Transshipped At A Cost
"Despite the fact that it's in the dealer agreement that you can't do that, it's a particularly difficult rule to enforce. Some manufacturers, when the economy is bad, don't want to enforce it." But, Piccirilli says, "When a retailer is distributing out of that back room, a manufacturer who wants to have an orderly marketplace all of a sudden doesn't know where his product is going."
DBL's Lorsch notes that as a two-step distributor, "My whole business is transshipping....The product that I sell is available in the marketplace to anybody who wants to buy it." However, he says, "We only carry the lines that we are authorized for by the manufacturer. We do our best to distribute product in line with the rules and regulations put forth by the manufacturers. We did it [carried transshipped goods] a couple of times in the past, and every time I did it it was a disaster. We're too big, we can't go play these games any more."
Lorsch is preparing to soft launch a new software system that would allow DBL to move towards "open, but limited" distribution. "We're putting software controls in for manufacturers that have limited distribution lines. If you're not authorized by the manufacturer to sell an item or product line, our system would lock it out in order to prevent the sale."