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Thread: Can supplier dictate my marketing strategy?

  1. #1

    Default Can supplier dictate my marketing strategy?

    So I place orders for a television service company, I am an authorized retailer, and in my contract it dictates that we are not allowed to "cold call." Aside from how people feel about cold calling, when following local, state, and federal laws it is a legal and good advertising tactic; so my question is, is it legal for the company to dictate my private marketing strategy. They seem to have many rules relating to how I conduct my business.

  2. #2
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    It all boils down to negotiations, you want to sell their product as an authorized retailer. To be authorized, they want you to follow certain rules. The question is who has the stronger hand, do they need you more than you need them?
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    Yes, as a representative of their product they most certainly can make the rules by which you are allowed to sell it. If you feel it's unfair then don't sell their product. This is common in pretty much every aspect of business services and commerce.

    I'm a WordPress specialist. WordPress is a open source software, yet they have rules on how service providers are allowed to represent themselves.
    I belong to affiliate programs. It's my website, but there rules to how you promote their product on your site and even how you run your site overall.
    Supermarkets sell thousands of products, and there are rules on how products are displayed and promoted.

    There are an unlimited amount of examples of this in business.

  4. #4

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    100% legal.

    On cold calling, they are protecting their reputation. It's also not uncommon to have minimum advertised prices for different products, too, in order to prevent diminishing the value of the product. Even in retail, there are contracts that dictate where an item is located on the shelves in the store.
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  5. #5

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    When it comes to law, you don't just have common law (the accepted precedent and standards developed over hundreds of years, that are just "accepted" as law by various legal systems) and codified laws (for example, your country may have a law prohibiting certain "deceptive" marketing practices) - you have a branch of law which is called contractual law.

    The study of law is a pretty complex thing and differs quite significantly across the globe.
    However, for the most part, the Constitution comes first. Anything that conflicts with the Constitution is illegal (although you may sometimes need to prove something is actually unconstitutional as interpretation may differ).
    Then you get codified laws. So, whether it deals with extending credit, marketing, etc, etc. you will have a number of laws that are written down and have been passed by a country's parliament (or equivalent like Senate). Whatever "lower" laws conflict with the codified laws are not legal. Any codified laws that are contrary to the Constitution are not legal.
    Then you get various city ordinances and some lesser "regulations". These are not the same as laws, but they are still binding, normally within a limited area like a city or a particular municipality or district. Again, if in conflict with codified law, or the Constitution, they are illegal and not binding.
    Then you get common law, which as previously stated are more like a set of commonly accepted principles for conducting yourself in society. Because of a major increase in codified law, reliance on common law is becoming less and less.
    That is, except for the branch of law called contractual law. Here you still have a number of common law principles that apply, such as that you may not contract against the public sense of morality (so, illegal gambling debts are, for example, not enforceable by a court of law).

    However, for the most part, where there was a meeting of the minds (i.e. both parties understood, or should have reasonably understood, the terms of the agreement between them), if there was no inappropriate threat of violence and so forth and if the contract does not conflict with any form of "higher law" then people are left to govern themselves through negotiation.

    Which is the longer way of saying exactly the same thing as Harold and Brian.
    It is legal.
    And quite possibly good business practice to boot...

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