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Cateye cleaning up discounters

Published December 29, 2011

BOULDER, CO (BRAIN)—Cateye USA president Thomas Prehn went on an Amazon buying spree of sorts last spring and summer. He has an office full of receipts and packages to prove it.

"I was probably Amazon's best Cateye customer," Prehn said Thursday.

Prehn was buying his company's own products off of Amazon to try to identify their source so he could shut down deep discounters.

While Cateye sells some products direct to Amazon, oftentimes its products show up at discounts from unauthorized sources. While Cateye can't tell a retailer what price to sell at, the company can identify discounters and refuse to sell to them again.

In part to clean up this problem, Cateye eliminated nine of its 10 U.S. distributors this fall. It continues to use QBP and sells dealer direct. Many of the discounted products available now on Amazon and other sites are the result of Cateye's ex-distributors dumping their remaining inventory. Prehn expects the glut to move through the channel before the prime cycle-computer selling season this spring.

Prehn said he was gratified to see Mike Sinyard's letter to retailers about Amazon's Price Check app, because it gave him an opportunity to explain why Cateye changed its distribution. In short, he hopes the change will eventually eliminate discounted Cateye products from the Internet, to the benefit of specialty retailers.

"I stand shoulder to shoulder with Mike when it comes to supporting specialty retailers," Prehn said.

Prehn said shutting off the unauthorized discounters helps his brand in other ways.

"Some of the products that I bought (from Amazon) arrived in old Nike boxes taped together. The presentation was just awful and that reflects our brand."

—Steve Frothingham
sfrothingham@bicycleretailer.com

Topics associated with this article: BRAIN News

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