MARP Price Fixing Update - Consumers Win!

[BDSC]

This has been a very interesting thread because I really know nothing about running a retail business and can see both pounts of view here. But I think if I were running a business, I would want the freedom to charge whatever I wanted to the customer after I have paid the manufacturer for the item.

However, I would take exception to this statement in part.

Are the 99% foolish? ABSOLUTELY. Are they to blame? ABSOLUTELY NOT. The 1% knew the 99% couldn't afford these homes all along...

I agree that the 99% are foolish but I also think for the most part, they are to blame. When I bought my first home after I found a job out of college, it was a simple one side of a duplex. I think it was maybe 1200 sq. ft. with two bedrooms and two baths. Nothing fancy at all. And well within my ability to pay. Even though I could qualify and have afforded a bigger home, I was taught by my folks to live well within my means. Then after a few years there, I was making more money in my job and was able to move to a nicer home. Like 1700 sq. ft, with 3BD/2 1/2 baths. Again, well within my means. Finally, about 10 years ago I moved into the house I'm in now. Larger and nicer than all the rest but again, well within my means.

I always knew at the time what I was making and what I could afford without living check to check. I knew when I got the loan what the payment would be. I took on the personal responsibility when I got a loan to pay back that loan.

When I see the national news and it is showing foreclosures, I'm not usually seeing "starter homes" as I would call them. I usually see those signs out in front of fairly nice homes with 2 car garages and probably easily 2000 + sq. ft. Certainly nothing wrong with wanting a nice home. Nothing wrong with wanting the best for yourself and your family. But these people knew what they were making when they got the loan. They knew what the payment would be. I don't believe there was a lot of smoke and mirrows involved. People just wanted too much too soon. I realize there could be a few cases out there that wouldn't fit what I have said and there are always people who have lost jobs with no fault of their own and have lost their homes. I feel bad for these people. But for the vast majority of people who lost homes because of their own form of greed by wanting more than they knew they could afford, i don't feel bad for and put the blame squarely on their shoulders.

Any how we have gotten off on all of this is beyond me but I guess I just wanted to vent.

 

[halocline]

Not sure how "elitist" and "socialist commie" got into this one...you don't by any chance have just a tiny political agenda, do you?

I am interested in the possibility of severing the link between gear sales and diver services such as instruction, service, and air fills. I do think that diver education will vastly improve if it is not tied to gear sales. At least around here, the current model is not working. If it were not for the internet (this site and others) I would be far less educated as a diver and dive enthusiast, and so would most of us.

The main thing is to balance local, 'actual people' type of dive communities with an internet based source of free exchange of information and ideas. I don't think that the failure of current-model dive shops necessarily means the end of the local dive community. It just means that the community is not based on gear purchases.

 

[shoredivr]

Not sure how "elitist" and "socialist commie" got into this one...you don't by any chance have just a tiny political agenda, do you?

After his latest post, I hear the trumpets sounding their clarion call.

 

[JB]

Does this decision also apply to how the retailer is allowed to market the product, ie, can the manufacturer still require the retailer to only sale over the counter and not via mail order/online transactions?

I'd like to see Aqualung and ScubaPro being offered online :mooner:

Well here you are:-
Aqua Lung-Lucas Divestore

Scubapro. Scubastore.com, buy, offers, scuba, Scubapro

http://www.leisurepro.com/Cat/Context_954/Filter_1=445,441/Page_1/Regulators/1159.html

It's all dishonest double speak. Whilst price fixing, they must be supplying "renegade on-line discounters", because they enjoy the profit generated by the volumes, and then try and appease their loyal dealer base, by berating these on-line shops, and kind of implying there is no warrantee, which of course, there is. 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.

Cheers

 

[offthewall1]

To clear it up... I have no local, state or national political aspirations. As an average everyday American... I want the best for us all. I just happen to be an average everyday American who is paying more attention than most average everyday Americans.

If you honestly believe that price fixing should be legal.. and ripping off the American consumer should be legal, the beauty is that here in America you can voice that opinion. My point is to educate my fellow Americans so they can better understand what has been going on. Most people have no concept what goes into a retail price. They complain about a price they consider high and they love to get a bargain when they see a price they think is good.

There is the basic concept of supply and demand together with production costs, transportation costs, quality of raw materials used, product packaging, placement and display, operational costs at three levels (manufacturing. distribution and retail etc...)

What this law does is allows each level to set their price and control their business. The place in China that produces the goods does not dictate to the "manufacturer" what they can sell the product for. There should be no reason to believe the manufacturer should dictate to the retailer what they can sell it for. Each level should set their pricing based on their controls and expenses.

The manufacturers say prices must be set for retailers to secure 'brand integrity." This is just code speak for saying retailers are dummies that don't know how to run their businesses. It is a feeble excuse for imposing unnecessary control in the hopes they can keep as many dive shops open as possible - putting their products in more places. While I can't blame them for that, I can blame them for not seeing the bigger pictures. Lower prices will accomplish the same thing.

