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Q&A: Panini America Executive Addresses Elimination of Retail MAPP Pricing Policy

January 25, 2013

knight-vip

During two days worth of intensive, impassioned and productive distributor meetings at company headquarters earlier this week, Panini America Vice President of Sales, D.J. Kazmierczak, announced that the company would no longer require hobby shops to adhere to a previously instated minimum advertised pricing policy (MAPP) on its products. The policy change is effective with the February 27 release of 2012 National Treasures Baseball and includes products currently being solicited.

The announcement reinforces a philosophical shift in the company’s sales efforts and is intended to give Panini America’s content-rich products a faster start immediately upon release. Today, Kazmierczak elaborated on the decision.

What were some of the key factors that led to the decision to eliminate the retail MAPP?
“The main factor was velocity of sales. Panini America products have the most autograph and memorabilia cards in the industry and the first 30 days of the sales cycle are critical for many of those cards to make it into collectors’ hands and, subsequently, the secondary market. Another factor is that our superior product content supports a move toward a more free-market approach.

What do you see as the biggest benefits to removing the retail MAPP policy? How will our products benefit and how will dealers benefit?
“The biggest benefit will be market liquidity. That approach will benefit everyone involved because it helps with inventory turns. In addition, this different approach will create more demand for pre-ordering product. That is something that we all prefer.”

What has early feedback been to the retail MAPP elimination?
“Overall, it has been positive. Obviously, there are merits to a retail MAPP policy and those merits were the reason that our company went in that direction a couple of years ago. But this is a very fluid category and the time has come for a fundamental shift in philosophy. The ultimate goal at the end of the day is to provide the marketplace the opportunity to pull a product through in a reasonable amount of time. With our strong stable of brands, we feel that our products will perform strongly in the marketplace based on their own merit.”

27 Comments leave one →
  1. January 25, 2013 6:22 pm

    As a shop owner, Authorized Panini resaler, FINALLY!

    • January 25, 2013 9:38 pm

      why are you happy about this? as a card shop owner, i dont know how we will compete with online and whatnot?

  2. January 25, 2013 6:23 pm

    I see that MAPP no longer applies to hobby stores? How about online retailers?

  3. Travis permalink
    January 25, 2013 6:30 pm

    We are in a unique industry. No one goes into Walmart and tries to haggle the price of a new, sealed, item. Card shops are forced to haggle in order to compete with the low overhead of the online guys, and they have no way of returning a product that sells poorly. Thus, they have to sell it close to cost or eat a loss. Yet, Walmart gets to return unopened items to its distributor after a set period of time. I wonder what would happen if Beckett Associates decided to play distributor for hobby shops…

  4. January 25, 2013 6:36 pm

    The program was designed so outlets would not under-sell product at below-market costs. The MAPP was a minimum price allowed, and NOT a MSRP. Selling at Panini’s MAPP already offers the vendor the lowest gross margin in the industry. Now if a vendor sells for even less than the previous MAPP, then the gross margin will be so small that it could not sustain a profitable store. I would much rather see a return to a reasonable announced MSRP and allow discounting to a MAPP level.

  5. Student of the Game permalink
    January 25, 2013 6:48 pm

    D.J. is clearly the resident expert of the Trading Card industry…expect nothing but results and satisfaction!

  6. Jamey permalink
    January 25, 2013 6:54 pm

    I was an English major Tracy, and I struggle to count out change when I purchase a .99 cent can of Arizona Iced Tea. Hence, my MAPP reading issues. So… taking it from the top and in English, am I to gather that Panini will no longer demand a local hobby shop… like mine, for instance, to charge customers…like me, for instance, $400 for a box of National Treasures Baseball (for instance)? If that is what Panini has decided upon, I’m applauding.

  7. Kingbudd permalink
    January 25, 2013 7:01 pm

    Sorry to say it, but about time!!! This program actually hurt LCS and Panini.

