I'm taking marketing course in college right now, and it is pretty interesting. I've just learned about the different distribution channels and such, and I pondered upon a question: what can you do, as a retail store, when your distributor is also selling to end consumers? Here's the story:
Say I have a Prada retail store in the U.S. (sell only Prada products), and I always stock up my inventory from the Prada U.S.distributor. I found out that my U.S. distributor is also trying to make not only my business, but also other end consumers' businesses as well via its own online store (I do not have an online store). Thus, the distributor is reeling in my potential customers by setting lower prices on Prada products than the prices I am charging in my retail store. In this case, what are my options?
I certainly cannot start a price war with my distributor because they will always win... I've been pondering on this question for a while now but can't really figure out how to overcome this. What are your thoughts?