robzr:Isn't MAP == Minimum Advertised Price? IE they can sell at whatever they want, they just can't advertise it.
Rob,
MAP is only part of the problem, as manufacturers such as ScubaPro set a MAP and, through the terms of their dealer agreements, prohibit dive shops from discounting beyond a certain percentage. From what I have heard, in the case of ScubaPro dealers, they are not allowed to discount ScubaPro gear more than 10% below MAP.
The reason the manufacturers use MAP and discount restrictions is an attempt to level the playing field between dive shops. Larger shops are able to buy from the manufacturer at a bigger wholesale discount due to the volume of the merchandise they move. This gives the larger shops an inherent advantage in being able to discount below the MSRP. MAP and discount restrictions take this advantage away by requiring them to sell at the same retail price. In essence, what this gives the larger dive shops is an increased profit margin.
If you really look at these policies, you will see that this is where the gray market fits in. Smaller shops will buy more merchandise in order to qualify for volume discounts, but rather than keeping this merchandise in inventory, they turn around and sell it for a small mark-up to a gray market seller like Leisure Pro. Since Leisure Pro is not subject to the manufacturer's dealer agreement, they can sell the products for whatever price they want.
If the manufacturers wised up and got rid of outmoded policies like MAP and discount restrictions, they would essentially dry-up the product flow to the gray market. Their policies are the ones that allow the gray market to exist, which is why I really don't think it matters to them that places like Leisure Pro stay in business. After all, the manufacturer is making the same amount on a piece of gear that is sold through Leisure Pro as they do on one that is sold through one of their authorized dealers.