Upper Deck Answers Questions on New Streamlined Distribution Program

Currently 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.

Earlier this week Upper Deck shared with its distribution partners and direct accounts a new distribution program on how current hobby products will be sold starting in April 2011. Upper Deck determined this course of action was important in order to strengthen and protect the company’s brands, while also streamlining and better-defining the company’s channels of distribution. UD crafted this program by working in collaboration with our Certified Diamond Dealers (hobby shops), Authorized Distributors and legal team.

The best way to make improvements in distribution is to make sure that each business partner is doing what they do best. Authorized Upper Deck Hobby Distributors are expected to only sell current sealed product to brick and mortar hobby shops that agree to only sell it to end-user collectors. These Certified Diamond Dealer brick and mortar hobby shops are NOT permitted to wholesale the product to other retailers, to sub-distributors, or any other entity other than the end consumer. Upper Deck is also creating a new class of trade called UD Authorized Internet Retailers (AIR’s), for a select few customers that operate a brick and mortar hobby shop, and also have a presence on the internet. Upper Deck Authorized Internet Retailers have been hand-picked by Upper Deck to represent our brands online, and may be identified by looking for the Upper Deck AIR logo.

Brick & Mortar Hobby shops that partner with Upper Deck are known as Certified Diamond Dealers.

We STRONGLY suggest collectors purchase ONLY from Upper Deck Certified Diamond Dealers and Authorized Internet Retailers in the future. We will be profiling Authorized Distributors, Certified Diamond Dealers and Authorized Internet Retailers here on the Upper Deck Blog in the coming weeks so you can get a better feel for what services they have to offer.

For those collectors who purchase online, you'll want to look for the Upper Deck Authorized Internet Retailer Logo when purchasing new UD products.

As with any change there are obviously going to be some questions. We sat down with Mike Phillips, Upper Deck’s Director of Hobby Sales on what these changes mean to the industry.

Question – Why did Upper Deck decide to make this change?

Answer – We are always striving to get better in every aspect of our business. We feel we have made some great strides in strengthening the content of our product lines. It was time to look at how those products are distributed and work to strengthen that area of our business as well. Our industry has always had extremely blurry lines and channels of distribution, and it was long past due that we clarify them.

Question – You had a similar program like this before, why did you stop it and what makes this program different?

Answer – Upper Deck was the first in the sports card industry to create a distribution program where we tracked the sale of product using codes in boxes. We were able to see where it went from leaving our warehouse, on to our distributor and then on to their customer. By purchasing back product we could track back how it was distributed and work to keep it in the hands of our partners. It was a program that worked very well for a lot of shops, but it had some holes in it where people could work around it. I can’t share all the ways we’ve filled in those holes with this new program, but we will be sharing more and more in the coming weeks with our partners. The success and enforcement of this program is one of our top priorities at this time, and I can assure you that there is a deep commitment to this current program going forward.

Question – Many of your best products are coming out over the next few weeks, what is the cut off for when this program starts so I know where I can get product from?

Answer – This program will start with the release of 2011 Upper Deck Football on April 12^th

Question – I’m a collector and I have been able to purchase through a distributor in the past. Is that going to change?

Answer – Yes. The job of our distributors is to help keep shelves stocked for our hobby shops and authorized internet retailers. Any of our distributors found selling to collectors will be removed from our distribution network. As a collector however, you will still have plenty of resources to purchase product.

Question –I sell singles on eBay. How will I be affected?

Answer – You likely will not be affected very much, except with regard to where you get your sealed product from. You would need to purchase through a Certified Diamond Dealer or Authorized Internet Retailer.

Question – Who are these Authorized Internet Retailers or AIR’s and how were they selected?

Answer – First and foremost every Authorized Internet Retailer owns and operates at least one brick & mortar storefront. We looked to partner with those who were already successful in the online sale of trading cards, and also looked to work with great shops that are looking to expand to support customers online. Our inaugural group of AIRs have also been selected because they have shown a tendency to promote the industry in a positive way, have been loyal partners with Upper Deck over the years, and have a stellar reputation in the hobby as a whole.

Question – Where is the list of Authorized Internet Retailers?

Answer – We will be publishing it in the coming weeks. In the meantime, collectors should start to get familiar with this Authorized Internet Retailer logo and look for it on the websites of those who are participating in the program.

Question – How can I become an Authorized Internet Retailer?

