but a week of writting papers with another to go with very little sleep has seriously deprived me of thinking clearly. I think an example would suffice

If a vass whole sale cost for BG was 538 at a 2.6 markup would be around $1400 retail

But my question is BG getting the same wholesale price say as the german retailers selling for $550 retail at a wholesale cost of $220 most likely.

My idea is that if BG is getting them at the same price as the german retailers why would vass care who makes the sale? They are both buying a pair of shoes and then they have sold them. What difference does it make because BG is making more money the money goes to them not Vass.

I'm gonna read this tomamrow and have no idea what i'm talking about.

 

[Get Smart]

Originally Posted by tiger02

Andrew, your posts were some of the most influential in getting me addicted to this F(*&^ing site back in the fall/winter of 2003. Your pictures, whether of your outfits or products, have always shown care, attention to detail, and intense devotion. Please don't allow the few members who care more about their own wallets than the lasting strength of a timeless maker turn you off to the community at large. We love you, man

+10000 on that. I've really enjoyed reading AHarris' posts over the years and have learned a lot from him.

 

[shoefan]

Originally Posted by demeis

The one thing i don't get is why they would care where we buy the shoe from? We are buying the shoe and unless their wholesale prices changes and the are gouging retailers here and making more on the wholesale end it shouldn't matter. Its still one pair of shoes when it comes down to it and its the retailers choice to sell it for what it is.
Vass cares because it is trying to penetrate the US market, which requires that merchants and importers/distributors make some return on their investment (of time and money). If it allows its European retailers to undercut the US merchants, then Vass may find it has no retail presence in the US, which is certain to dramatically limit the number of shoes it can sell here. Business is a multi-year enterprise, so considering all sales to be 'equal' is inappropriate.

 

[passingtime]

Originally Posted by Cantabrigian

Lawyers on the board, what would be the rule in a case like this where someone from Hungary or Germany or elsewhere in Europe were to buy these shoes and ebay them? or send them to send them to American buyers? if done on a small scale

That's an easy question, as a manufacturer under EU Articles 81 & 82 you cannot refuse to supply because you don't like the resellers pricing policy. Equally you cannot have different pricing for different EU members or restrict sales to anywhere in the EU. Some countries such as the UK have additional and stricter anti-competition rules.

It is quite possible to build a grey market in Vass shoes buying from resellers and then selling them on ebay or whatever, that is beyond the reach of Vass. The only thing stopping this is probably that the market would be so small that it isn't worth doing.

 

[shoefan]

Originally Posted by edmorel

Your post ignores the success of many internet only electronics companies (Outlaw for one). Also, I am not aware of any manufacturer going out of business because their products are being sold online.

1. Just because one strategy (e.g. internet sales) succeeds does not mean an alternative strategy is either illegitimate or doomed to failure. 2. Electronics manufacturers go out of business all the time, in part because of the difficulty of getting retailers to sell their products. The existence of a 'gray market' for some products is one thing that makes it diffcult to get retailers. Just because you don't know of any who have failed for this reason doesn't mean it hasn't happened or that a fear of this consequence isn't a legitimate one for the manufacturer.

Hermes sells its goods only via Hermes stores and a few licensed retailers. Other manufacturers sell only via the internet. Just because the latter succeed, does that make Hermes' strategy flawed?

Mr. Vass has not invented a new way to make a shoe.

But surely you would agree that a trademark owner has a legitimate interest in protecting his investment?

This is a contradictory statement. If time and money has been spent to develop a market in the US, what is Bergdorf's risk?

This is a ridiculous statement. If BG has no risk, why don't you open a shoe store in Manhattan to stock and sell Vass shoes for the same price?

Isn't not allowing a lower priced retailer to sell your goods in the same market where a much higher priced retailer exist creating and sustaining a monopoly?

In a narrow sense, it is maintaining BG's monopoly, but there is nothing inherently illegal about it. Again, you are also free to fly to Europe to buy these shoes at the lower price.

Actually, that is exactly what Vass is saying. Theorectically, Vass should not care about the method of delivery from the retailer to the customer (in person, via mail).

According to what 'theory'? In fact, economic theory would argue that Vass does have in interest in protecting its channel partners that are necessary to success in the US market.

This will be my last post as we can sit here and dissect each others post until the cows come home. At the end of the day, the market will decide whether this move was or was not beneficial to Vass.

Again, you are confusing the wisdom of this move with its legal and ethical legitmacy. Many will argue it is a stupid move. Fine, but that doesn't mean it is illegal or unethical, as your original post implied.

 

[tiger02]

Originally Posted by passingtime

That's an easy question, as a manufacturer under EU Articles 81 & 82 you cannot refuse to supply because you don't like the resellers pricing policy.
Curious--how does LVMH get around this to enforce its "no sales" policy?