New MAP policy for resellers coming

[Gransee]

Resellers:

FYI, we will be posting a copy of our new MAP (Minimum Advertised Price) policy soon. This price list will place limits on how cheaply our products can be advertised. They may be sold at whatever price the dealer chooses, but they must be advertised at or above our MAP.

Peter Gransee

 

[Fusion]

MSRP??

 

[Tater Rocket]

It isn't really MSRP because a reseller can still sell at any price they want and advertise at any price they want. With MAP, the manufacturer is likely to stop selling to a reseller if they advertise below the MAP. At least, this is how I understand it to be.

Spud

 

[Saaby]

Announcement: New MAP policy for resellers coming

Lets make it a little more official by adding a reserved-for Peter "Announcement" to the title /ubbthreads/images/graemlins/wink.gif

 

[Tomas]

Re: New MAP policy for resellers com

It is "MAP" that causes interesting price ploys in many markets.

A good example is computers.

One can find Apple computers, for example, at discounted prices from many sources - thing is, it's always exactly the same price.

What changes is what is "packaged" with the computer for "free." (Things like a printer, extra RAM, etc.)

I can see now that I should expect to see Arc's advertised at a consistent "discounted" MAP price, with free shipping, or batteries, or whatever "thrown in" to induce customers to buy from dealer "A" rather than dealer "B."

This is why the last computer I bought at the manufacturer's MAP had a free printer, free Wacom tablet, free stack of blank CD-ROMs, double the RAM, and free 3 year maintenance contract thrown in by the dealer. I had my choice of "free" things at the dealership, just so they all came up to "about $350." That was the amount the dealership was willing to undercut the MAP but could not - at least directly.

The flashlight biz could get interesting ... /ubbthreads/images/graemlins/grin.gif

 

[lemlux]

Re: New MAP policy for resellers com

"Famous Maker" premium single AAA flashlights available for $8.99. Contact us at Tomas's outlet in Seattle.

 

[paulr]

Re: New MAP policy for resellers com

What you're describing isn't a MAP. MAP generally means "we can't advertise the price, but call or email us and we'll tell it to you" (or sometimes "click here we'll email it to you)".

In some instances, online stores show the product and MSRP and tell you to add the item to your shopping cart if you want to see the real selling price. Of course you can remove it from the cart afterwards.

 

[Tomas]

Re: New MAP policy for resellers com

Depends on the MAP, Paul. Some are much more restrictive than others (and some will get you in trouble with the Feds: See: FTC Analysis, CD MAP Case )

"Under the new MAP provisions, retailers ... were required to observe the distributors' minimum advertised prices in all media advertisements ... Retailers ... were also required to adhere to the distributors' minimum advertised prices on all in-store signs and displays ...

Failure to adhere to the respondents' MAP provisions ... would subject the retailer to a suspension ... for an extended period, typically 60 to 90 days."

For one of the manufacturers, though, a finding of two MAP violations could cause suspension of the retailer for up to a year.

(IIRC, Apple would at one time drop resellers and remove their "Authorized Dealer" status for repeated MAP violations, including just telling a customer a too low price, and that could even void the factory warranty on a new computer bought from the dealer ... )

 

[Lebkuecher]

Re: New MAP policy for resellers com

I found a really good deal on an AAA two months ago. Thought what the heck I will try it.

Since then, I've bought 3 LEs, 3 AAA Turq, and an LSH-P.

Peter, I probably wouldn’t have tried your product if that first light were priced much higher. Why not let the dealers compete for our business on price and service.

 

[fishface]

Re: New MAP policy for resellers com

sounds like price fixing to me to bully a seller not to sell
a product below a "fixed" price. sooooloooonnnnggggggg
great buys on arc its been good to know ya

 

[paulr]

Re: New MAP policy for resellers com

Dealers can sell at whatever price they want, they just can't ADVERTISE below the MAP. Among other things, that makes them look equal to internet price search engines, so you end up actually evaluating different dealers and making an informed decision about which one you like best in terms of product selection, service, web site appearance, and whatever else, in addition to price. Without MAP, a dealer who undercuts everyone else by a few cents goes to the top of the search engine listings and the other dealers might as well not exist. I don't know if Peter has that effect in mind, but it was a big concern among web retailers when the price engines first started appearing.

 

[merlperl]

Re: New MAP policy for resellers com

Fishface it is quite clear that you are not a businessman!

This is most certainly NOT price fixing, which usually involves collaboration with other manufacturers OR a single manufacturer not allowing a customer to SELL the product for less than a specified price (i.e. "Break our price and we will cut you off"). You can most definitely tell a customer not to ADVERTISE at under a certain price, especially if you are providing them advertising allowances, but you can't tell them what they can sell the product for.

Better do your research before you dismiss the business practices of a respected manufacturer in a public forum.

 

[Catdaddy]

Re: New MAP policy for resellers com

Why in the world is this policy change announcement being posted here?

Sorry. I guess this is none of my business. On the other hand, that is actually my point.

 

[tsg68]

Re: New MAP policy for resellers com

Me no likey!! Me want Xtreme competition. I hate Surfire's strict *** dealer policies and other overblown shenanigan's and Microtech's too, and have sworn off buying both brands new (well, I buy their consumables like lamps and batteries cause I ain't entirely devoid of sense, der hill hill!!)I know that I would not have bought my LSH-P were it not for one dealer's rock bottom offering. As the great Devo album states "Give The People What They Want"! I really like seeing dynamic pricing too, I don't think I've purchased a new CD in over ten years cause the pricing hasn't changed amongst the retailers and look at how that industry is slowly choking to death.

