MAP and MSRP practices of online resellers - Page 6

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Vad

#51: Post by Vad »

Yes, we here, in Europe, have the same problems as original poster. Only with US products, being 2x more expensive than they are over the ocean. It is sometimes even so ridiculous, that it pays off to buy a plane ticket, fly to New York, buy the stuff there, and fly back with it. And one still saves some money.

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HB
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#52: Post by HB »

Ken Fox wrote:And, the huge majority of the other French workers out there who enjoy perks such as Dan describes (many weeks of vacation; health insurance, etc.) are probably somewhat less enthusiastic about their quality of life as Dan seems to have been satisfied with his.
I joked with my French hosts that a satisfied Frenchman was in an unnatural, unsustainable state. One only has to watch a few French films to see there's a grain of truth in this jibe. :lol:
Dan Kehn

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Ken Fox

#53: Post by Ken Fox »

Vad wrote:Yes, we here, in Europe, have the same problems as original poster. Only with US products, being 2x more expensive than they are over the ocean. It is sometimes even so ridiculous, that it pays off to buy a plane ticket, fly to New York, buy the stuff there, and fly back with it. And one still saves some money.
I used to regularly buy French-made stuff during my long trips in France, bringing the stuff back home because it was a lot cheaper than the same items in the states. With current exchange rates I no longer do this since most everything in France is frightfully expensive when compared to similar stuff available in the U.S.

Most everything in France seems now to cost about 2x as much as the same items sell for in the States. The only items I bring back from these trips now are things with other added value (to me), such as a set of engraved steak knives I bought this last trip that came from my favorite restaurant in France. I'll think of the restaurant each time I use those steak knives, but were it not for those sentimental values, I would not have bought the knives at all.

ken
What, me worry?

Alfred E. Neuman, 1955

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iginfect

#54: Post by iginfect »

When I lived in France over 2 decades ago, I would buy my Italian made bicycle parts in the US as they were cheaper here than in either France or Italy due to the "TVA"- value added tax.

Marvin

Espin

#55: Post by Espin »

Back in the olden days when I worked retail (at a small independent shop), we really liked MAP.

It meant that we (as a local retailer) had a half a chance of getting the customer's business.

Numbers out of nowhere department:

ABC corporation obviously gives volume discounts. If you buy by the piece, you get one price. If you buy by the case, you get 10% lower than that. If you buy by the pallet, you get another 10% off. If you buy by the intermodal shipping container, you get another 10% off.

MAP was always above the per-piece wholesale price. That way, when a potential customer came in with a magazine advertisement from some firm out of New York City that bought by the shipping container and sold mail order (not having to maintain a showroom), we could say "we can match their advertised price", and we didn't lose money. We could move around some prices, we could put together package deals, we could provide splendid customer service, we could reinvest in the local economy, and we managed not to lose our shirts (for the most part). (We still had a few problems because mail order places weren't charging sales tax, but we had to - and most customers conveniently forgot that they were obligated to report their untaxed purchases and pay the appropriate use tax on them.)

Manufacturers sell to dealers (or distributors), not individuals. Protecting the dealer network is in the interest of the manufacturers - dealers write the checks to manufacturers.

Honoring MAP means that you can select a vendor based on the quality of service they provide, rather than on which one has managed to cut the most corners to reduce overhead to the point where they can afford to sell it for 6% over wholesale.

Showrooms, service departments, toll free numbers, and expertise are not free.

Now, putting my rant back on topic: you'll enjoy your coffee more if you don't have a headache from fighting the system to save a dime.

Ken Fox

#56: Post by Ken Fox » replying to Espin »

Reading this one could get the impression that the government has some sort of vested interest in the quality of service that an independent purchaser gets from a merchant when he or she buys some particular good, and further, that it is in the interest of the government to promote one sort of merchandising model (such as a small independent shop) over another, such as a big box retailer or other sort of "category killer" merchant.

I would submit that there is room in the marketplace for merchants who provide real service (at a price) and for those who provide almost no service in exchange for better pricing. I live in a small resort type community where outdoor recreation is the most popular way to spend your free time. As such, we have a lot of sporting goods stores selling every sort of outdoor oriented piece of equipment you can imagine, such as high end bikes, skis, snowshoes, hiking boots, backpacks, and everything else. I would never think of buying a bicycle or a pair of skis by mail order, because I value the service I receive from my favorite merchant(s) when using this sort of equipment regularly. On the other hand, I have yet to receive any sort of useful service on the purchase of a pair of hiking boots or a backpack, regardless of price, so I buy this sort of stuff on the internet for half price (or less).

