Igor Bogdanov, left, and Denis Sinelnikov of RugsHQ.com/Birch Global, Wilmington, DE.

By Lissa Wyman

WILMINGTON, DE -- Igor Bogdanov and Denis Sinelnikov are passionate about the Internet retail business.  They also have a passion for fair play in the sometimes rough-and tumble world of online retailing.

They caught the retailing bug after starting out as website developers, launching the  www.RugsHQ.com retail website in March, 2010. They are expanding beyond their original  RugsHQ.com online business with www.MMFurniture.com.  MMF Furniture is the online brand of Mahogany & More, a bricks and mortar retailer headquartered in Oaks, PA.

A third site, DecorGoods.com, will be launched at the end of March. "DecorGoods will feature elite brands in the home fashion business," said Bogdanov. "We will use Social Media heavily to drive consumers to the website."

Sinelnikov and Bogdanov are expanding and diversifying, but they are also on a crusade to protect Minimum Advertised Price (MAP) policies in Internet retailing.

They are concerned that a few of the huge Internet retailers are blatantly violating MAP pricing and siphoning off customers from the independently owned small and medium sites.

While most vendors stringently enforce MAP pricing, a handful seem to turn a blind eye to the infractions of some of the large Internet sites, said Bogdanov.

And it's not just a few cents. "For example, we might advertise a rug with a MAP price of $1,000 but one of the larger discount websites is selling the same item for $600," said Bogdanov.

Bogdanov said that  these are first quality, new rugs. "The off-price sites often do not mention the vendor names, but they don't change the sku numbers. Consumers have become very knowledgeable. They can price-match by sku. "  

As comparison shopping apps become more sophisticated and common-place, the problem could become even more serious and frustrating, Bogdanov noted. "Vendors don't realize how  knowledgeable consumers have become ," he observed.

It's particularly frustrating because vendors strictly enforce MAP pricing at independent sites. "If we break the MAP price by a penny, we are at risk of losing the vendor," he explained.

"We spend a lot of money on branding and advertising our websites. We have a big investment in this business and we want to make sure everyone is playing by the rules," he said.

Last year, Bogdanov and Sinelnikov contacted approximately 50 other independent Internet  retailers and bricks and mortar stores to discuss the MAP problem. "Then we had meetings with  the vendors and most of them have taken steps to halt the practice. But a few of them are still in denial," said Bogdanov.

Items purchased from Rugs HQ are drop-shipped from vendors or sent from three distribution centers in Wilmington, DE, Philadephia and Huntingdon Valley, PA.

Birch Global is the parent company of www.RugsHQ.com.

02.20.13