What's with all the "sell at this price only" from manufacturers?
- Thread starter jzmtl
- Start date
Help Support Candle Power Flashlight Forum
Size15's
Flashaholic
The situation before a MAP policy was introduced resulted in a small number of dealers, usually only operating online, to make it unprofitable for other dealers, usually with store fronts, to stock the product.
Less Dealers equals less actual and potential customers equals less market penetration - this impacts on the ability of the manufacturer to stay in business.
I suggest that although it may not benefit a small number of individuals who happen to research and search for the best deal online (etc), a 'MAP' policy facilitates a larger and wider network of dealers which is of benefit to significantly far more consumers by enabling more stores in more towns to stock the products. This results in more consumers having better access to the products, and the retailers are better able to resource a product range because it turns them a profit - this means more knowledgeable retail staff and a wider range in stock, better point of sale marketing etc - again better for the consumer.
Therefore one manufacturer of widgets that has a MAP policy for its own products is not, in my opinion "price fixing" in the anti-consumer sense.
Price fixing is when widget manufacturers/suppliers get together and fix the price so there is no consumer choice when it comes to price.
After all a consumer does not necessarily have to buy a SureFire product.
Al
Rzr800
Enlightened
Again, it's the same old story...if Surefire or any other American company keeps both their distributors and prices in line (and believe me, as has been pointed out several times already... every one of them not only encourages but often demands this) it's "OK".:welcome:
Price fixing?
How do we even use that term when no more than one company is actually involved or distributors aren't being charged on an equitable volume ordered scale?
Al,
Absolutely correct.........I had composed a long post regarding this and it was lost when trying to submit.
Manufacturers all have "overhead"; equipment, labor, insurance, facilities, raw material, safety standards (US and Europe), potential approvals and certification (UL, CSA). Engineering, Packaging, Quality Control, New Product innovation are also overhead. (Not a Complete list of "overhead", but probably somewhat Representative)
Manufactures aren't always good at Sales and distribution, so they contract same. (Manufacturers tend to focus on product manufacture) In our ever changing global manufacturing with both Internet and "brick and mortar" sales, so that service and support channels can provide ethical and honest sales and also support margins for both Manufacturer's and Distributors, policies (geographic and pricing) are implemented.
I would believe (being a Manufacturers Rep and Distributor) that these policies are good for the Mfg., Distributor and Consumer.......as with these restrictions in place, the Distributor can stock more product (to have it available) provide support and provide a channel that will be in business for the "long term", that is well-trained and able to provide the customer and the Manufacturer with needed support and service.
Certainly the internet has affected how Manufactures, go to market and provided the consumer with readily available specification and product availability.
There is a cost to "doing business" and staying "in business" and the consumer does pay this cost OR the Manufacturer cannot manufacture, people become unemployed and the cycle continues.
Thank You for your post and insight (Happy New Year, too!!)
jeffb
Absolutely correct.........I had composed a long post regarding this and it was lost when trying to submit.
Manufacturers all have "overhead"; equipment, labor, insurance, facilities, raw material, safety standards (US and Europe), potential approvals and certification (UL, CSA). Engineering, Packaging, Quality Control, New Product innovation are also overhead. (Not a Complete list of "overhead", but probably somewhat Representative)
Manufactures aren't always good at Sales and distribution, so they contract same. (Manufacturers tend to focus on product manufacture) In our ever changing global manufacturing with both Internet and "brick and mortar" sales, so that service and support channels can provide ethical and honest sales and also support margins for both Manufacturer's and Distributors, policies (geographic and pricing) are implemented.
I would believe (being a Manufacturers Rep and Distributor) that these policies are good for the Mfg., Distributor and Consumer.......as with these restrictions in place, the Distributor can stock more product (to have it available) provide support and provide a channel that will be in business for the "long term", that is well-trained and able to provide the customer and the Manufacturer with needed support and service.
Certainly the internet has affected how Manufactures, go to market and provided the consumer with readily available specification and product availability.
There is a cost to "doing business" and staying "in business" and the consumer does pay this cost OR the Manufacturer cannot manufacture, people become unemployed and the cycle continues.
Thank You for your post and insight (Happy New Year, too!!)
jeffb
Last edited:
"What am I missing? If a manufacturer sells 1,000 units of a product to 2 separate retailers, why would they care what the retailers sell the product for? Hasn't the manufacturer already made their profit?"
Yes, if both Retailers have paid the bill
(and believe me that is important, many don't).........depending on the product, there is also potentially a need for support and service and return (also perhaps feedback, so product can be improved or stabilized to sell more product).
