online retailers could not discount too deeply. Their idea seems to be that websites can discount very deeply and too low prices might affect consumer brand perception and, I’m guessing, their profits. The challenge they face is with so many independent retailers selling their products, enforcing MAP is like herding cats. It seems like every time I look I see another retailer who is violating known pricing rules and the manufacturers end up being price cops. At NOW, we determined that as a value brand we would do a disservice to our end customers by putting MAP in place. We also found that many of our successful store customers resisted MAP because it becomes another form of unwanted regulation. Because our mission is to “provide value in products and services that empower people to live healthier lives”, we opted to avoid MAP policies. We let our natural foods market set fair prices and believe this is what’s best for our consumers, store customers and NOW. The rulings are still being challenged and some states (Maryland 1st) are currently enacting laws banning MAP pricing, so we’ll see how the courts determine the outcome. Interestingly, in March, 2000 I was personally sued, along with NOW, for this very issue by an online vitamin retailer. At the time NOW did not sell to web retailers and actually had a policy against selling to that class of trade. Unknown to us, our web customer claimed that I had enacted discriminatory pricing when I simply asked them how they could be profitable when selling at wholesale prices. Initially, the customer had bought and sold at the same price in order to grow quickly, which I knew was not sustainable. In the end, we cut off wholesale shipments, they sued, we counter-sued and the whole mess ended up settled out of court and wasting everyone’s time. The web retailer thought that it would win a landmark internet pricing suit, but we knew that our pricing policies were fair, time-tested and legal. The saying is true, “make friends quickly with your accuser, while you are going with him to court.” (Matthew 5:25) Eight years later their same CEO and new CFO both contacted me repeatedly in order to buy our products again, but the memory of being sued was still too close. I had to tell them that our new sales policy is that we don’t sell to any customer who sues us! FAMILY BUSINESS 4TH GENERATION Every leader needs to make preparations for the next generation to take over. Failing to do good succession planning is one of the main problems for family businesses today. At NOW, my father, Elwood, had done this for many years regarding Al Powers as the next CEO, as well as for future family members to join the business. One hurdle he didn’t expect to encounter was from his own management team, which had reservations about preferential hiring of Richard family teenagers. Elwood found that he had to personally step in and lean on managers in order to get his grandchildren jobs at his own company! Family businesses face this unique challenge in different ways compared to large public companies. With over 500 employees, nepotism can threaten the workforce as they may see unfair favoritism and think that future advancement is limited. At NOW, Sarah Wong became our first family teen worker of the 4th generation in 2004. After a rough first summer and a satisfying second summer, the family created a Family Council to help develop and mentor teens, while interacting with management. I had attended an 108 BEATING THE ODDS
