Yakima CEO Gerald T. Heinlen has sent a letter to its 5,000 U.S. dealers regarding the sale of Yakima brand products below established prices at the website, www.Racks4Cheap.com. Yakima contends the website, launched about two weeks ago, is connected to competitor, Thule Inc.
The full letter follows:
March 16, 2010
Dear Yakima Dealers:
It has recently come to our attention that a new website has emerged that is selling Yakima brand products at prices below our established retail prices. We have had numerous calls from our legitimate retail partners and consumers asking if Yakima sanctions or services such a site. The short answer is that we do not.
Upon investigating Racks4Cheap.com, Yakima has learned information we believe should be communicated to our dealers in order to prevent potential confusion in the marketplace. Below is a brief review of some of our findings:
Racks4Cheap.com first appeared on the internet about two weeks ago. The site offers no information which would allow someone to contact the business by phone and lists no physical address. Its sales policies state that all sales are final and no returns are allowed for any reason.
Racks4Cheap.com is not currently, nor ever has been, an authorized Yakima dealer. In fact, from our investigation, it appears that Racks4Cheap.com is directly connected with Thule, Inc. in Connecticut. Publicly available records show that Thule, Inc. owns the telephone number that appears on Racks4Cheap.com invoices. We have placed calls to the number and have had no response. The company operating the website has obtained Yakima inventory, presumably from authorized Yakima retailers, and is now trying to liquidate that inventory into the market. Selected photos of Yakima products on Racks4Cheap.com show the price stickers still on the cartons from retailers who purchased the inventory from Yakima. Yakima has never provided Racks4Cheap.com, or any of our competitors, with products to sell.
The practice of lifting and dumping competitive inventory is relatively rare in the outdoor industry. Yakima does not engage in this unsavory business practice. There are a few manufacturers, however, who seek out and find retailers who will partner with them in lifting and dumping schemes. Yakima believes that lifting and dumping is bad for our industry because it results in unauthorized dealers selling products for which consumers have no rights of return, no assurance of good customer service, and potentially no manufacturer’s warranty. Yakima is very concerned about product inventory in the hands of unauthorized dealers and/or purchased in the gray market outside of our authorized distribution network. As you know, authorized Yakima retailers are not permitted to sell other than at retail.
Our industry is known as a marketplace where most participants work hard to build solid businesses based on top-quality brands and high levels of service to consumers. Yakima appreciates all of our authorized dealers who support the Yakima brand with their hard work and excellent partnership. We are concerned about the confusion and inconvenience this situation is causing. We hope that those responsible for it decide to do the right thing and cease and desist from this unfortunate choice of business practice.
Thank you for your business. We truly value your support, and our company stands ready to work with you to grow and improve your business. We look forward to another year of excellent partnership with each and every one of you in 2010.
Sincerely,
Gerald T. Heinlen
