FTC Followup - OK Dive shops, who's upset?

[Genesis]

Hi folks.

As some of you know, I posted here a couple of weeks ago a letter I sent to the FTC about the apparently-common practice in the industry of specifying "maximum discounts" from MSRP on scuba equipment - a practice that I believe may violate anti-trust law.

The FTC has responded. They have asked me for any documentation that I have of such policies, and have promised that their litigation staff will review anything I can provide them.

I already have some documentation, and am forwarding it.

Ladies and Gents in the LDS business, here's a potential chance to be freed from these covenants - if you want to!

Are you interested in being able to set your own prices? Are you interested in serving the consumer?

Good question, eh?

If you are, and if you have in your possession any authentic dealer "terms" documents detailing price restraints (e.g. "no sales at more than 10% off MSRP") I would like a copy.

I will forward it to the FTC.

Willing to try to get things changed?

Send me a PM here, tell me how to get ahold of you (phone number, name of shop, etc) and I'll call you - my dime - to chat a bit and give you a fax number to forward a copy over.

Let's see how many dive shops are tired of being restrained in their pricing, and how many - if any - are complicit!

 

[chrispete]

Just beware of any potential non-discosure agreements out there, although I'd guess that a plain white envelope with no return address and all the LDS's info erased would kinda be untraceable, wouldn't it?

 

[Genesis]

then the LDS couldn't tell you what is in there - but they all do if you press them on the reason for no discounting....

I suspect all the FTC wants at this point is enough information to determine if there is a reason to start issuing subpoenas. They can get whatever they want if they get a wild hair up their backside via subpoena; subpoenas pierce NDAs regularly.

Trying to hide behind an NDA if you get subpoenaed can be dangerous. If the reason for the NDA is to keep secret the subject of the subpoena you're asking to get in a LOT of trouble with a grumpy judge...

LDS's willing to be named are great (I'll pass along any names and phone numbers of people who WANT to be named), but unnamed sources are also fine.

I'm not looking to file a case here, just supply information that I was asked for to a government agency. If THEY turn it into a federal case (literally) they can compel production of whatever they want from whoever they want; at that point I'm a spectator anyway.

 

[Spectre]

Genesis once bubbled...
Trying to hide behind an NDA if you get subpoenaed can be dangerous. If the reason for the NDA is to keep secret the subject of the subpoena you're asking to get in a LOT of trouble with a grumpy judge...

Every NDA I've had to sign in the past had a clause regarding authorities and aiding in investigations of illegal activities. Given that no one would want to tell you that you can disclose their illegal activities, I've always assumed that it was required to be in there...

*shrug* I've got a folder in the office with a few of them in there... I'll have to re-translate the legal mumbo-jumbo and give a better response.

But yes, Genesis is correct, you can't hide illegal activities with NDA agreements...

 

[chrispete]

Happens all the time I'm afraid, Time Warner sued an ISP for $50,000 (and won) for releasing their contract to the press in which they blatently had ignored the "free and open access" ruling that had been passed down from the govt regarding boardband (i.e. cable modem) access.

sigh...

 

[MikeFerrara]

Don't you get low enough prices now? The manufacturers are doing great and so is the consumer. Unless someone is interested in changing the way we are restricted as far as what we sell or service, who cares. Until dive shops are allowed more latitude in what they can offer prices at the lds will not go down. I don't see anyone interested in the mechanics of the lds business so I don't think anything meaningful will be done. When you can buy a reg as cheap as I can what do you care what I charge for one, especially given the fact that I can't sell them anyway. I have sold THREE regulators this season. I can only carry a couple of brands and I can only service a couple of brands so...I can only do business with those who want and own those brands. The price I am forced to ask is based on the costs I have vs the volume of business I do. Large costs and low volume = high prices, PERIOD.
If the manufacturers are doing a dis-service to the consumer, it has nothing to do with price fixing. there are lots of things being done that I see as unfair trade practices but I don't know that any law is being broken.
Read my last post in the BC section. The thread about why more lds's don't carry bp/wings.

 

[Genesis]

and going to the government are two VERY different things.

 

[ivansie]

I am new to the forum but in the time I had spent surfing around I have read a lot arguments, opinions an debates about the LDS, Online, etc,etc situation. I am no expert in the diving industry but in my book the rules of economics and business are pretty similar for all industries independent from how vertical or horizontal the market composition is. Everything has a value and its the right and duty of the consumer determine how much that premium is, not the manufacturer nor the retailer, brick or mortar or online and that is because thats the way capitalism works.

For me is simple and everybody should answer the question honestly. Do you pay MSRP when you get a new car? sometimes you dont even want to pay invoice. Would you buy it online? this days ebay is selling more cars than anybody...
Do you pay retail for designer clothing or you wait until they come up with a 60% day of the turkey sale? or better go to the outlet and get it for 50% off.

So why should this same person, this same consumer that does not pay MSRP for cars, clothes, appliances,etc pay top dollars for a "product" in this case diving equipment???

The LDS has some advantages and value to add but at a decent markup, in my case I dont mind paying up to 15% more for the convenience, the face, the peace of mind, etc, etc and in a $2000 purchase that 15% is $300.......;-0 there is a lot I could do with those $300 but its almost fair. Now why should I pay a 50% difference with the excuse of showing support, my responsibility on support is with my family....

So in conclusion, fair premium.......please go to the LDS.......... armed robbery..........look for othe options

take care

 

[wch]

MikeFerrara once bubbled...
Don't you get low enough prices now?

Only if I shop online, and I would rather shop at my LDS.

The price I am forced to ask is based on the costs I have vs the volume of business I do. Large costs and low volume = high prices, PERIOD.[/B]

Nope, you are assuming that volume will remain constant for any given price.

Case in point:
My LDS wanted over $200.00 each on two regs over DiveInn. I would have paid $40.00-$50.00 more each, but not the $200.00+ each. So instead of making the $400.00+ they were asking, the $80.00-$100.00 I was willing to pay, they made $0.00. Clearly they suppressed their volume due to their pricing.

Will they need to make that $200.00 profit on the next reg they sell? Yes, because they figure Large costs and low volume = high prices, PERIOD. And they are correct. But only if they keep forcing their volume to be low. Instead of selling three regs at $200.00 mark up they should be striving for 20 regs at $40.00. You only make a profit on the turn.

It has been a common sentiment on the board that most would be willing to pay a reasonable amount more to shop at their LDS over OLS, but not the silly mark up that our LDS demand.

In defense of my LDS (and Genesis) they say that they can only mark down their regs a max of 10% per SP’s policy. If they really are constrained by such a policy than it is the manufacturer's policy that is limiting their volume.

Bottom line is that my LDS made nothing instead of $80.00-$100.00, and that is not good either for them or me.

Bill

 

[Genesis]

Between three people who I know, myself included.

One bought a COMPLETE KIT online rather than pay their markup. That was a HUGE loss to them - they made $0 off that person instead of a reasonable profit, and it was all over those policies that drove that customer away and to LP instead.

Discarding sales like that will likely eventually lead them to ruin, but heh, unless the LDSs stand up and get involved, they have nobody but themselves to blame.

I, for one, will probably never buy another significant (e.g. reg, BC, etc) item from them. I WILL buy things from them that make sense (e.g. tanks), but its a pure economic decision as far as I'm concerned.

If the LDS's around here want my business, they are going to have to earn it. They can start by being on my side rather than that of the manufacturers, and offering me a good value and a defensible price, rather than one set by manufacturer fiat that they accede to.

They seem to have forgotten who butters their bread - it certainly isn't SP!