MARP Price Fixing Update - Consumers Win!

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Off -- you say you want to run your LDS by your business model -- buy why shouldn't AL be permitted the same right -- to run its business by its model? Why should you have a greater right than AL?

Peter is right on this. We all want complete freedom to buy the best products at the lowest price with a lifetime warranty and unparalleled customer service. But how much are we willing to pay for it? What will you as the consumer, be willing to give up in order to get a lower initial purchase price?

As a car dealer and at one time a Saturn retailer, I'll relate a short story.
Saturn newly minted MBA's felt sure that customers did not like negotiating for a car. They felt so strongly about this that they put it in the franchise agreement that their retailers would not advertise or negotiate any price but the MSRP. However, we were allowed to negotiate any other aspect of the deal.
Well as it turns out, customers want to negotiate, despite what the surveys said. Now Saturn retailers will advertise and negotiate on their cars but this change in policy comes too late for many retailers.

As it stands, SP and AL both feel that their products deserve to be sold at retail. It is their decision. What they don't control is our decision on what products to buy and from whom. Saturn took too long to figured this out, to their demise and too the demise of many of its retailers.
 
Maybe I'm just a little thick on this but I don't consider what AL and SP do as price fixing. As has already been mentioned the retailers have entered into a contract that has had all of the conditions of dealership spelled out.

If SP, AL, Mares, Cressi, Genesis, etc. all got together and decided that they would each have 3 or 5 different levels of a specific piece of gear and that they would all charge the same price for those various levels ... then I would consider that to be price fixing.

SP & AL have a business model that they feel confident in and wether I disagree with it doesn't matter. If I don't agree with it, then I can choose to spend my money elsewhere from a different equipment supplier. However, if I feel that their equipment is superior then I should also be willing to accept that I may have to pay more because of their business model.

I work in sales and if you look back through history, a low price model will not last. A simple saying that I believe in, "If you got the sale on price, then you can loose it on price too".

I am a firm believer that service and quality should have a premium price and this isn't just on equipment but on the attitude of the LDS's too. If you treat me like crap (or demonstrate complete ignorance by trying to sell me a line of BS, indicating you don't know and aren't willing to admit it) then I'm walking out, doesn't matter what line of gear you do or do not carry.
 
JB:
If the manufacturers feel so strongly about the issue, why do they continue supplying the on-line shops? I am sure a level playing field will be welcomed by all.
They don't keep supplying the on-line shops (they being SP). The on-line shops buy out inventory from stores going out of business. (of which there are many, ironically, partly because of the on-line stores) They also buy "grey market" overseas. France is a big supplier of grey market goods.

Obviously the internet is not going away. However, the scuba industry needs an infrastructure of fill stations to get air. You don't buy your car at the same place you buy gas. But I doubt that divers would be willing to pay what it would actually cost for an independant air-fill station to supply air to the public and also make enough profit to stay in business. You also don't learn to drive at your local Ford dealer. But, again, the diving public is not willing to pay what it would actually cost to learn diving at an independant Scuba School that expects to make a living wage for the staff.

So, the scuba industry relies on a paradigm wherein air fills and training are loss-leaders subsidized by gear sales. I've considered opening a Scuba School that did nothing but high-quality training and provided air. But there is no way I could compete with our LDS that regularly sells Open Water Diver classes for $89 and gives air away free to it's frequent customers.
 
As a car dealer and at one time a Saturn retailer, I'll relate a short story.
Saturn newly minted MBA's felt sure that customers did not like negotiating for a car. They felt so strongly about this that they put it in the franchise agreement that their retailers would not advertise or negotiate any price but the MSRP. However, we were allowed to negotiate any other aspect of the deal.
Well as it turns out, customers want to negotiate, despite what the surveys said. Now Saturn retailers will advertise and negotiate on their cars but this change in policy comes too late for many retailers.

My recollection was also that Saturn had a dealer markup greater than the rest of GM, more akin in percentage terms to BMW. And no negotiation.

So, I don't think you can conclude people want to negotiate. Rather, I would conclude that people want a decent deal and knew they weren't getting one if they paid MSRP on a Saturn.

