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Price fixing


chinook35

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Here is a topic for discussion. I’d like to hear everyone’s take on this. I have been in search of a certain electronics upgrade since the end of the fishing season. I searched every venue , local , online , large and small marine suppliers , and the manufacturer's web site ( I’m not naming names at this time )  the price was invariably the same all over. Ok. I’ll wait for black Friday or cyber Monday   No good price was the same   I found one site with a best offer   I offered what I am willing to pay ( not a ton below the asking price , I wasn’t lowballing )  got a counter offer for the exact price offered everywhere. I am asking the federal trade commission and my state’s AG to look into this  if it’s price fixing. It’s illegal. Any input ? This seems to happen a lot in the marine / fishing environment 

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Manufacturers can tell there distributors what the list or selling minimum price is. Don't adhere to it and your contract or exclusive right to sell there products is terminated. This keeps legit distributors from slitting each other's throat  and allows them a profitable margin so they can stay in business. If I was a distributor and knew that the product I was selling was allowed to be whored out to anyone and sold with hardly any mark up I would stop buying and selling that product.  This , ( MFG setting selling price ) , protects a legit distributor from having to compete with Brandon selling out of his basement . Leveling the playing field or should I say keeping your distributors happy is the end game for most MFGs. Good luck with the FTC , might as well be fighting City hall or the dictators of NY. I would be spending my spare time doing fishing gear / boat maintenance instead of getting worked up about something that you have no control over. 

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You are very wrong. Manufactures can SUGGEST a retail price. They cannot set a minimum price. That’s price fixing and is against the law.  I work hard for my money and will not sit by and let unscrupulous manufacturers and distributers get away with breaking the law. The free enterprise system should dictate prices , not some greedy manufacturer   If I want to sell a product below suggested retail , that’s my business. If a manufacturer penalizes me for it , that’s the FTC’s business. My gear and boat have already been maintained and are ready to go , thank you

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This sort of price control is more common than you think. And I for one am grateful for it. It prevents the big box stores from driving the little local village guy out of business. The Weber grill company use this business model and it levels the playing field for your local small hardware store. It is NOT price fixing. It would be if several competing manufacturers get together in a dark room and agree to raise the price of their products instead of competing.

If a company as big as Weber can do it (for many years now) it must be legal.

Edited by rolmops
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Sorry  I am not wrong,  they set the suggested retail price and if you come off it they stop selling you the product.i am talking about larger companies like Raymarine , Hummingbird etc. Some  companies allow it ( price slashing ) but in the process lose there base that kept them in business over time or sell enough product that they don't care. Gearwrench would be a good example of everyone cutting each others throat. Then you have Snap On/ Mac tools that do not budge on there prices.  You can argue all you want ,go to the FTC,  not going to change a thing 

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No doubt, manufacturers establish a MSRP ... and they watch it.

Sure there are sales, but often this comes down from the manufacturer themselves.

Cars, electronics, etc.

 

It's not price fixing in the sense that, you are free to choose another electronic supplier and pay

for something cheaper. A manufacturer may decide the sale price of their product, under contract

through a retailer.

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2 hours ago, rolmops said:

This sort of price control is more common than you think. And I for one am grateful for it. It prevents the big box stores from driving the little local village guy out of business. The Weber grill company use this business model and it levels the playing field for your local small hardware store. It is NOT price fixing. It would be if several competing manufacturers get together in a dark room and agree to raise the price of their products instead of competing.

If a company as big as Weber can do it (for many years now) it must be legal.

I can't believe it but I agree with you, have a nice day!!

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I love it when someone has intimate knowledge on the subject and yet someone who has an opinion that differs with said knowledge disagrees.  Yet their second sentence states "I’d like to hear everyone’s take on this."

 

Seems to be the common theme.  Opinions trump fact (not a play on words but fitting).

 

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I have been in sales for the last 45 years , most ,if not all retail stores average mark up is 50 % . Overhead is huge , Brandon somehow  getting a hold of a product and selling it out of Moms basement has zero overhead. The legit distributor doesn't have a fighting chance against Brandon and whenever possible they will report Brandon to the MFG who will try and track him or find out how he is getting the product and shut it down. I have been in the room when a motorcycle shop was going off on S&S ( major HDavidson supplier ) about this ,online sales . S & S took care of it , didn't want to lose shop as customer. 

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Have a new boat coming and will need to rig it.  Items I’m looking at for electronics and trolling motor have been out of stock/back ordered from most vendors.  Kept looking for weeks-if items came into stock usually gone in a few hours/days.  Price MSRP.  Did get the TM I wanted on a one day credit card offer of 10% off.  Did find an in stock fish finder that I wanted for my main unit- still looking for a chart plotter 2nd unit to network.  Not looking forward to finding all the pieces to put this boat together.  I expect prices to be higher and the sales/deals few and far between.

