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1999-08-06
Atlanta, GA. Home Depot's Warning to Suppliers

The internet: the last "free market" left in the world. Or is it? According to a Reuters news story out of Atlanta, Home Depot has sent letters to all of its suppliers, including companies like Black & Decker and The Scotts lawn and garden supply company, containing a 'strong message' about sales on the internet. "We recognize that a vendor has the right to sell through whatever distribution channels it desires," the Home Depot letter to vendors states. "However, we, too, have the right to be selective in regard to vendors we select, and we trust that you can understand that a company may be hesitant to do business with its competitors." A Home Depot spokesman told Reuters that their letter was not meant to sound coercive, but was "obviously a business letter." As in: we mean business? Home Depot said their letter asked its suppliers not to sell products via the internet, in part because Home Depot plans to offer its own internet sales capacity, and also to protect sales at its existing stores, that are located in too many places in America. Home Depot described its current website as a "do-it-yourself" website with instructions on home repairs, and that the site is intended "to get folks to come to our stores". The company told Reuters that response to its "business" letter has been largely positive. Home Depot goes on to explain why: "In many cases, we are their largest customer. We feel that the best way for them to sell their products is through us."

What you can do: Although Home Depot realizes that its vendors have every right to sell their products via the internet, they must be hoping that their little "business" letter will discourage such e commerce. "This is a free country," Home Depot told Reuters. But its more free for some, than others. In this instance, Home Depot's vendors. Will companies like Black & Decker and Scotts avoid selling on the internet? It all depends on the economic weight that falls with Home Depot's hammer.And remember shoppers: we, too, have the right to be selective about where we shop for building supply materials. Home Depot wants all roads to lead to their stores, but we CAN be selective, because "this is a free country."










 
 
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