superstar
Contributor
why would that be illegal?
Major Industry Change re: Online Scuba Sales....
- Thread starter PhilEllis
- Start date
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If there is ANYTHING to be learned from this thread, this is it!lamont:
We are our own worst enemy. We give away our most precious commodity: out time.
The bad part is: we know we can't do it this way. Look at the Gander Mountain I talked about earlier. As an instructor, I can set the price we sell classes for as long as they don't fall under $399 (including course materials, online academics, rentals & dives). They have their gear fairly priced, they are serving a non-diving market, and they make SURE the instructor makes enough on each student to make it worth our while. Whenever I mention the amount I make per student, eyebrows go up. At least in Central Florida, there are FEW places who make sure that I am compensated so fairly, especially when you consider that I don't have to teach the academic portion of the class.
How many times do you see "Lear to Dive for $99.00"??? This makes it harder for the whole industry and is misleading at best! Why not charge enough so that your instructor can make a living? Why not advertise the WHOLE cost of the class? That $99.00 class turns out to be over $400 (not including personal gear), but it keeps the entire program mired in "who is the cheapest".
mike_s
Contributor
superstar:
"Price fixing" (or requiring an item to be sold at a fixed price between a vendor and manufacturer) is illegal under the Sherman Act.
That's not really designed for the scuba industry, but for larger markets.
However, Aqualung, Scubapro, etc require that of their vendors as part of the dealer agreement. They dictate that a product can't be sold for more than 10% off the MSRP. It doesn't seem that the trade commissions are that concerned with a few vendors in the scuba industry.
jeraldjcook
Contributor
Manufacturers may set an MSRP, but they cannot force a business sell at that price due to anti-trust regulations. They can however, not sell to manufactures who choose to sell at below MSRP. Makes no sense but that's the law.
mike_s:
It applies to our industry.
However, that being said somebody needs to go "out of pocket" the $$$$$$$$$ to establish case law as it applies to our industry or the fed needs to get worried/involved. With single companies that gross MUCH more in a month than the dive industry does in a year I don't expect the feds to spend alot of time looking at diving...
mike_s
Contributor
jeraldjcook:
Go ask the orignal poster of this thread (PhilEllis) how they tried to force this on him and why he doesn't sell that product anymore....
jeraldjcook
Contributor
mike_s:
I will assume he is no longer selling their product because they will no longer provide it to him. See the second part of my quote. A manufacturer can refuse to sell to anyone who does not wish to abide by a MSRP pricing scheme. If, however, the manufacturer provides the product to that business, they CANNOT force him to sell it at MSRP. Businesses agree to sell at MSRP in order to continue selling/receiving the product. If "scuba brand X" where to provide a local LDS with a shipment of product, the LDS can sell it for whatever they wish. If they ever receive another shipment from the manufacture depends on the price they sell it at. It is a very fine line.
superstar
Contributor
Is this price fixing?jeraldjcook:
jeraldjcook
Contributor
superstar:
No. The Supreme Court dealt with this issue in United States v. Colgate, among others. Manufacturers have a right to name the terms and conditions on which it will provide their product, and one of these conditions can be price. If a business violates the terms of their agreement, the manufacture can refuse to provide their product. They CANNOT however coerce the business to sell at their MSRP and cannot threaten to stop selling to them if they don't comply with MSRP (United States v. Park, Davis & Co.). If the original agreement says "You must sell at MSRP or we will not provide our product," this is not coercion. I apologize if this is unclear, anti-trust law is not my specialty.
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