The retailer hopefully learns to do business with the Manufacturer and develops a relationship.......there is more to it potentially than just buying a Manufactured product and reselling it.
As a retailer, I may want to stay in business and sell at higher price, so I give the Mfg. better location and or marketing....If I AM the Manufacture, I really care, because it is my product and I care about everything about it (that means perception ) and I want to sell more!! (lowest pricing doesn't always equate with proper perception or more Sales).
There are Volumes written about Manufacture, Sales, Marketing, Business and Capitalism and today, due to the internet, foreign Mfg., changing technology, economic considerations (strength of currencies, meaning weakness of Dollar or Euro or) business need to be able to change and adapt quickly.
jeffb
Yes, if both Retailers have paid the bill
(and believe me that is important, many don't).........depending on the product, there is also potentially a need for support and service and return (also perhaps feedback, so product can be improved or stabilized to sell more product).The retailer hopefully learns to do business with the Manufacturer and develops a relationship.......there is more to it potentially than just buying a Manufactured product and reselling it.
As a retailer, I may want to stay in business and sell at higher price, so I give the Mfg. better location and or marketing....If I AM the Manufacture, I really care, because it is my product and I care about everything about it (that means perception ) and I want to sell more!! (lowest pricing doesn't always equate with proper perception or more Sales).
There are Volumes written about Manufacture, Sales, Marketing, Business and Capitalism and today, due to the internet, foreign Mfg., changing technology, economic considerations (strength of currencies, meaning weakness of Dollar or Euro or) business need to be able to change and adapt quickly.
jeffb
joema
Flashlight Enthusiast
It's not "price fixing", per se. That has a specific definition: when competitors collude to sell products at a fixed price: http://en.wikipedia.org/wiki/Price_fixing
By contrast this thread is about "resale price maintenance": when the mfg imposes by contract on the distribution chain a minimum price.
Both viewpoints espoused in this thread have been argued at the U.S. Supreme Court level several times. Each side has valid points, otherwise the U.S. Supreme Court would not have changed its mind several times on this issue:
http://en.wikipedia.org/wiki/Resale_price_maintenance
By contrast this thread is about "resale price maintenance": when the mfg imposes by contract on the distribution chain a minimum price.
Both viewpoints espoused in this thread have been argued at the U.S. Supreme Court level several times. Each side has valid points, otherwise the U.S. Supreme Court would not have changed its mind several times on this issue:
http://en.wikipedia.org/wiki/Resale_price_maintenance
Darkpower
Newly Enlightened
- Joined
- Dec 11, 2007
- Messages
- 185
I don't think that MAP (Minimum Advertised Price) is criminal (anti-trust) price fixing. Price fixing implies different manufacturers fixing prices for similar product across an industry. Such as Maglite, Surefire, Dorcy, Brinkmann, and twenty other manufacturers getting together and fixing prices so that all lights with a specific Cree LED cost a specific price. It amounts to unfair business practice.
However, one single manufacturer specifically requiring all its distributors at selling at a specific price is not unfair business. Secondly if a patent exists for the item, patents are the sole exception to most monopoly or anti-trust prohibition (at least in the United States and I don't wish to go off track on this). A patent holder has the exclusive right to his patented widget, to sell or withhold, or do as he pleases. I believe that Surefire has numerous patents, enumerated on its products, which are lasered right on them.
Anyhow, there are ways to get around the MAP pricing. When I was buying my Surefire L2, I noticed that some distributors were offering free CR123 batteries. I got mine with 12 freebies and as I looked around and saw other online offering more. Some online distributor offer free shipping, or offers free knick-knacks like carrying cases or battery cases to offset the absence of a monetary discount on the main item.
However, one single manufacturer specifically requiring all its distributors at selling at a specific price is not unfair business. Secondly if a patent exists for the item, patents are the sole exception to most monopoly or anti-trust prohibition (at least in the United States and I don't wish to go off track on this). A patent holder has the exclusive right to his patented widget, to sell or withhold, or do as he pleases. I believe that Surefire has numerous patents, enumerated on its products, which are lasered right on them.
Anyhow, there are ways to get around the MAP pricing. When I was buying my Surefire L2, I noticed that some distributors were offering free CR123 batteries. I got mine with 12 freebies and as I looked around and saw other online offering more. Some online distributor offer free shipping, or offers free knick-knacks like carrying cases or battery cases to offset the absence of a monetary discount on the main item.
mdocod
Flashaholic
A truly "free" market would be FREE for the manufacture to choose who gets to sell and make contracts and agreements, if the reseller doesn't want to follow the manufactures rules, the manufacture should be FREE to stop shipment. Price fixing is very much FREE market because it allows the manufacture to make the rules rather than a government.
