Ina Steiner EcommerceBytes Blog
News and insight focusing on ecommerce.
by Ina Steiner, Editor of EcommerceBytes.com
Tue May 10 2016 11:35:41

Target Campaign Has Resellers Seeing Red

By: Ina Steiner

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Photos of what appear to be internal documents from Target have online sellers buzzing and indicate the retailer is conducting a multi-week employee-education campaign against resellers.

Target banned resellers last year as part of a crackdown on eBay and Amazon sellers who use retail stores to source inventory in what's known as retail arbitrage. It instituted the policy after shoppers were disappointed when the retailer ran out of items that were part of a special limited-edition "Lilly Pulitzer for Target" collection.

At the time, Target told EcommerceBytes it had instituted the new policy in order to ensure it had enough product for its customers.

We asked Target on Monday to verify the images that appeared online this week - we don't know the original source of the images, so we don't know how old they might be.

At first glance, they appear to be fliers perhaps meant to be posted in the employee areas of Target retail stores, and both have the heading, Protecting Target Assets. However, it looks like there are hyperlinks at the bottom of the image - it's possible an employee took a photo of a computer screen.

The first image, "Week One," is labeled "Reseller Policy: Identifying a Reseller."

"Selling merchandise to resellers often causes in-stock issues, loss of profits (this part is cut off) Target policy. Remember: Know Resellers! No Resellers!"

One section advises employees what to look out for :

- Attempts to purchase large quantities of an item.

- Attempts to use many discounts or asking for special discounts.

- Attempts to undermine quantity limits by conducting back-to-back transactions or (this part is cut off).

- Requests to override system prompts.

It then advises employees what they can do if they suspect reseller activity or are approached by a reseller.

The second photo, Week Two, is labeled, "Reseller Policy: Profit Loss."

"Resellers continue to erode profit at Target - especially when merchandise is on ad/promo. Resellers abuse Target discounts and exploit system vulnerabilities to obtain merchandise at a value below our cost, then sell it at a higher price for personal profit. Last year, sales to resellers cost Target an estimated $13 million!"

Some of the online merchants discussing the images were sympathetic to the retailer, such as one who had previously owned a brick-and-mortar store himself. The specials were to draw in customers, he said. Another suggested Target was less concerned about profits and more about its brand.

But others said they couldn't see why it mattered what they did with products purchased from Target after the sale - why not welcome sellers who are driving revenue for the retailer, they wondered.

As we noted, we have not verified the authenticity of these images and don't know how old they are. We'll update this post when we learn more from Target public relations.




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by: queenfloraday This user has validated their user name.

Tue May 10 12:42:43 2016

IMO this whole thing is a senseless issue. A sale is a sale. Target sets a price, buyer pays the price. What happens to the merchandise after it is purchased is none of Targets business. Target has the right to set limits on the number of an item sold. Target has not lost money if the items sold for the amount Target priced them at. I just don't get what the fuss is about.....

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by: Randy This user has validated their user name.

Tue May 10 13:16:21 2016

How does Target figure it "lost" money? If they have an item on sale for let's say $20 and a reseller sells it for $30, does Target figure the $10 difference as a loss? I don't get it.

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This user has validated their user name. by: Philip Cohen
Web Site

Tue May 10 13:22:33 2016

Sorry, but I'm with Target on this one. Target advertises a product at a special cost or below cost price to attract customers into the store in the hope that they may buy other regular-priced products, and resellers think that it's ok to come in and scoop up large quantities of said special-price items so that they can resell them at a higher price? What is the point of anyone selling anything (other than otherwise unsaleable "stale" stock) without making a profit (or actually making a loss) on it?

Target has every right to refuse to sell such specials to such "scalpers" who are effectively only one step behind the shop lifters ...

The simple answer to this problem may be to program the checkout with a non-quantity discount: a single special item, special price; multiple special items or special item only, regular price.

There are any number of ways the pricing of such specials could be promoted to ensure that scalpers don't simply come in for quantities of the special only ...

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by: That Guy This user has validated their user name.

Tue May 10 13:53:06 2016

Gotta love that corporate greed.

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This user has validated their user name. by: Rexford

Tue May 10 14:38:39 2016

Protecting Target assets? Excuse me, but once an item is sold it is not a Target asset.

Thankfully I buy nothing to sell from Target. It does make me view them quite unfavorably though.  I do also think that a company who is selective regarding who their customers are and one who starts policing who their customers are is headed down a slippery slope.

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by: aim04744 This user has validated their user name.

Tue May 10 15:26:49 2016

If I am paying the advertised price, clearance or not, what I do with it is my business. There is a little law called First Sale Doctrine that applies. Once I buy it, it is mine to do with what I want to.

Ask Target how the latest collaboration is going since they cut off re-sellers? The Merrimekko for Target line is still sitting on shelves and is now starting to show up on clearance shelves.

Good job Target!  

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by: mcposty This user has validated their user name.

Tue May 10 16:24:20 2016

I have no problems with target limiting quantities bought, beyond that there is nothing they can do

What really sucks is when resellers buy at normal price because its limited and sell it..or ots employees snag up.items to resell...see nuka cola incident

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by: RCL This user has validated their user name.

Tue May 10 18:14:55 2016

Agreed. ''Resellers abuse Target discounts and exploit system vulnerabilities to obtain merchandise at a value below our cost, then sell it at a higher price for personal profit.'' I didn't really get that exactly. Did they mean, resellers buy at the discount, in quantity? Is that the ''exploitation''? If Target want's to sell ''One per customer'' fair enough and easy to enforce. DO IT. Otherwise, give up the loss leader and sell at a reasonable price. When I find vintage stuff in quantity at a steal, I BUY IT ALL. I don't try to get it cheaper, either. But I BUY it as priced for resale. Isn't that what our capitalist system promotes??