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2 hours ago, Rookie Fisherman said:

It is called MAP pricing "Minimum Advertised Price"

This is the minimum price set by the manufacture that a specific item can be advertised at. Perfectly legal.

It is up to the retailer if they want to ultimately want to sell it for less or not.

It is not up to the retailers in many cases , if the MFG sets the bottom line as  the " MAP " and you go lower they will stop selling you that product if caught doing it. They can be creative and for example if you buy a certain MFD they will throw in free installation or some much lesser priced item but that MFD is still sold at the MAP number. As I said before,not all MFGs care what there product is sold for as long as they are getting paid by whomever. It's a calculated risk dependent on what products they are selling and how fast they are flying off the shelf  or not.

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Manufacturers cannot dictate the selling price. That's a federal offense; HOWEVER, as part of your dealer or distributor agreement (aka "contract") they may dictate that you only advertise a certain price. 

 

Take for example, TRACKER boats.  I sold many, many TRACKER boats for less than the nationally advertised price. It will be interesting to see what happens with Ranger now that they have put a lowball nationally advertised price in the BassPro catalog. 


Ranger always had the opposite problem, they loaded dealers with inventory and then the dealers needed to move them cheap. If you were a new Ranger dealer you were always competing with dealers giving them away.

 

Chuck

 

Edited by Chuck Smth
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A single manufacturer can set the price for their product. That's what capitalism is all about.  A single manufacturere can sell their product to a distributor in NY at one price and to a distributor in Florida at another price.  He can sell to a high volume distributor at one price and to a low volume distributor at another price. (That's tier pricing or incentive pricing & it's perfectly legal)  Each distributor has a territory.  Distributors very rarely cross territorial lines.  (MFG will get PO'd & they do police that)  Only the very largest retailers can buy direct from the large MFGs and they don't want to lose their pricing deals with the MFGs so they go by the MFGs sell price.

 

It's when competing mfgs,, competing distributors, or competing retailers get together and set the price that it's price fixing.  Price fixing is very hard to prove as there is generally no "paper" trail.  

 

When you search for a product, they generally ask you to pick a nearby store or enter your zip code.  Surprise....they know what the product sells for in your area & that's what you get.  Another surprise, even if you have you location hidden, or run a VPN, they still know where you are and what you searched for.  (that's why you may get pop-ups 3 days later)  BUT the funny thing is...they know the general area where you are just by clicking on the site!  ("computer, browser, server talk", "IP exchange")  It takes a couple seconds to load a site....why??....(It's not because of switching or relaying)  .More & more criminals get caught every day that way.

 

If you find a lower price than what most are advertising for, then check it out real well, it may be missing something.  i.e a feature: a carrying case, a different connector, a different warranty, a different range etc, 

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On 12/28/2021 at 10:15 AM, LongLine said:

A single manufacturer can set the price for their product. That's what capitalism is all about.  A single manufacturere can sell their product to a distributor in NY at one price and to a distributor in Florida at another price.  He can sell to a high volume distributor at one price and to a low volume distributor at another price. (That's tier pricing or incentive pricing & it's perfectly legal)  Each distributor has a territory.  Distributors very rarely cross territorial lines.  (MFG will get PO'd & they do police that)  Only the very largest retailers can buy direct from the large MFGs and they don't want to lose their pricing deals with the MFGs so they go by the MFGs sell price.

 

It's when competing mfgs,, competing distributors, or competing retailers get together and set the price that it's price fixing.  Price fixing is very hard to prove as there is generally no "paper" trail.  

 

When you search for a product, they generally ask you to pick a nearby store or enter your zip code.  Surprise....they know what the product sells for in your area & that's what you get.  Another surprise, even if you have you location hidden, or run a VPN, they still know where you are and what you searched for.  (that's why you may get pop-ups 3 days later)  BUT the funny thing is...they know the general area where you are just by clicking on the site!  ("computer, browser, server talk", "IP exchange")  It takes a couple seconds to load a site....why??....(It's not because of switching or relaying)  .More & more criminals get caught every day that way.

 

If you find a lower price than what most are advertising for, then check it out real well, it may be missing something.  i.e a feature: a carrying case, a different connector, a different warranty, a different range etc, 

I'm listening to this guy!

 

By the way, here's my comedic take on all this ... with supply shortages on virtually everything ... I wouldn't be too excited about finding deals ... people are paying PREMIUM to get stuff. Just be happy if you can get your hands on decent product.

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On 12/28/2021 at 10:15 AM, LongLine said:

Each distributor has a territory.  Distributors very rarely cross territorial lines.  (MFG will get PO'd & they do police that)  Only the very largest retailers can buy direct from the large MFGs and they don't want to lose their pricing deals with the MFGs so they go by the MFGs sell price.