Price-fixing is very much NOT free-market. How can it be a free market when retailers cannot set their own prices? With anti-price fixing laws, the government does not set or control pricing, it merely says "let the market find the price".
B@rt
Flashaholic
If manufacturers would allow dealers to sell at any price the perceived value of the product would plummet, sales would drop and the manufacturer would be soon out of buiseness.
ARC had that problem once, if you do a search you will find info about it.
ARC had that problem once, if you do a search you will find info about it.
Price fixing is illegal in the UK and although a few rogue companies flout the law, for the most part the law is observed and the scenario you postulate just does not exist!
Manufacturers can maintain the perceived value of the product merely by maintaining the price they sell at to retailers, what they can't do (in the UK) is impose the retail price on the retailers. If retailers decide to sell at a loss then it is they who will go out of business!
The UK economy seems to be doing just fine with anti price fixing laws in place! The consumer is king.
Last edited:
mdocod
Flashaholic
when it is the manufacture of the product that makes the decision then it is a free market decision on the manufactures part. they should be FREE to make that decision for themselves. If you step in and tell a manufacture that they are not allowed to do that, then the market is technically less free because you are stipulating what the manufacture can and can not do. You can complain about it, say it's not fair, whatever, there's nothing right or wrong about a manufacture making the choice to force retailers into a fixed price. You don't like it? Don't be a SF reseller!
Freedom is not allowing manufacturers to tell other businesses (i.e. retailers) what they can and cannot do.
Rzr800
Enlightened
I would define freedom as the government (previously defined by yourself) staying out of a very simple business relationship between the manufacturer and whoever he so chooses to distribute his wares.
(again, we're talking true conservatism here; which I full well realize is not very popular in many other places around the world).
Last edited:
"Power tends to corrupt, and absolute power corrupts absolutely" Lord ActonI would define freedom as the government (previously defined by yourself) staying out of a very simple business relationship between the manufacturer and whoever he so chooses to distribute his wares.
I do not believe that the business world, unfettered by regulation, will do the right thing by the people, I do not relish the thought of a society where the likes of Microsoft and Enron and others have a free hand. Regulation in the UK is not harming the economy, indeed it is thriving, yet the consumer is on the whole, protected from the natural excesses of business that fundamentally serve the share holder. If true conservatism would remove such controls I cannot believe it would be for the better. It is an outmoded concept, it has had its day, and we have seen the wrongs that it has fostered. Of course there are always those that will look back on the past with rose tinted glasses...
powernoodle
Flashlight Enthusiast
That theory is contradicted by what we see out there in the real world. Most manufacturers don't fix prices, and their retailers sell at whatever price the market will bear. Yet those manufacturers continue to thrive. A Toyota dealer can sell a new Camry at any price it chooses, and Toyota is about to become the most prolific car manufacturer in the world.
Last edited:
Setting a minimum price protects all of Surefire's distribution channels. If online retailers beat out store pricing by 15-20%, it would probably be enough for a lot of stores to stop carrying them. I'm sure Surefire spent a lot of time analyzing their sales, and decided that it was better to fix prices and still be able to attract small shops to carry their line, then to allow all outlets to price the lights at will.
I work in distribution sales, and we have dropped several product lines because the manufacturer set demands that we felt were unreasonable. They are legally allowed to make the demands, and we are legally allowed to give them the finger.
Fixed pricing, just like non-compete contracts, non-disclosure agreements, minimum purchase requirements, employee contracts, and other standard business practices allow companies to protect their product line and level the playing field in the markets that are most important to them.
I work in distribution sales, and we have dropped several product lines because the manufacturer set demands that we felt were unreasonable. They are legally allowed to make the demands, and we are legally allowed to give them the finger.
Fixed pricing, just like non-compete contracts, non-disclosure agreements, minimum purchase requirements, employee contracts, and other standard business practices allow companies to protect their product line and level the playing field in the markets that are most important to them.
That's a fair complaint.
Funny - On this board companies fixing the prices on lights is accepted practice with discussion pros/cons. On the automotive forums customers are screaming about dealers marking up cars 10-20 (or more) thousand dollars over MSRP and the manufactures such as GM/Ford/Chrysler are saying they are forbidden by law to prevent or interfere with dealers charging the public whatever they want on the vehicles.
Seems like businesses get to pick both sides of the equation, whichever they think keeps the profit on there particular product the highest. Somehow it always seems like the little guy/customer gets the short end of the stick.
Seems like businesses get to pick both sides of the equation, whichever they think keeps the profit on there particular product the highest. Somehow it always seems like the little guy/customer gets the short end of the stick.
