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Cowboy Living Marketing/Ordering Policies

Cowboy Living’s marketing approach is very different from most vendors. It has evolved dramatically, along with our line of products. We believe that it results in the best presentation of our products to the retail customers. We know that our policies prevent many stores from selling our products. We require a substantial commitment from our dealers. However, the dealers that have made the commitment are enjoying tremendous profits.

We have a strong network of dealers throughout the US and Canada. We protect our dealers’ trading areas by not selling to other dealers in that area and by not selling to internet or catalog dealers. When a trading area is open, we want the most appropriate store in that area to carry our products. In general, this store will be 1) large enough to carry or full line, 2) be the type of store that attracts the western lifestyle consumer, and 3) will effectively merchandise our products per our plan-o-gram.

We require new dealers to order our Premier Package, which sets you up with our entire line. We will personally come to your store and set up the display. With this package we will provide you with 12 of our exclusive rustic iron displays, free freight (a value of about $1,000), free fake food, product description signs, plate stands, and a banner indicating that you are a “COWBOY LIVING EXCLUSIVE DEALER”. This package costs about $10,000.

Our reorder minimum is $1000.

We ship all orders via LTL freight on pallets from our warehouse in Salt Lake City. We charge a straight 10% for all lower 48 shipments with a minimum of $150. We charge a straight 15% for all Canada shipments with a minimum of $200. If a dealer wants to send it own carrier to pick up the order at the warehouse, there is a 3% order prep charge.

WHY DO WE IMPOSE THESE ORDER MINIMUMS?

In Spring of 2007, we increased our reorder minimum to $1000.  Soon thereafter, we also increased our opening order minimum as stated above. There are a number of reasons for this policy, all of which benefit our dealers:

1.   We ship all products via freight on pallets, because:

1. Shipping freight is less costly.  Due to the skyrocketing fuel prices, shipping via ground service has become too costly.  This is amplified by the fact that we have relatively heavy items for their cost.  Our analysis found that our customers were paying anywhere from 15% to 45% shipping with ground service.  Although the dealers do pay for shipping, this cost is passed onto the consumer and the retail prices for our products are increased.  This results in slower sales.  
2. Shipping freight results in far less breakage.  We have also found an increasing rate of breakage of our products when shipping ground.  With freight, we have experienced minimal breakage.  
3. By shipping via freight, we can offer flat rate freight charges to our wholesale customers (10% domestic & 15% Canada).  By offering flat rate freight charges, all of our wholesale customers will pay the same freight percentage in stocking our products.  This allows our customers to price our products in their stores with confidence that their margin will be steady from order to order.  It also puts them all at the same competitive level on pricing.  All freight carriers have minimums, which start at about $100.  When warehouse handling charges are added, we are faced with minimum costs for freight shipments starting at around $150.00.  Therefore, in order to offer these flat rates for freight we must impose order minimums.  

2.   Our dealers should carry our entire line. We have found that our dealers that stock more items from our line have a higher rate of sale for each item. There are two main reasons for this:  

      A.  We have designed our products as a collection, which when shown together increase multi-item sales and repeat business;
      B. With our aggressive marketing campaign on the televisions shows Cowboy Flavor, Equestrian Nation, and The Cowboy Cook, we have strong brand recognition. This means that retail customers will come to your store looking for our products;
      C. Our products are not seasonal. You will sell items from every category of our line year around; and
      D. The bridal registry business is a tremendous sales opportunity with our line, which requires showing the entire collection.

3.   We do not want to over expose our designs in the western retail market.  We believe that many western lifestyle products are over exposed in the market.  A product can be great looking and affordable, but it loses appeal if western retail consumers see it in every western catalog, website and  store.  Toward this end, we do not sell to dealers that want to put our products in catalogs or on websites.  By limiting our products to select retail stores that follow our plan-o-gram, we preserve the demand, appeal and perceived value of the designs.  And, these select stores will have strong sales.

4.   We want to avoid price increases.  Our logistics and ordering policies have allowed us to keep our prices low, despite the erosion of the value of the US dollar and significant price increase given to us by our factories.  Keeping our products affordable to the consumer is a major goal of Cowboy Living.

5. The number of items in our line makes meeting our order minimum less difficult.   With over 130 items in our line, it is not difficult to meet our minimum on reorders if you carry the majority of our products in your store.

We know that our policies are extraordinary.  However, we also know that the demand for our products is strong and unrelenting.  As a result, our dealers are thriving under our ordering policies.  We hope you understand and we hope you can enjoy success selling Cowboy Living products.

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