Answer – Certified Diamond Dealers looking to become an Authorized Internet Retailer need to submit their request in writing to the following address: The Upper Deck Company, Attn. Hobby Policy Enforcement Specialist, 5909 Sea Otter Place, Carlsbad, CA 92010. We will be reviewing the program frequently and making changes as we see fit. We will likely not look to expand this group until Fall 2011 at the earliest.

Question – What about show dealers, will they be able to get your product?

Answer – This is a work in progress. We will be revealing more detail of this aspect of the program in the coming weeks, but I can certainly tell you that in order to sell at any show you will have to be a Certified Diamond Dealer which means you will need to be a full time shop owner.

Question – What about older products? I heard something in the agreement about 90 days?

Answer – Correct, this distribution program is designed only for “current” Upper Deck products. After a product has been in the market for 90 days, shops can sell it at their own discretion. We are only monitoring and enforcing this program on current Upper Deck releases so those who specialize in selling vintage Upper Deck product will not be affected with these changes.

Question – I’m a shop and if I purchase three cases of a product and can’t move two of them, what are my options for selling off the other two cases?

Answer – Shops will need to wait the 90 day period before they look to move product through alternate methods. Any shop found doing so before the 90 day period is subject to removal from the program. It is imperative that shops understand their needs and buy responsibly. Additionally, as an industry we need to get away from this sort of thinking. In what other industry do you plan where you are going to get rid of product before you even take possession of it? Let’s let the collector ultimately determine the fate of products!

Question – As a shop owner, what can I do if someone who is not in the program attempts to buy from me?

Answer – We are investing a lot of resources in tracking where product originates from that is sold online and through unauthorized channels. Shops bear responsibility in knowing their customers. Shops are expected to let buyers know they cannot sell boxes online or to other shops. This program is designed specifically to help shops grow their business so we expect our partners to take responsibility for how they sell Upper Deck products and who they sell it to. We all have to take some responsibility in order for this program to succeed.

Question – As a shop owner, what will happen if I choose not to sign this new agreement?

Answer – You will no longer be able to purchase new Upper Deck products direct or through our distributor network. Additionally, you will not be able to take part in the various programs we will be helping to support our brick & mortar store locations. Lastly, you will no longer receive product information and marketing support for new Upper Deck products and programs. And finally, if you choose not to be a Certified Diamond Dealer your customer’s purchases of Upper Deck products will not be covered by any “warranty” which will significantly limit their ability to receive customer service on issues like damages, collation, etc.

Question – Will shops with a direct account with Upper Deck still be able to purchase direct? Will their allocations be increased since there are less places to purchase from?

Answer – Yes, shops will still be able to purchase direct without issue. Allocations are looked at on a case-by-case basis, so there is no way to yet say whether allocations will increase or decrease.

Question – Will my local card shop be able to purchase from any of the four US distributors?

Answer – Yes, and they can also purchase from Upper Deck directly. Many of our distributors will be offering different programs to help Certified Diamond Dealers grow their business.

Question – Is Upper Deck setting a price that Authorized Distributors, Certified Diamond Dealers or Authorized Internet Retailers can sell products at?

Answer – No. Upper Deck cannot set a price on what products are sold at.

Question – How is Upper Deck going to enforce these policies?

Answer – We have hired a Hobby Policy Enforcement Specialist specifically to handle enforcement of these policies and to work on tracking where the product goes after it leaves our hands. They will be working with our network of customers to make sure they are selling our product in accordance with the program.

Question – Will Upper Deck be monitoring auction sites like eBay for sales of boxed products?

Answer – Yes. That doesn’t mean you will no longer see current Upper Deck boxes available on eBay, but there will likely be much less available there for new Upper Deck products. Upper Deck will actively be purchasing product through these channels as well and tracking it back from there. Partners found in violation of the agreement will be removed from the program. Make sure that when you buy sealed product on eBay or an online site for that matter, you look for the Authorized Internet Retailer logo.

Question – As a collector, what happens if I purchase current Upper Deck boxes from someone who is not a Certified Diamond Dealer or Authorized Internet Retailer?

Answer – Collectors need to understand as well that if they purchase sealed product from someone on eBay rather than a Certified Diamond Dealer or Authorized Internet Retailer, then they are purchasing the product as is. If there are issues with that product, our Customer Care group will likely not be able to assist. The focus of our support will go to our approved network of Certified Diamond Dealer and Authorized Internet Retailers. We will share more about this warranty aspect of the agreement in the coming weeks.