Why it would be in the interest of the government to push me towards any particular sort of retail transaction, or to favor the employees of some small local shop over those working for an internet business, is beyond me. I think the government has enough things it needs to do which it is not doing, that we should not be wasting our time or the time of government agencies to be getting in between willing parties interested in buying and selling, whatever are the terms that they can agree upon.

The producer of high end goods (the sort that mfrs. want to control pricing of) can choose who they sell their merchandise to for resale. Walmart does not sell Gucci products nor those from Mazzer the last time I checked. If these manufacturers are unable to control the behavior of the businesses they sell to, then they need to select their resale merchants better. It is not in the interest of the government, in my opinion, to get in the middle of these transactions, enforcing any sort of pricing, for any reason.

ken
What, me worry?

Alfred E. Neuman, 1955

Espin

#57: Post by Espin »

Ken Fox wrote:Reading this one could get the impression that the government has some sort of vested interest in the quality of service that an independent purchaser gets from a merchant when he or she buys some particular good, and further, that it is in the interest of the government to promote one sort of merchandising model (such as a small independent shop) over another, such as a big box retailer or other sort of "category killer" merchant.
Last I checked, MAP is a contract term between manufacturer (or distributor) and dealers. It's a way of saying "sell it for whatever price you want, we won't twist your arm - but be quiet about it, don't shout from the mountaintops that if someone buys it from you, they'll save 40% over their local dealer."
Ken Fox wrote:The producer of high end goods (the sort that mfrs. want to control pricing of) can choose who they sell their merchandise to for resale. Walmart does not sell Gucci products nor those from Mazzer the last time I checked. If these manufacturers are unable to control the behavior of the businesses they sell to, then they need to select their resale merchants better. It is not in the interest of the government, in my opinion, to get in the middle of these transactions, enforcing any sort of pricing, for any reason.
... and that's what MAP does. The manufacturer (or distributor) enforces MAP, not the government. If you advertise below MAP, expect not to receive any further shipments. It's not because the police show up and confiscate your inventory; it's because the manufacturer says "We don't think you're playing fair by the terms we laid out at the beginning and we expect everyone to abide by, so we're not going to let you play any more."

A customer is free to try to negotiate a better price, the industry is not colluding to say "nobody will sell Product RQ for less than $873", they are saying "we all agree to not race to the bottom by advertising things for $1 over cost."

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Alan Frew

#58: Post by Alan Frew »

... and that's what MAP does. The manufacturer (or distributor) enforces MAP, not the government. If you advertise below MAP, expect not to receive any further shipments. It's not because the police show up and confiscate your inventory; it's because the manufacturer says "We don't think you're playing fair by the terms we laid out at the beginning and we expect everyone to abide by, so we're not going to let you play any more."

A customer is free to try to negotiate a better price, the industry is not colluding to say "nobody will sell Product RQ for less than $873", they are saying "we all agree to not race to the bottom by advertising things for $1 over cost."
Which is, interestingly enough, flat out illegal in some countries, Australia being one of them. Refusing to supply a reseller because you don't like their prices is called "Abuse of Market Power" and has resulted in humongous fines for companies stupid or ignorant enough to try it. In fact, the whole MAP and MSRP thing is illegal here. A wholesaler is allowed to Recommend a Retail Price (RRP) but is not permitted to enforce it in any way.

Alan

da gino

#59: Post by da gino »

Alan Frew wrote: In fact, the whole MAP and MSRP thing is illegal here. A wholesaler is allowed to Recommend a Retail Price (RRP) but is not permitted to enforce it in any way.

Alan

Our MSRP is your RRP isn't it? (suggested retail vs recommended retail).

Espin

#60: Post by Espin »

Alan Frew wrote:Which is, interestingly enough, flat out illegal in some countries, Australia being one of them. Refusing to supply a reseller because you don't like their prices is called "Abuse of Market Power" and has resulted in humongous fines for companies stupid or ignorant enough to try it. In fact, the whole MAP and MSRP thing is illegal here. A wholesaler is allowed to Recommend a Retail Price (RRP) but is not permitted to enforce it in any way.

Alan
Fascinating. I enjoyed learning about that one.

http://www.accc.gov.au/content/item.pht ... enance.pdf

I've heard anecdotal evidence that there are ways around it, like the distributor/importer/manufacturer may pay for your advertising provided the advertising is in compliance with their MAP policy. (Businesses surfing the grey area of legality in search of profit? Never.)

It's probably just a fundamental difference in philosophy - Australia seems to be focused on the rights of the individual in this case, where the USA seems to be focused on letting big business do what it wants.