REBUTTAL: FOR MUSIC RETAILERS, GREED WAS NOT GOOD
When I was serving as VP Catalog Sales for WEA, we lowered the list price on over 1,200 titles, all at once. The large majority of them were lowered to $9.98 list, and were offered with an ongoing discount that actually INCREASED the margin % for retail.
This move was made in order to support those retailers that were still carrying deeper catalog titles. In addition, there was a deep discount promotional program that allowed retail to get these titles for just over $5 in exchange for out-of-bin promotions. This was all done to encourage impulse purchases on solid titles at an under-$10 price point, WITHOUT asking retail to shoulder the margin reduction of the sale price—and we still supported these titles with co-op dollars. So I'd say that UMVD was NOT the only supplier that did something to help out catalog sales and pricing.
To my amazement, many of the national accounts that carried these titles took almost a YEAR to lower the shelf price on the affected titles, and some never lowered them at all! They just kept the price the same and pocketed the margin. I was stunned. Many of the same people who were telling me that catalog prices needed to be lower would not reflect our price decrease on their shelves.
Just to set the record straight!
Ron Phillips
Ron Phillips Consultants, Inc.
