Beauty

[Katcat1]

@Johnnyeager  Are you saying that Mally and Laura G. both went bankrupct?

[Nataliesgramma]

Very interesting.......I am a big fan of Laura Geller...

[Johnnyeager]

From what I've read in the bankruptcy filings, QVC contracts in the cosmetics/skincare area shift all inventory risk to the vendor; unsold product is put back to them and needs to be warehoused or otherwise disposed of at vendors' expense.

[2blonde]

@Johnnyeager  So, it seems to me that QVC has nothing to lose by "over ordering" a product because ultimately the vendor will get stuck with the leftovers.  No wonder so many of these cosmetic vendors have had to sell their companies to the larger corporations and/or declare bankruptcy.

This particularly bothers me because after the smaller company is sold to the larger corporation, the product quality ultimately drops due to their need to make a huge profit.

[Daysdee]

@Puppy Lips I thought the same as you.  No wonder QVC never has "markdown" sales.   A lot of these vendors like LG, Mally, etc. sell on their own websites and other stores.  I would assume there is a high mark-up on cosmetics, so there must be some mismanagement for so many of the companies to file bankruptcy.  

[Johnnyeager]

I also learned something else reading the bankruptcy filings that I wasn't aware of.

Geller, and presumably other make up/skin care lines pay QVC what is known as a  Reverse Royalty.  (This is the type of payment owed to QVC at the time of the filing. Hundreds of thousands of dollars.)

It involves the vendor selling a product elsewhere, but still must pay QVC some percentage of that sale (presumably the argument is QVC lost a sale if the buyer went elsewhere). 

I wonder how prevalent that concept is with other type of propducts?

[Puppy Lips]

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@Johnnyeager wrote:

I also learned something else reading the bankruptcy filings that I wasn't aware of.

Geller, and presumably other make up/skin care lines pay QVC what is known as a  Reverse Royalty.  (This is the type of payment owed to QVC at the time of the filing. Hundreds of thousands of dollars.)

It involves the vendor selling a product elsewhere, but still must pay QVC some percentage of that sale (presumably the argument is QVC lost a sale if the buyer went elsewhere). 

I wonder how prevalent that concept is with other type of propducts?

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@JohnnyeagerWell that does not quite seem fair.  Sure, women see products on QVC and will buy them elsewhere.  But does Amazon pay out Reverse Royalties to stores because customers saw it in a store and then went and bought it on Amazon because it was cheaper?

[Johnnyeager]

Difference is, Geller had a legal contract with QVC with these terms.

[Trix]

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@Puppy Lips wrote:

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@Johnnyeager wrote:

I also learned something else reading the bankruptcy filings that I wasn't aware of.

Geller, and presumably other make up/skin care lines pay QVC what is known as a  Reverse Royalty.  (This is the type of payment owed to QVC at the time of the filing. Hundreds of thousands of dollars.)

It involves the vendor selling a product elsewhere, but still must pay QVC some percentage of that sale (presumably the argument is QVC lost a sale if the buyer went elsewhere). 

I wonder how prevalent that concept is with other type of propducts?

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@JohnnyeagerWell that does not quite seem fair.  Sure, women see products on QVC and will buy them elsewhere.  But does Amazon pay out Reverse Royalties to stores because customers saw it in a store and then went and bought it on Amazon because it was cheaper?

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@Puppy Lips It's pay to play at QVC.  Whatever percentage is paid to QVC is probably less than it would cost the brands to advertise in the usual places where you  see ads for cosmetics.  I'm speculating that factors into why their management teams  accept the terms.  I can also understand QVC's position because (with the exception of items exclusive to QVC; or sets), their vast audience reach serves as a great advertising tool, with the customer quite often making the actual purchase of the product elsewhere.  Dept. store counters and stores selling brands which appear on QVC have long recognized a jump in traffic to their stores to see and purchase from a brand after it has aired on QVC. QVC should get some kick back from that benefit.   

[Puppy Lips]

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@Trix wrote:

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@Puppy Lips wrote:

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@Johnnyeager wrote:

I also learned something else reading the bankruptcy filings that I wasn't aware of.

Geller, and presumably other make up/skin care lines pay QVC what is known as a  Reverse Royalty.  (This is the type of payment owed to QVC at the time of the filing. Hundreds of thousands of dollars.)

It involves the vendor selling a product elsewhere, but still must pay QVC some percentage of that sale (presumably the argument is QVC lost a sale if the buyer went elsewhere). 

I wonder how prevalent that concept is with other type of propducts?

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@JohnnyeagerWell that does not quite seem fair.  Sure, women see products on QVC and will buy them elsewhere.  But does Amazon pay out Reverse Royalties to stores because customers saw it in a store and then went and bought it on Amazon because it was cheaper?

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@Puppy Lips It's pay to play at QVC.  Whatever percentage is paid to QVC is probably less than it would cost the brands to advertise in the usual places where you  see ads for cosmetics.  I'm speculating that factors into why their management teams  accept the terms.  I can also understand QVC's position because (with the exception of items exclusive to QVC; or sets), their vast audience reach serves as a great advertising tool, with the customer quite often making the actual purchase of the product elsewhere.  Dept. store counters and stores selling brands which appear on QVC have long recognized a jump in traffic to their stores to see and purchase from a brand after it has aired on QVC. QVC should get some kick back from that benefit.   

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Yes, I suppose.  It is too bad that QVC can not consistently offer prices to beat the stores and have free returns.  Then there would be no need or desire to buy elsewhere.  I bought a lot of Philosophy from QVC, until I started going to their website to buy it for much less when I would get the specials emailed to me.  True, that I never would have bought Philosophy were it not for QVC.  But a lifetime of kickbacks still does not seem quite fair.  These companies must think very carefully before joining QVC.