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This user has validated their user name. by: IDKwhoIare

Tue May 10 19:30:34 2016

Target has the right to limit quantities.  How they figure they lose 13 million annually to Resellers is something I really want to hear about.

I don't shop at Target because they have such limited selection and most of it is crappy quality. I am sure there are some things I would buy, but I would have to be in there to see it :) Any of their loss-leaders, etc, are not enough to tempt me into the place.

It did not help that they infuriated me when they bought out Chef's Catalog (a dotcom where I bought my quality kitchen items for years) and then shut them down this January - as if they were actual competition to Chef's.  They are not even in the same league.

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by: fashionista This user has validated their user name.

Tue May 10 20:05:02 2016

I agree with Phillip.  Target figures it's loss by the money it loses with re-sellers, because when a re-seller goes in, generally they're going only to purchase the items for resale (the Lilly dress, Lilly shoes, etc) while regular shoppers will go and purchase the Lilly dress, they might buy toothpaste, shampoo, food, etc,  -  A re-seller is in and out.  

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by: aim04744 This user has validated their user name.

Tue May 10 21:19:18 2016

But none of the Lilly stuff was on discount! Shoppers paid the asking price for it. So how is that cheating the company?

I agree with limiting the # of items per person, especially on loss leaders, but none of the resellers did anything wrong if they went in and bought Targets asking full price for something they were selling. None of the Lilly pieces were loss leaders.

I feel the same way about other stores clearance. The store couldnt sell it at regular price so they clearance it, eventually getting it to rock bottom prices. Then they get mad when someone comes and buys it all at the price they are asking for?

Sorry, not sorry. They need to put on their big girl panties and figure out how else to make money with the stuff they cant sell then. Once I pay the asking price (full or clearance) it is mine to do with what I want to.

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This user has validated their user name. by: Philip Cohen
Web Site

Wed May 11 06:37:56 2016

" It instituted the policy after shoppers were disappointed when the retailer ran out of items that were part of a special limited-edition "Lilly Pulitzer for Target" collection."

I'm assuming such limited edition promotions—reduced price or not—are to get people into the store with the hope that they may buy other items as well. There is no point in anyone offering such "special" promotions if scalpers are going to buy up the whole lot on the first day of the promotion, which leaves later buyers with the impression that Target is suckering them ...

I doubt that any merchant has any problem with a potential scalper hoovering up the whole lot of any discounted stock that the merchant itself could not otherwise sell ...

Regardless, it's Target's decision if they choose to ration their sales ...

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This user has validated their user name. by: Rural artist

Wed May 11 08:25:03 2016

LOL, I actually watched this one and while I was mulling over whether I would purchase I believe the product was gone in 24 hours-- out of the store.  It was disappointing.  This has been going on for years and some stores are aware and use it to their advantage too. I don't dunno if there is an answer.  

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by: RCL This user has validated their user name.

Wed May 11 11:19:48 2016

Look--any so-called losses are speculative unless they have proof the inventory would have sold but for the resellers. Target type retail establishments ruthlessly destroy competition from local speciality shops and businesses. They create an illusion of high quality and rock bottom prices. If Target (Walmart, etc.) can dish it out, they can take it. The profit motivation cuts both ways. NO SYMPATHY AT ALL.

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by: RCL This user has validated their user name.

Wed May 11 11:21:22 2016

I should add we have Targets all over here and I've never been in one. Anything I know of their quality is anecdotal--and not good :)
The stuff has a bloom.

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by: leathermermaid8 This user has validated their user name.

Wed May 11 11:39:35 2016

While I agree that where anybody sources their inventory isn't my affair, I feel sorrier for the consumer who goes to these places and finds them chronically out of stock. To be able to try something on while still in the store is important for those who get sick of mailing something back (item not as described!) or driving a half hour to return something.

For myself, I don't find their clothing to be all that great, no matter who designed it.  I saw a woman actually crying there because something was out of stock in her size.   Some of it is about as well made as Walmart's.   Granted, not the same cache.  

I would think the person who pays inflated prices on different websites for Target merchandise is the one who is really angry.  Of course, researching a label before buying would help to make an informed decision about what an item is really worth to you to own.  Judging from most complaints I've seen on eBay, people still don't do this.  There's no law against making maximizing profits, people just get mad when someone else does it before they do.

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This user has validated their user name. by: Rexford

Wed May 11 13:54:14 2016

leathermermaid8, if Target were eBay these shoppers would come out of the dressing room screaming this garment did not fit me....I should be paid for my gas and the time I took to come into the store.  :)

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by: leathermermaid8 This user has validated their user name.

Wed May 11 15:41:32 2016

@Rexford
Mon Ami, you are SOO right! Don't give the numpties any more any ideas. ;)

Target should be grateful some of these customers are being lead away to do their evil elsewhere.

 

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by: Michael in BC This user has validated their user name.

Wed May 11 17:45:39 2016

Target tried setting up here in Canada and couldn't sell much of anything, on sale or otherwise.  Our local Target was a ghost town - empty aisles and empty shelves.  Folks would visit once and never go back.  

I did go twice, while the place was open.....once to look at all the empty shelves, and a 2nd time to use the washroom (I know, I know, there could have been a "don't use the washroom unless you're buying something" sign, but I didn't see it).

Target thought that Canadian buyers would flood the store, expecting stock levels and pricing to match Target in the US.  Well, that didn't work, so Target took their lumps, packed their shopping bags and fled back over the border.

 

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This user has validated their user name. by: RKTOYS

Wed May 11 21:03:17 2016

Problem is, Target sends half a dozen products to a store and thinks their work is done.  Toys are popular loss leaders but they're never actually available for purchase.  When I read "store exclusive," it translates to "automatically out of stock forever."

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