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Collectible card company moves to protect brick-and-mortar margins

Published: April 14, 2010
Panini America
In what might be a first for a hobby manufacturer, collectible sports card manufacturer Panini America (formerly Donruss) officials have announced changes to the company’s distribution network that will address the effect online sellers have on brick-and-mortar retailers’ margins.

Among the company’s products are NFL and NBA cards, including the Adrenalyn XL trading-card game.

Speaking April 12 to a meeting that included more than 100 hobby shop owners at the Sports Collectibles Industry Summit in Las Vegas, Panini Vice President Mike Anderson said, “We are no longer turning a blind eye to the problem that has been killing margins for hobby stores,” according to the Beckett Media blog site.

Anderson and Panini hobby sales director Rodney Alsup gave details of the company’s plan, to start this fall. It includes:

• Re-authorizing all brick-and-mortar hobby shops; only authorized stores will be able to purchase and sell Panini product directly

• Reducing the wholesale distribution network from approximately 50 entities to as few as four in the U.S.

• Establish a no-tolerance policy for distributors who sell to non-authorized retailers. “If people do not abide by the policy, we’re done with them,” Alsup said. “No warnings.”

• A no-tolerance policy for retailers who attempt to wholesale product, rather than selling directly to collectors. “Again, no warnings,’’ Alsup said. “They will be black-listed.”

• A clear distinction between wholesale and retail businesses. “You are one, or you are the other,” Anderson said. “And never the twain shall meet.”

Jeff DeGraw, an Illinois dealer, said Panini’s presentation addressed his concerns so thoroughly “it was like they were listening in on our retailer welcome meeting [Sunday] night. This was clearly our No. 1 issue, and they’re taking a stand in support of us.” A Colorado-based dealer, Mike Fruitman, had just two words: “Thank you.”

Panini representatives also said during the meeting the company is willing to implement a minimum advertised price (MAP) program, however, many of the distributor and retailer qualifications may address the new-release pricing issues.

More details on the changes are coming this summer, including the formation of a brick-and-mortar standards committee.