  8. January 25, 2013 7:19 pm

    Great news for collectors and dealers.Panini is on a roll.

  9. Eric Cabreros permalink
    January 25, 2013 8:46 pm

    Great! This is like a gift for us collectors!
    Thanks!

  10. January 25, 2013 9:00 pm

    Reblogged this on Sports Card Magazine and commented:
    Should be helpful to let shop owners decide prices to compete– let’s all hope for the best.

  11. Kidmikey permalink
    January 25, 2013 9:25 pm

    Good, now I can buy Panini product when it’s released instead of waiting 1 month for the market price to prevail (as it always does and should). Quite frankly, many times my $ would go elsewhere, instead of waiting.

    I’m glad Panini listened

  12. January 25, 2013 10:32 pm

    I guess I would like to hear from more hobby shops and breakers… As a consumer I am happy. I wish I had a crystal ball to see what impact this might have on LCS vs Online Retailers vs Breakers. Look forward to open discussions I am sure are to follow this announcement.

    • January 27, 2013 1:00 pm

      how do they expect LCS to compete, No one wants to sell it for lower than what the wholesale cost to card shops is.

  13. January 26, 2013 10:09 am

    My customers and I LOVE Panini America products. Sports Cards Plus of San Antonio will always promote Panini America products and fill my customers desire for your GREAT Products. Panini America is a very successful company and knows what is in their best interest. However, I don’t understand the logic. Understanding I do not have all the information and data to conclude a change was necessary, as an LCS owner, MAPP was working well for me. While there was room for improvement, regulation and price policies are important for the well-being of all retail industries.

    This is sure to be an interesting and important subject for discussion at The Industry Summit in Las Vegas. While Panini America knows and must do what is best for the sales of its products, LCS owners, as business owners must weigh risks versus potential gain when ordering products. During the MAPP period, my only thought was how much of this product can I sell in a 30 period and I ordered to that level. Now, I need to concern myself with the different internet retailers as they cut prices in their attempts to try to steal customers from each other (and from my LCS).

    I worked 37 years as a management analyst in my full-time job. I have owned my LCS for 21 years and have owned another retail business for 16 years. The trading card industry is the only retail industry which allows its authorized retailers to attempt to manipulate prices through speculation, buying and selling allotments to each other in an attempt to control market prices, and dumping products when their speculation fails.

    Collectors, the consumer wants to know that they are making wise decisions when they make their purchases. If the price of a product goes up after they bought that product, they feel good in knowing they made a wise decision. If the price of a product goes down, they get upset and come to the conclusion that the product must be bad or overpriced. The next time they buy that product (or that product next year) they will resolve to only buy it at the reduced price. So many times I have heard customers say, last years “xxxxx” is only $xx.xx why is it more for this year’s product? Their conclusion is it cost too much and they will wait for the price to drop.

    Our industry is not a commodities market. The Stock Market is regulated. People are willing to invest in the stock market because it is regulated. A big reason why investors (people who buy product feeling that some day the product will increase in value) have left this industry is the lack of regulation and information on the product. Too much is left to chance, insider information and potential price manipulation by retailers.

    Applying my 37 years experience as a management analyst, I can not logically come up with a value to having authorized internet retailers. I understand, because of lack of authorized LCS retailers and the need to sell to customers everywhere, the internet is the best means to market and sell the Manufacturers’ products. However, price dropping of the manufacturer’s products only negatively affects the consumers perception of the value of the product. Manufacturers are experts in marketing their products and selling their products on the Manufacturers’ web-site. If I were the manufacturer, I would want to protect the image of my products and have a say in the public perception of the value of my products.

    Thanks for listening,
    Charlie

    • January 29, 2013 2:19 am

      Charlie,

      Because of MAPP, RGIII, Andrew Luck, Black Friday and Father’s Day, we enjoyed our best 12 month span of selling Panini NFL releases and so far this year, I have been very encouraged by sales of 12/13 NBA products.

