i have a supply house and one of my customers is going to open a supply house close to me in order to be my competitor.In order for him to buy products to fill his store, he is going to approache the companies or suppliers i deal with, a lot of those suppliers are going to consult me befor they give him any products because they want to protect their suppliers. am i justified to refuse him getting the the same product i have from my supplier and have him go to other suppliers to make it hard for him to open?
I do not believe this is unethical. He needs to find his own suppliers, not use ones you worked hard to find yourself.
Many suppliers encourage exclusive relationships, especially in close geographic regions, so as to not jeopardize their relationship with their customers. For example, Bed Bath & Beyond and Linens N Things both sell similar products, and even some from the same manufacturer, but not the same models or exact same products.
There is nothing unethical in asking for a territory from your suppliers and a commitment that you are the only one to be a supplier of their products in a certain area. They should be willing to do this.
If the guy wants to compete-- he can get different suppliers, different products, or a different location.
On the information presented, I would agree that there is nothing unethical in asking your suppliers to protect you - espescially if the suppliers are going to come to you to offer you that protection.
If your actions constitute collusion your assistance to him can be both illegal and immoral. The immoral hinges on the unfair treatment of customers through monopolistic practices, the bible mentions this type of activity as the camel struggling to fit through the eye of the needle. The better business bureau will typically help you on this as will the state attorney general. The issue will divide on the “market share” of the whole sellers and houses. The best defense is for you to be free standing, and same for him.
If they ask your opinion or preference, answer truthfully, then let the suppliers make the decision to whom they will sell. As in all of human life, it often comes down to nurturing and sustaining mutually beneficial relationships.
I am of a similar opinion as Texas Roofer. As long as you are not malicious or trying to deliberately drive him out of business you are fine. Competition is not a bad thing but it should be a focus on the positive things you can do in competition as opposed to the negative things. A well formed conscience can quickly tell the difference between the two.