I don't like to haggle and I don't look around for a rock bottom price. But I do comparison shop to make sure I don't get raked over the coals.
 
When mfg and dealer enters a contract it has a clause in side that says 30 day notice. If the dealer decides that he or she no longer wants to play the price game they just send in the notice.

I am in the trucking industry and if our industry new away to push the government out of our industry the trucking companies would line up for it.

Free Market this is when the consumer actions depict market actions. SP or AL want to sell there product at 3 time cost they have that choice, because their enough choices of same quality gear to buy else where. If enough dealers send that notice then the mfg will take notice and make changes.

For the LDS the other option is sue the mfg for unfair market practices. This so called grey market would not be hard at all to prove that the mfg had knowledge of or directly sold product to the online store and breached there own contract to support the LDS buy selling to online stores.

And for the US economy well!! I just think that Auto mfg all of them should not have gotten a dime nor the banks. Other companies would have been born and taken there place in a shorter time span than this BS government bail out that has only prolonged the fall of some of these companies and the everyday person get to pickup the tab.
 
They don't keep supplying the on-line shops (they being SP). The on-line shops buy out inventory from stores going out of business. (of which there are many, ironically, partly because of the on-line stores) They also buy "grey market" overseas. France is a big supplier of grey market goods.

And others on this very board who I find credible have said the exact opposite. That SP ships direct to LP and denies it to their dealers. LP also seems to have new gear at least as fast as their authorized dealers do, which isn't possible if it worked the way you say it does.
 
My recollection was also that Saturn had a dealer markup greater than the rest of GM,..
In fact, the margins were smaller than that of other GM cars.

I don't like to haggle and I don't look around for a rock bottom price.
And that sentiment is what the MBA's interpeted.
But I do comparison shop to make sure I don't get raked over the coals.
So does everybody else, no matter what they say. Scuba gear is no exception. We all want the best price.
 
Will this action just piss off manufactures causing them to raise their wholesale cost to the retailer thereby forcing the retailer to charge close to MSRP in order to make a 40% profit?
 
They don't keep supplying the on-line shops (they being SP). The on-line shops buy out inventory from stores going out of business. (of which there are many, ironically, partly because of the on-line stores) They also buy "grey market" overseas. France is a big supplier of grey market goods.

And others on this very board who I find credible have said the exact opposite. That SP ships direct to LP and denies it to their dealers. LP also seems to have new gear at least as fast as their authorized dealers do, which isn't possible if it worked the way you say it does.
CatFishBob is pretty much on the mark. The laws in the EU do not allow SP to have as close control of the products they sell to their dealers so dealers in Europe will essentially act as middle men by selling to LP and other on-line retailers.

Some legitmate US dealers will also bulk up their sales volume and/or move a stagnant inventory by also selling stuff to on-line retailers.

In both cases Scubapro could easily monitor on-line sales by buying items and tracking the serial numbers back to the dealer it was originally shipped to and then pull their dealership. But unless a dealer gets real obvious with it or violates other provision of the dealer agreement (Scubatoy's on-line sales is a good example) they don't seem to get involved. That does not make me real happy as it creates an unfair playing field for the honest dealers who follow the agreement.

On the other hand, I am guessing that Scubapro is moving maybe 30% of their total sales through grey market and internet sources, and those internet sources would probably just buy another brand if Scubapro is not available, so I understand their reluctance to stop internet sales and their apparent preference to stay on the fence and just inhibit internet sales at a level that maintains market share but does not sink too many authorized dealers. Again, it is their business model and they should have the freedom to run it the way they want it.

When you consider that most SP products are introduced in Europe before they see the light of day in the US, it is no surprise that on-line retailers have current stock. Even at worst if working with a US dealer ordering extra to sell to LP, the delay that results between the time it hits his shelves and LP's stockroom is only the time it takes to UPS it from the shop to LP - what maybe 2-3 days?
 
The laws in the EU do not allow SP to have as close control of the products they sell to their dealers so dealers in Europe will essentially act as middle men by selling to LP and other on-line retailers.

So, less restrictive business models do work in markets where the laws prohibit practices that occur in the USA. Should we conclude therefore that scuba, in the USA, will not undergo some cataclysmic upheaval should MARP be ended?
 

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