LG Now Open to Web Sales
After years of not allowing the sale of its products over the internet, LG Electronics USA has changed its e-commerce policy. In a letter to LG’s partners, Vice President Robert Perry announced the change.
“Based on this brand growth as well as the continued growth of internet sales by other leading brands of consumer electronics, we have decided to carefully allow internet sales of a limited assortment of LG-branded consumer electronics, effective September 15, 2006,” Perry wrote in the letter.
There are restrictions, however. According to the letter, only “National” products will be authorized for sale in the e-commerce channel. At LG, products are classified in three groups: National, TV/Appliance and Specialty. Only available for internet sale are products authorized by LG on its dealer price list: computer monitors, optical disk drives, memory cards (with written permission) and Zenith-branded consumer electronics.
Authorized LG dealers must apply for approval to sell over the Web, and can only sell a model over the internet if it’s on display at their physical retail locations; Web-only dealers cannot be authorized. According to the printed policy statement and application form obtained by Custom Retailer, dealers with fewer than 200 store locations must have a product on display at 100 percent of their stores, while dealers with a larger number of locations must have a product on display in 90 percent of their stores in order to offer it on the web.
Additionally, dealers must present two prices for products sold on the Web: the advertised price and the shopping cart price. As stated in the report, “The normal price is subject to the guidelines of this policy and our MAP policy as detailed in the LG Advertising Funds Usage Policy. The ‘Shopping Cart Price,’ which is the actual consumer purchase price, is set at the sole discretion of the dealer, and under no conditions is influenced, set or discussed by LG and its employees.”