Westminster Suspending MAP Policy

Late last year Westminster/Rowan/FreeSpirit announced they would be adopting a Minimum Advertised Pricing (MAP) policy. Read more about it, and commenters’ reactions, in this previous post. The policy would have required all shops as of Feb. 1, 2009 to advertise Westminster fabrics for no less than $9.50/yard, though retailers would still be free to sell the fabric at any price they wished, as well as advertise volume discounts.

Last week, Westminster notified customers that they would be suspending implementation of the policy pending further review. It looks like it might still happen in the future, but it’s off for now. The notification said that it would be impossible to enforce the policy in fairly and consistently.

On a related note … in the original post I wrote the following:

In the internet age, MAP policies effectively level the playing field between brick-and-mortar and online shops, the latter of which can afford a lower markup due to lower overhead costs. In the fabric world, there is also a third player — Etsy- and eBay-based shops, which have even lower overhead costs than stand-alone online shops and tend to offer the lowest prices on fabric.

My fabric-selling friends corrected me on this. It might be true some of the time, but it’s clear to me now that overhead is highly dependent on the scale and location of your shop, number of employees, as well as other factors. Ebay and Etsy fees can add up, often making it far cheaper to run a stand-alone shop. And an online-only shop still needs to pay rent to store inventory and do business — this could easily cost more than running a traditional brick-and-mortar store, depending on geography, scale, etc. My sincere apologies for the misinformation!

5 Comments

  1. Jenna says:

    Very interesting! Thanks for sharing.

  2. Jona says:

    One word comes to mind: WHEW!!

    Thanks for sharing this Kim! It was bad enough that they raised their prices and then the post office raised shipping rates. It’s nice to have a bit of a reprieve!

  3. Jamie says:

    Hello Kim,

    I think it’s also important to note that some, or I should say many B&M shops, sell online via ebay, etsy, or have an online presence as well as their B&M. And they sell it at a discount rate.

    As for the MAP policy being suspended, I have mix feelings. I am relieved that as of right now I will not be forced to sell my fabric at a certian price. Like many shops, I too have slow selling fabrics, which I have had to mark on sale within the first year of release. Being forced to keep the price in-line with the MAP price would be quite financially painful. However, I can’t help but wonder if some of my slooooow fabrics are slow, because of online shops that start the pricing below the suggested retail price. Case in point, the new AH fabric. I just recieved my shipment of fabric last week and as I was listing it on etsy I found another seller selling it below the suggested retail price. I also wonder if slow moving, NEW, fabric is the result of fabric designers selling thier own fabric (or, I should say pre-selling their fabric with a discount on first orders????). Just keepin it real.
    I definitely have mixed feelings about the whole MAP policy. While I want to offer fair prices to my buyers, if we the retailers continue to sell new designs below the suggested retail price for the sake of “sales activity,” the business model just won’t work. The fees and overhead all add up. Continuing to try to sell purely on price point looks good at the moment, however it will eventually make the fabric worthless for the retailers and the distributors.

    Having said all that, I really don’t think the price per yard should go up – even if it is just 25 cents per yard. That’s just crazy talk!

  4. Liza says:

    Hi Kim
    Thanks for this follow up post about the Westminster policy. After reading the comments left the last time you posted about this, I was in despair. Westminster is to be commended for trying to support the small business people who are trying to stay in the black in these difficult economic times. Just today on one of the Sunday talking heads shows, one financial analyst said that 30% of new jobs are created by small business people. That is the backbone of our economic stability.

    The majority of the comments left showed a lack of understanding about the reason why Westminster felt the need to try to help their customers, all small businesses. Perhaps a real life example would be helpful.

    At the Houston Quilt Market, my shop bought and entire line from one designer. The retail cost should be $9 -$9.50 a yard. The day after getting this line, we saw it being sold for anywhere from $7.50 – $8.00 and then following a link on your site, we found it from an “Etsy” store for $6.30! We will be putting this line on quick sale and will never order it again. We sunk about $4000 of working capitol in this line. We may break even but with the salaries we pay, almost surely it will be a loss.

    If other stores have the same issue with this line, the designer will be the ultimate loser because we will not reorder a line that doesn’t produce the profits needed to justify putting it on our shelves. The wholesale company will not get the orders needed to ask the designer to do a new line and so it goes.

    Also, in many of the comments left there was the implication that shops asking a fair price were price gouging and therefore, ANTI MOM. Nothing could be further from the truth. We employ moms (and dads and grandmoms) and pay wages. We are not faceless hearless “big guys” trying to stomp on little guys, We are small business people trying to bring a selection of fabric to consumers. To turn on the lights, stock the shelves, pay for the heat, and pay wages, we need a fair mark up.
    Liza

  5. Kristin says:

    I have to say I agree with Jamie on her point about designers. We noticed a huge difference in sales with one designer who sells her own fabric. We won’t order the whole collection again. They can’t have it both ways, IMO. That’s something I have always appreciated about Amy Butler–she tries to help the small businesses that carry her products without competing with them.

    I’m disappointed about Westminster’s decision to not implement this policy. We adjusted our business plan and our buying plan based on their letter that we received at the end of the year. Needless to say, we don’t appreciate a change of plan this late in the game.