My business model has worked. It can work for anyone. By lowering prices we have brought more people into the sport - many who otherwise could not have afforded it in our area. Everyone loves a bargain... and top notch training at fair prices and big savings on equipment is a winning combination for any scuba retailer in the country.

We sell higher volume to more new divers... why? Because more divers create more divers... and divers who save money tell their friends... and our growth is fueled by happy divers who feel good about shopping with us, traveling with us etc... why? Because they know they got a great deal. Great deals fuel the industry... being ripped off... rips the heart out of the industry.

Heart ripping has been going on for too long. The old LDS's days are over. They have worked with manufacturers to price gouge the public and use the protection afforded them to control an entire sport. Too many times in shops I worked in (before opening mine) I saw peoples jaws drop at prices... wasted time helping them only to have them go buy on the internet... and you know what... I took everything I saw wrong - and I have worked and fought hard to make it right.

In my opinion... the only people that hate the Maryland Law are the very shops who have been ripping people off and killing the industry for years. Sitting there laughing as they made insane unearned profit margins. I call them the mafia because that is exactly how they operated. Backroom dealings, holding a proverbial gun to consumers heads, and then lying to them in their faces.

No matter how bad they have been in the past... they have the ability and option to change their ways... change with the times... become legit businesses and make diving fun again for their current and future customers. If they sit back and do the same old - same old, then go out of business they should.

Please, no matter how tempting it may be... don't write me in on the next presidential ballot... I'm not interested : )

 

[PhilEllis]

Ken, I have a question for you. I have looked at your website and reviewed the product lines you carry. Since you are not an Aqua Lung or ScubaPro dealer, exactly WHICH SPECIFIC manufacturers are telling you that you must sell for a certain price at your cash register?

Neither the Maryland (I don't think) legislation nor any legislation currently working through the federal system impacts Minimum ADVERTISING Price, which is the REAL issue that seems to concern divers. While I could be wrong, the Maryland legislation does not overturn the right for a manufacturer to determine WHERE a product can be advertised, so this will not impact the internet/no internet issue.

Again, tell us which manufacturers are telling you what price you MUST sell for in your store?

Phil Ellis
Discount Scuba Gear at DiveSports.com - Buy Scuba Diving Equipment & Snorkeling Equipment

 

[vladimir]

But I think if I were running a business, I would want the freedom to charge whatever I wanted to the customer after I have paid the manufacturer for the item.

This freedom is available to every American already. Just don't enter into a contract that requires you to charge a certain price. You have that freedom. And manufacturers have the freedom to enter into whatever (legal) private contracts they choose, and the freedom to conduct business the way they choose, with whom they choose. If you support this Maryland law, you are supporting further intrusion by the government into formerly private affairs. You can plausibly argue that that is necessary, but it is nonsense to claim it is part of our grand tradition of individual liberty.

 

[DA Aquamaster]

vlad says it well - a dealer signs any agreement as a matter of choice. If it was not working for a dealer in the bigger picture, none would sign it and if the company could not get any takers, they'd change the policy as they need dealers. The reality is that for brands like Aqualung and Scubapro if one shop says "no thanks" there are several more eager to say "yes" if given the opportunity as it, simply pit. works for botht he dealer and the company and over the long term for the company.

I have never been a big fan of scubapro or Aqualungs pricing policies, but they are two of the very few companies that have both wide spread dealer networks and a long history of servicing and supporting regs they made decades ago. Having seen discount brands come and go over the last 25 years, I am not confident a company can maintain both a quality product and a wide spread network of local dealers without minimum pricing policies, so they have a role to play, at least if you value face to face local relationships and dealers do have a choice as to whether it is busines model they want to engage in.

And so so do customers, As vlad says so well, supporting this type of legislation just invites greater government intursion and removes choices from both business owners and customers.

Some one please save us from those that would seek to save us from ourselves.

 

[BDSC]

I'm just glad I live in North Carolina!

 

[Peter Guy]

Offthewall wrote

The manufacturer is happy to get $170 for that item and I'm happy to pay it. It then becomes mine and the manufacturer releases ownership and all claim to that item. It is mine.. and I should be able to do with it as I see fit.

The problem with this statement is that it is not true for some companies (like SP and AL). Because of their contractual relationship with the retailer (freely entered into BY the retailer), the manufacturers do retain some "ownership control" over the goods -- that is, they retain control over the minimum advertised pricing.

There is nothing nefarious about this -- retaining control over "sold goods" happens in many different aspects in business -- from the "license" we all sign when we buy software (which limits our rights to do X, Y or Z) to renting a car. All we have done is buy the right to the product that the seller has offered to sell -- nothing more, nothing less.

IF AL doesn't want to sell me (LDS) complete control over its products, that is, and should be, AL's right. It isn't an issue of anti-trust (assuming no collaboration between the manufacturers) but of what AL is selling.

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?