Could be trouble for leisurepro and others

[2 Big 2 Fail]

Is this correct? You (The LDS) could not purchase the SP or AL product at a cost that was lower than what was sold retail on the internet? If this is the case then there must be tiered pricing for dealers and the online dealers must have huge buying power of that SP or AL product.

I don't know how much of a factor it is in this field, but I have to assume that it's not unlike others where it's not always a matter of quantity discounts. There can be offers to include some quantity of other product free or very cheap. Buy three camera bodies that retail for $400, get $50 bags free, for instance. The bags have a huge wholesale markup. Good profit for the wholesaler, BUT he won't sell them, anyway, unless the shop sells some bodies. For the shop, by selling the freebees at total profit, effectively, all that cash comes off the main product cost. There's usually some relationship between the two, so that the freebee one is something you're likely to sell along with the main because you can offer it cheap.

And there's also a matter of how aggressively your sales rep goes to bat for you, which he naturally does more vigorously when you're a good account. And, of course, if wholesale price of something happens to rise, and you're a big retailer who stocks a bunch of everything, you go for a while selling products you bought low, while the small stores sell product they bought higher. And, along the same line, since you stock a lot of everything, you go on for a good while being able to offer discontinued and cheaper (but perfectly fine) products that the LDS likely sold out of.

It can get kind of like the fast food business. It only looks like they're in the business of selling hamburgers and fries. They're in the business of moving money for float, etc., owning real estate, etc., very much larger and very much longer term issues than getting paid Tuesday for hamburger today.

 

[tardmaster]

Is this correct? You (The LDS) could not purchase the SP or AL product at a cost that was lower than what was sold retail on the internet? If this is the case then there must be tiered pricing for dealers and the online dealers must have huge buying power of that SP or AL product.

That was exactly the case. The prices are always tierd from every manufacturer. that being said, the was still a price level that was supposed to be rck bottom fOR EVERY retialer......online or not. That price was told to us that NOBODY would be allowed to advertise and sell cheaper than that. Lesiure Pro always beat that price that was told to us AND THAT PRINTED IN OUR CATALOGS. we were such a small store in a small market (but it was our home town) we could not afford to keep huge inventory. We we having classes every month with new and repeat students, trips were good size and often, but most people shopped on line to save the extra dollar.

 

[djcheburashka]

Let me point something out here. I'll try to get it close to correct. Do not interpret the SCOTUS decision as necessarily an indication of how the Supreme Court would have decided the issues in the case. They simply failed to overturn the 9th Circuit. While that certainly works in favor of the manufacturer in this case, it's not an agreement that the verdict was correct on the merits.

Unless there is a fundamental Constitutional question, it common for the Supreme Court to refrain from interfering with lower federal court decisions, even if most of the justices would have ruled differently from the federal district court where the case was tried. The Court's role in this sort of case is to settle an issue when two federal circuits have taken clearly contrary positions, which hasn't happened here. . . .

Sigh...

I won't attempt to correct sweeping number of misunderstandings bandied about in this forum with so much misplaced confidence. Nearly everything that "2 Big 2 Fail" said was not just wrong, but so egregiously, outrageously, ridiculously awfully wrong, I feel compelled to set a few things straight:

1. The Costco decision was upheld 4-4. Justice Kagan abstained from the case. So there was no majority. Neither side "won" in the Supreme Court. It was a tie. The Court's job is to "declare the law," to tell us what the law is. A tie means the Court failed to declare the law. When that happens, the lower court decision stays in place as if the Supremes had failed to hear the case at all. Because while they heard it, they failed to decide it.

2. People seem very confused about why this was a copyright case. That's because it wasn't at all clear that this actually *is* a copyright case. The issue presented to the Supreme Court was a narrow legal issue that presumed the existence of a valid and enforceable copyright.

3. *IF* LP is purchasing goods from licensed distributors overseas and reimporting them here, it isn't at all clear that the manufacturers could do anything about it. There are antitrust laws in the United States and Europe that generally restrict the ability of manufacturers to control the ultimate price charged by retailers. In the United States this law is currently in flux. But European antitrust law is not the same as American antitrust law. It very well might be the case that the manufacturers *can't* cut-off distributors who resell goods to LP.

(Good, in my view -- I support LP.)

 

[tardmaster]

Sigh...

I won't attempt to correct sweeping number of misunderstandings bandied about in this forum with so much misplaced confidence. Nearly everything that "2 Big 2 Fail" said was not just wrong, but so egregiously, outrageously, ridiculously awfully wrong, I feel compelled to set a few things straight:

1. The Costco decision was upheld 4-4. Justice Kagan abstained from the case. So there was no majority. Neither side "won" in the Supreme Court. It was a tie. The Court's job is to "declare the law," to tell us what the law is. A tie means the Court failed to declare the law. When that happens, the lower court decision stays in place as if the Supremes had failed to hear the case at all. Because while they heard it, they failed to decide it.

2. People seem very confused about why this was a copyright case. That's because it wasn't at all clear that this actually *is* a copyright case. The issue presented to the Supreme Court was a narrow legal issue that presumed the existence of a valid and enforceable copyright.

3. *IF* LP is purchasing goods from licensed distributors overseas and reimporting them here, it isn't at all clear that the manufacturers could do anything about it. There are antitrust laws in the United States and Europe that generally restrict the ability of manufacturers to control the ultimate price charged by retailers. In the United States this law is currently in flux. But European antitrust law is not the same as American antitrust law. It very well might be the case that the manufacturers *can't* cut-off distributors who resell goods to LP.