In my personal experience, dealer agreements in the marine business often aren't worth the price of the paper they're written on.  I've seen manufacturers break their own territory agreements. I've had a boat manufacturer's factory rep. send a customer from my territory to another dealer out-of-state and lost a deal because of it.  That's after spending beaucoup dollars as a dealer to stock, advertise and promote their boats. 

 

As far as pricing, you cannot dictate a selling price. As I noted earlier, that's a federal offense (Sherman Act) and you can have a very expensive slap on the wrist for that, along with a lot of bad press. 

 

All IMHO, YMMV, that's cool. 

 

 

 

 

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Some good points. It all boils down to what you feel the deal that you got is good or bad. Regarding price fixing, manufacturers can set price. Take Orvis. They set a price for all of the dealers unless that has changed. When dealers get together and fix pricing on specific products then you are in some illegal territory.  That however is not a manufacture issue. I’ve come to learn that when you haggle so much to get the lowest price you end up paying much more for items that are not on the bill, like service, repair or warranty etc.  just my take. 

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An MFG can set the price as the OP is finding out.   The Sherman act doesn't apply in this case as he could still go buy another type of device with upgrade from a different MFG.

 

It doesn't apply to the boat sale event either as the two dealers  either received different pricing from the MFG (i.e: volume pricing) or are working on different OHs, margins, etc. 

 

Where the Sherman Act would apply is if these were the only boat dealers in the area and they got together and said that their boats must cost $X.

 

 

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  • 2 weeks later...

Well here’s the final word on the subject. Pay the price or do without 

 

Legal Status of Minimum RPM

In 1911, the U.S. Supreme Court held that minimum RPM arrangements are per se illegal when a manufacturer agrees with retailers on a minimum retail price.[19] A loophole was created in 1919 when the Court allowed manufacturers to unilaterally impose minimum RPM, provided there was no agreement with retailers. In what is known as the “Colgate Doctrine,” the Court noted that antitrust law, in particular the Sherman Act, “does not prevent a manufacturer engaged in a private business from announcing in advance the prices at which his goods may be resold and refusing to deal with wholesalers and retailers who do not conform to such prices.”[20] Passed in 1890, the Sherman Act was the first U.S. federal antitrust statute.  It was designed to promote competition by limiting the monopolistic restraint of trade and certain types of monopolization of markets.

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I've always had good luck on eBay with my gear. Setup daily reminders for the specific model #s you're looking for and be patient. Usually with some time time you can get a new or open box unit for 20-35% off. Just bought a 7" helix gps g3n unit for $425 this week. Just be ready to pull the trigger quickly when you're item comes up!

Sean

Sent from my moto g stylus using Lake Ontario United mobile app

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I am one of the largest marine electronics dealer/installers on Lake Ontario's South shore I will put my $.02 in. In order to sell most companies high end stuff dealers have to sign a re-sellers agreement not to advertise below Manufacturers Advertised Pricing (MAP). More and more electronics companies have gone to this. This gives the brick and mortar vs the internet dealer the same shot at business in my opinion and puts everyone on the same playing field. Mark up on these electronics is HORRIBLE as it is. That being said with our install business at the marina we sometimes can discount items since we have the service business to go with the sale of the product. I can also go to a trade show, like the Niagara Outdoor Expo, and sell for whatever I want there as long as I don't advertise it. We had over $200,000 in product (cost not retail) that we were bringing to that show. I still have a lot of that product on an order, which most has been tough to get your hands on. If anyone's interested I will have that order sometime in mid February.

 

To the original posters comment if it was illegal I would think these big companies legal teams would not let them do it, but everyone of them do it. It's been this way for many years. Also, if you PM me and tell me what you want I can see what I can do for you.

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2 hours ago, Yankee Troller said:

I am one of the largest marine electronics dealer/installers on Lake Ontario's South shore I will put my $.02 in. In order to sell most companies high end stuff dealers have to sign a re-sellers agreement not to advertise below Manufacturers Advertised Pricing (MAP). More and more electronics companies have gone to this. This gives the brick and mortar vs the internet dealer the same shot at business in my opinion and puts everyone on the same playing field. Mark up on these electronics is HORRIBLE as it is. That being said with our install business at the marina we sometimes can discount items since we have the service business to go with the sale of the product. I can also go to a trade show, like the Niagara Outdoor Expo, and sell for whatever I want there as long as I don't advertise it. We had over $200,000 in product (cost not retail) that we were bringing to that show. I still have a lot of that product on an order, which most has been tough to get your hands on. If anyone's interested I will have that order sometime in mid February.

 

To the original posters comment if it was illegal I would think these big companies legal teams would not let them do it, but everyone of them do it. It's been this way for many years. Also, if you PM me and tell me what you want I can see what I can do for you.

PM sent 

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