No offense Peter, you gotta do what you gotta do!!! Absolutely love my LSH-P by the way. /ubbthreads/images/graemlins/wink.gif

Later,
TSG /ubbthreads/images/graemlins/grin.gif

 

[N162E]

[ QUOTE ]
Gransee said:
Resellers:

FYI, we will be posting a copy of our new MAP (Minimum Advertised Price) policy soon. This price list will place limits on how cheaply our products can be advertised. They may be sold at whatever price the dealer chooses, but they must be advertised at or above our MAP.

Peter Gransee

[/ QUOTE ]

Thank you sooooo much for sharing this info with all of us. Is there possibly a valid reason (Or an excuse) for posting this type of info to a public forum. Maybe you just wanted to stir up a little action and see if anyone was still awake. /ubbthreads/images/graemlins/twak.gif

P.S. While you are at it why not post your dealer price list and quanitity discount schedule here too.

 

[Gransee]

/ubbthreads/images/graemlins/smile.gif I posted it because I have a tradition of notifying you guys when a significant change is being made.

The problem of pricing on our product has been going on for a while. At first, I thought it was kind of cute. I thought, "what do I care, people can buy our product for cheap and that means more people can own an Arc, what's wrong with that?" Some dealers would call and complain about the other dealers undercutting them. I was kind of hoping the problem would solve itself (trust capitilism to find a balance).

But it seems the method capitilism chose to balance this problem was to lower our margins and dumb down our product. This system would actually force us to stop producing top end products and target the cheap end of the market. Fortunately, I may have spotted the trend before it took a heavy toll.

There is a fairly complex formula at work here and I don't completely understand it enough to explain it well. I can say though that we are on dangerous ground when our product starts to become overally cost sensitive.

What you will see it a correction in our pricing to former levels. I would prefer that the Dealers would compete more on service instead of pricing. This will limit our sales and I understand this. But I would rather sacrifice a few sales so that we may improve our product further. Understand my pursuit of design purity.

I will not be posting the dealer pricing or MAP since that is confidential.

You may choose to see this all as unfair, etc. And maybe this is another example were I need to spend more time explaining why I think this will help the situation. The goal is to improve our product.

Peter

 

[AlexGT]

Peter,

Would you like to comment a little more about your decision? So far it all speculation about your motives, I would rather hear it directly from you.

Remember the never ending thread over at SF forum regarding a similar action? it went on and on and on for more than 200+ posts(think it was 500), I would start sharing toughts before this thread goes the same path.

Just my $0.02 worth

ALEX

EDIT: Just read your post, just don`t go Surefire price MAP on us ok? be nice /ubbthreads/images/graemlins/wink.gif /ubbthreads/images/graemlins/grin.gif

 

[Gransee]

Hmm. I will have to think this through so I can communicate it well.

Different dealers operate at different margins. Sometimes, the extra margin buys the dealer a BMW, sometimes it buys you better service. But if the price is basically the same, free market forces will tend to reward dealers that spend that extra margin on good service.

If there is not much of a margin to speak of, then dealer has to sell a lot more product just to pay their bills. They also have to take a no frills approach. The end result is that generally service suffers.

Arc Flashlights are high end products and require a, "consultive sale". A dealer who is only interested in volume will ultimately stay away from products that require lengthy sales consultation.

Now, because of the CPF, you and I actually do a lot of that consultation for the dealers. They just come in and scoop on our work. If this is the case, I would rather just make the sale myself and cut out the middle man. The only reason for dealers is to market our product to a wider audience. This marketing takes money which requires a realistic margin.

So MAPs encourage customer service and marketing. The two very reasons for having a dealer in the first place.

If left unchecked, eventually our products will be primarily carried by the discount shops only and the dealers with the strong marketing budgets and top notch service departments will stay away from our product. On top of that, these discount dealers will not move as much product because consultation beats price any day. No consultation equals less volume. Add in increased pressure to boost volume by lowering price and the product slips into a really bad place. The result is a cheap product, no service, no consultation, no volume.

At Arc, we want quality and service. Price is not one our main goals because it would hurt quality and service. If you want a cheap light, there are already a deluge of products servicing that segment.

I hope I explained this well.

Peter

 

[tsg68]

If it is truly in the interest of the product, and not to finance a glossy merchandising/packaging campaign I'm for it. But if Arc goes "Hollywood" and becomes a "Branded" item man.....Oh well I'm probably still in. I still don't quite understand how sale pricing that comes out of the dealers margins could hurt yours. Are you saying that dealers will drop the products if they can't make a certain profit margin in fair competition (causing you to have to lower wholesale pricing)? That I could understand a little more but if that is the truth, then the LSH-P at the MAP would probably have been too rich for my blood and I have probably just lucked out. Guess I'll just have to start saving for the LS4 now! I admire you alot for your honesty Peter and hope it goes as planned.You still have my support and I'll continue to try to buy despite my financial situation. /ubbthreads/images/graemlins/icon23.gif

Later,
TSG /ubbthreads/images/graemlins/grin.gif

Why does the word cheap always come into play, It's insulting. Nobody wants cheap, people want high quality, affordable products and being one who has quite literally put themselves on the wrong side of debt to assure myself and my family of having high quality reliable gear, we want assurances that the prices offered are not simply a way of securing high profit margins so some boffo jerk can buy himself a Hummer. That's all, we are wary consumers and not wealthy ones at that, I keep telling my wife that all I would really like to do is buy quality stuff that keeps decent people in business cause it's what I enjoy supporting! I think you're one of these people Peter, I think you are and I support that with my hard earned cash that is meager in proportion. Please don't insinuate that people of limited means are cheap, we prefer thrifty.

Thanks!

 

[paulr]

It's not thrift, it's "financial discipline" /ubbthreads/images/graemlins/grin.gif.