(Good, in my view -- I support LP.)

I'm not disputing anything you've said here. What I am saying is that I KNOW what our prices were from our rep. They were all published in their catalogs. On the very same item or items, "LP" had advertised prices cheaper than our purchase prices. Even on some of the gear in which our reps were telling us that "NO RETAILER" would be allowed to sell at a cheaper price that what we've just quoted you. That doesnt make "LP" the bad guy. It just sucks for the "small local dive shops" who can't compete with "LP's" prices. Something is fishy here.

 

[Kiwi303]

Sounds very messy, Here in New Zealand, the law specifically ALLOWS parallel importing.

So take for example, Black and Decker, the electric saw and drill makers, they decide that they will only ship 5 out of of product line of 9 different tools to New Zealand, to be sold through authorised retail dealers and wholesale distributors for a MSRP price that the Black and Decker head off sets and distributers may not sell below. Maybe they think that the other 4 tool in that product line would sell too few to make the training at the repair centres or keeping stock on hand to cover warranty replacements economic.

Now suppose a non-authorised hardware store chain sees a market gap that can be filled by one of those 4 un-imported black and decker tools, or simply sees the authorised retailers selling so many black and deckers they want to get in on the action. The New Zealand Black and Decker Wholesale distributors refuse to supply the hardware chain since they are not an approved retail chain for B&D. Much like Costco for Omega. So the company heads to Germany (240V 50hz just like here, can't import US 110V 60Hz) and buys bulk lots of tools from Walmart Germany retail for less then B&D NZ's wholesale price (ain't economy of scale grand), ship them to china to have the german plugs cut off and NZ plugs moulded on and reboxed in English rather than German. and shipped to NZ where they get stocked on the shelves.

All perfectly legally, so long as they follow the provisions of the Parallel Import act which mandates having stock on hand to cover warranty replacements for the length of the warranty period after sales are discontinued, training repair techs etc.

Total bypass of this whole Costco vs Omega kerfluffle since it is granted provision in law to permit and regulate parallel imports.

 

[scubalover1960]

The problem is Leisure Pro isn't a brick & mortar business, so in the event you allow the proliferation of gray market goods to force your local dive shop to go under, who does your service and where do you get air????? Besides, I would be willing to bet you first got introduced to the Aqua Lung products in a B&M shop anyways....

A good comparison of control is Apple products. They control price worldwide - period.

 

[redacted]

The problem is Leisure Pro isn't a brick & mortar business, so in the event you allow the proliferation of gray market goods to force your local dive shop to go under, who does your service and where do you get air????? Besides, I would be willing to bet you first got introduced to the Aqua Lung products in a B&M shop anyways....

A good comparison of control is Apple products. They control price worldwide - period.

Perhaps it will be the same place divers found service and air (and training) before the proliferation of inefficient LDSs with their owners and employees almost the only ones blowing that LDS horn.

Are you the owner or the employee?

 

[parzdiver]

The problem is Leisure Pro isn't a brick & mortar business, so in the event you allow the proliferation of gray market goods to force your local dive shop to go under, who does your service and where do you get air????? Besides, I would be willing to bet you first got introduced to the Aqua Lung products in a B&M shop anyways....

A good comparison of control is Apple products. They control price worldwide - period.

Actually LP is a brick & mortar shop in NYC. You can walk in, talk to someone, try on gear, make a purchase just like any other store. They are also authorized dealers for many of the product lines they carry.

I have a very successful shop near me and one of the reasons they are successful is because the owners understand the reality of the "Internet economy." They are very helpful at the shop and will work with you on pricing. They make in house sales because they have a great sales team and great prices.

I have another shop by me run by a grumpy guy who isn't very helpful, has very little in stock and sells only at MSRP. I am completely amazed he is still open.

 

[tardmaster]

Actually LP is a brick & mortar shop in NYC. You can walk in, talk to someone, try on gear, make a purchase just like any other store. They are also authorized dealers for many of the product lines they carry.

I have a very successful shop near me and one of the reasons they are successful is because the owners understand the reality of the "Internet economy." They are very helpful at the shop and will work with you on pricing. They make in house sales because they have a great sales team and great prices.

I have another shop by me run by a grumpy guy who isn't very helpful, has very little in stock and sells only at MSRP. I am completely amazed he is still open.

once AGAIN.....i have no problem with competition. I also have no problem with a volume store offering a bigger discount. What I DO have a problem with his a rep telling me that NOBODY is allowed to sell this particular product for anything lower than $x.xx and then you see it on LP cheaper than that. sure maybe it's the rep that is lying. I don't know and by now it's a moot point. Our shop has closed it's doors.

 

[BB1]

It is well known that the 2 big suppliers have extremely restrictive business models.

I, as an informed purchaser, will not buy any products from them AT ALL!!!

If it makes you so unhappy why not change product line, break out of the old school LDS model and do something different??

LDS's that want to stay the same will slowly die out, those that recognise the world is changing and adapt their business model accordingly will thrive!

I'm in Australia but my LDS is in Illionois, a brick and mortar dive shop very well known that give me excellent prices AND excellent service. I win and they get a loyal customer and therefore they win as well.

Easy to through blame around but these forum threads aren't new - make a positive change and get some loyal customers!

Good luck

once AGAIN.....i have no problem with competition. I also have no problem with a volume store offering a bigger discount. What I DO have a problem with his a rep telling me that NOBODY is allowed to sell this particular product for anything lower than $x.xx and then you see it on LP cheaper than that. sure maybe it's the rep that is lying. I don't know and by now it's a moot point. Our shop has closed it's doors.