Upper Deck’s New Distribution Policy Irks Some

The release of 2011 Upper Deck football also marked the beginning of a new policy being implemented by the California trading card maker. The company decided earlier this year to change its distribution model, a concept that means sellers who don’t have a retail store location won’t be able to sell its latest releases.

Upper Deck claimed the action was taken to protect hobby shops from being significantly undercut by online retailers who have little or no overhead and acquire product from a variety of sources, some of whom are Upper Deck dealers.

Upper Deck has now created a hand-picked list of Authorized Internet Retailers, essentially hobby shops under the company’s Certified Diamond Dealer program who also sell online.   Only the AIRs will be given the opportunity to sell new products online.   In addition, Upper Deck’s distributors will be prohibited from selling directly to collectors.

Sports Images, Southern Hobby, GTS and Magazine Exchange are UD’s four US Authorized Distributor partners while Universal and Grosnor will serve as UD’s Canadian Authorized Distributors.

In a letter to its dealers, Upper Deck said it was “streamlining, strengthening and better defining the flow of product from all levels of the distribution chain.”

The move did not sit well with the largest internet seller, Virginia-based Blowout Cards.   Co-owner Tom Fish told an internet radio show Friday night that the move was “terrible for customers”.

Fish’s website has long drawn the ire of card shops, who have said they can’t compete on price.

After hearing of the new policy, Fish said Blowout planned to open a retail shop to be in compliance with Upper Deck policy, but he was “not given an opportunity” to participate in any of the California-based manufacturer’s programs.

“I strongly believe it will limit competition and restrict trade and I have a problem with that, ” he said.  “They’re artificially holding up these prices by limiting the number of people who can sell it.”

Fish, who owned a retail store for several years before moving with the industry trend and setting up an online shop with co-owner Chris Park, admits he is able to “cut a lot of deals with distributors or anyone we can to get our customers the best prices”.

Hobby shops claim the lack of sales regulation on the part of the card companies has hurt their business.  Panini has also pledged to try and protect its brick-and-mortar shops by giving them first crack at selling new products.

Upper Deck Marketing and Social Media Manager Chris Carlin, who appeared on the radio show prior to Fish, said the company’s policy is aimed at trying to keep collectors away from unscrupulous sellers.

“It’s time to protect our customers and give them a safe channel to purchase our product,” he said.  “If collectors want to follow the Pied Piper off a ledge, there’s not much I can do about that.  They should be purchasing through authorized sources.”

Upper Deck says the new distribution program will lead to a “more stable and healthy marketplace”.   Carlin compared some online sellers to ticket scalpers looking to make a buck any way they can.

“We put this program into place not to make life hard for collectors. We put it in place to protect them.  We’re trying to take the power back from those people who are not invested in the category.”

“It’s kind of funny that they talk about protecting collectors when this is the same business that’s lost licenses, been sued by their business partners, licensors and by their employees,” Fish countered. ” I believe that their business policies will continue to be a downward spiral for their company.”

Fish says he’s built Blowout Cards through aggressive marketing and offering collectors fair prices in an economy that’s sometimes been less than forgiving.  He also says he’s done more to promote the hobby than the dealers favored by the card companies.

Citing the giveaway of thousands of Baltimore Orioles tickets during last year’s National Sports Collectors Convention, he told the audience “we do everything we can to promote our business and the industry”.

Carlin said Upper Deck would repay the loyalty of  its certified dealers and collectors who buy from them.

“We’re going to continue to reward collectors for purchasing through the right channels,” he said.

Blowout’s Fish said he’s been in contact with attorneys to see if Upper Deck’s policies violate fair trade laws, but didn’t say what response he had gotten.

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