      I am looking forward to seeing what Panini will share regarding internet sellers as part of a new program and I’m sure we will have that much more to talk about in Vegas come March.

      While it’s too early to guess what will happen next, my initial guess is that my sales will be less in 2013 because of the removal of MAPP. Throw in how the top ten picks in the NFL are projected to not be QBs, RBs or WRs and it’s hard to be stoked for 2013 football.

      Our case sells to customers who usually purchased their products online was significantly increased thanks to MAPP and I would hate to lose that business. Our box sales surpased our wildest dreams as we were finally able to offer products at competitive pricing on top of immediate gratification.

      Either way, stores have had the past ~2 years to introduce themselves to local shoppers, get email addresses, share invitations to trade nights, weekly drawings and most importantly, the fun of busting packs or boxes at your LCS.

      I applaud Panini for having the guts to implement MAPP and can’t wait for the other shoe to fall regarding unanswered questions.

      Mike Fruitman
      Mike’s Stadium Sportscards
      Aurora, CO

      • Charlie DiPietro permalink
        January 29, 2013 8:09 am

        Mike,
        I too applaud Panini America for two years of MAPP. It took guts and resolve. Thanks Panini!

        Charlie DiPietro, Owner
        Sports Cards Plus of San Antonio

  14. JoeHockey permalink
    January 26, 2013 11:00 am

    MAPP was a good attempt… the problem was the MAPP price was ALWAYS too high and the big online sellers like DA and Blowout would ALWAYS drop the price significantly after 30 days on EVERY product. People aren’t stupid, they just wait the 30 days and save money. That’s called deflation.

    • January 29, 2013 2:22 am

      Joe,

      Would you say that box breakers who saved $ by waiting were able to sell their singles for as much as customers who went to their LCS the day of release?

      My guess is that in many situations, the box savings was matched by lower returns on investment.

      I am all for saving $, but not at if my reward is lessened card sales.

  15. JoeHockey permalink
    January 26, 2013 11:01 am

    There’s nothing that manufacturers can do to help B&M stores. They tried, but people are always going to find a way to buy easier and cheaper online. That’s how EVERY industry is.

  16. January 26, 2013 11:57 am

    We fully support Panini in all of their efforts to make collecting sports cards even better!

  17. Lillian permalink
    January 26, 2013 1:42 pm

    Well, We are a LCS and no one asked our opinion….. The MAPP for the thirty days was great for us it put us on a level playing field with the online “wholesalers” We had for so long heard well i can get it cheaper @ (fill in the blank) online!!!!. We have faithful loyal customers who come in and buy everything with out a sigh,because we do the best we can on pricing.. I don’t even want to think how manytimes i have said I’m sorry to those that quote a $ from (fill in the blank) I can’t meet that i try but i can’t i am a retail outlet not wholesaler. So i quess we will be back to the old,again. Love Panini but i don’t see how this helps us. So many stores around us
    are falling… We are a dinosaur ….

  18. January 27, 2013 12:31 am

    in my opinion every one wins. as a consumer i want the best price and that will allow me to spend more in the pursuit of the hobby i love. I do enjoy a few card break sites and online shops, but a lcs that you can actually walk into and look at product,just talk sports,and get feedback on whats hit well that week. That in of itself has value. If the consumer wins doesn’t everyone win? Yes lcs may have some overhead but Panini strives to add special promos to promote sales and care about this issue. If a five dollar price drop on a box brings ten more customers to your store on a promo day instead of shopping on line isn’t that a win? It is in my book. Lcs that offer box breaks also will be the biggest winners of all as they will build customer base at a lower cost. Speaking of thank you Panini customer for life here

  19. January 27, 2013 12:44 am

    building a strong customer base in your community and then expanding it through not only word of mouth,but social media, and online box breaks will only expand the opportunities of a lcs in the market. I am not myself a card shop owner or even have an e bay store but i imagine its a labor of love. Adding customers and expanding that love is a great thing.
    just my take

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