Let's see what the FTC has to say about vertical price restraints in the biz.

[Genesis]

The "minimum advertised price" problem doesn't bother me. You can get around that with quoting individually, and refusing to publish a price at all online or in print. Not PUBLISHING a price below $X isn't the problem - its refusing to SELL below that price, and using as justification an agreement between the retailer and distributor or manufacturer not to do so!

The per-se violation of the law happens when you set an MSRP and then tell dealers that they CANNOT sell for less than some number (MSRP, MSRP less some percentage, or just a fixed number) without retaliation being levied against them.

That is a classic case of vertical price restraint, and it is a per-se Sherman Act violation.

We'll see if the FTC takes interest in this - letter (modified to reflect the case law I've found - thanks guys for the pointers) goes out tomorrow!

 

[Aquamaniac]

Genesis once bubbled...
A per-se violation of the law doesn't even require that you make money from doing it to get you in trouble!

My "profit" comment was not related to the post really, it was just a comment about the LDS's in general......a follow up to:

I would like to see if some of the DS owners will respond to this thread. Come on guys, tell us the truth, what is your cut and does the rpice you pay for the gear come close to the prices of some of the online merchants?

Actually Im quite adverse to "price fixing",


Dave

 

[edward_teach]

Genises, it sounds to me like you are P.O.ed because some dive shop would not give you a discount. Your only justification for wanting that discount is that you spent $2000 on your gear, now I do not own a dive shop, but I have worked in a few, and have sold single pieces for more than that.

Manufacturers tell D.S.s not to advertise below a certain price (and that is to keep a level playing field between brand "x" dealers) however I have given up to 50% discounts depending on a number of factors, attitude being the most influential.

Now as you can see frow my list of certs. (below) I can service alot of brands and I can tell you that all you save with the warrenty is about $7 to $20 depending on the brand. That is annually. So lets say that you keep that reg. for 5 years then the warrenty will save you $35. Now, I take that you don't particularly care to support an LDS, so you gotta ask yourself, "would I have saved that much buying on line?" because that is the average amount that divers keep regs

It is your choice as to where you buy your gear. Just don't be suprised when dive shops start, for air fills, $25 PER-SE.

 

[Genesis]

Not at all.

I don't mind paying for service and support. Not in the least.

I very much mind having my options cut off by price-fixing, which happens to be illegal.

It seems that there is quite a history in the Scuba Industry of engaging in price fixing and other tactics that are banned by the Sherman Act. In fact, there is a trade association that appears to have gone down in flames, and had a default judgement entered against them, over EXACTLY this kind of tactic.

Default judgement? You mean they didn't even bother to try to defend themselves against the allegations?

Why's that?

Was it because there was no defense?

Reasonable people might come to that conclusion.

 

[chrispete]

Wouldn't the fact that most of the manufacturers are based in foreign countries also stop the US from being able to do much of anything to stop the price fixing? I would think that if a US company wants to distribute a product made by a manufacturer based in a foreign country that allows price fixing - you have to go along with their set up - the only US entities that would be participating in "price fixing" would be the LDS's themselves (although with the proverbial gun pointed at their heads by the foreign manufacturers through their contracts...)

 

[gentlegiant]

Even if the top level company is not based in the US there is a US arm of the company to handle all US marketing, it would be too expensive to do it another way. The thing to remember is that the companies who are doing this the most are based in the US at least from a business perspective. The manufacturing may be elsewhere and they may own some foreign companies, but the top of the conglomorate is US based. I think there is ample evidece out there to show colusion and price fixing by the several big scuba companies. I think the LDS owners should be the ones setting their prices and keeping a bigger chunk of the profits.

 

[Genesis]

Do business in the US, follow US law (or else!)

Where a manufacturer is based has nothing to do with it....

 

[chrispete]

Well, that's good then, maybe something can be done to help the LDS's in this situation.

 

[Bob3]

Chrispete, you have that backwards; it's in the US that the price fixing takes place, by either the US based manufacturer or the US distributor.
Let's use Suunto dive computers for example.
They're made in Finland/Sweden, you can buy them outside of the US for a whole lot cheaper than what US Divers [the US Distributor] will allow their dealers to sell them for here in the US.
Another example; DUI drysuits can be bought in the UK for hundreds of $$ cheaper than here in the US because the European community frowns on price fixing.

I've had a dive shop in the past, now I do mostly internet / mail order / word of mouth type sales.

Making a buck by running a dive shop is no easy task, though I do tend to agree with the price fixing being on the razor's edge of violating the Sherman anti-trust act by restricting competition.

 

[Lead_carrier]

bob..

Price Fixing...
The reason we can buy stuff made in the USA cheaper overseas is because price fixing is illegal over there.
Check Scubapro, US Divers, DUI prices in the UK lately


Bob, don't forget that in the UK, Europe, etc. they don't have the amount of frivilous litigation the we have here in the US. I can't recall anyone in the UK getting a couple of million dollars for putting a cup of coffee between their legs and then suing because the restaurant didn't warn her it was hot. duhhhh..
In most of the other countries of the world, if you do something stupid thats what it is attribituted to, your stupidity. They do have litigation for real cases. If so many companies were not sued by anyone looking for a quick buck then the true lawsuits wouldn't run prices up so much.