MARP Price Fixing Update - Consumers Win!

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Since you don't know squat about me or the shop I work with, I'd prefer you didn't speak for me or the shop. We teach 7 - 8 week college and local classes, have done so since the 1950's, and will continue to do so.

That's facinating, but try as you might, you can't violate the laws of finance. Time (pool time and class time) costs money. If you're cheaper, one or both is getting cut or the shop is losing money.

Terry

I don't know your dive shop, but I bet it has electricity, a bunch of gear, some people, and maybe a pool. You are correct, you cannot violate the "laws of finance" (are those like the laws of physics? are there even finance laws?). Keep in mind, I don't pay for rent on a dive shop, or pay to have my compressor checked for air quality, or pay to heat a pool, or pay for a bunch of random shop employees, or pay to buy gear all the time, or any of those other costs that a dive shop experiences. When we provide independent instruction, we can beat shops because we have no overhead at all. When a student pays for instruction from an independent, they pay for their course, their books, their air, and their C card fees. We provide them with free gear to use for the class, and they bring their own personal gear.

This, my good man, is how we beat the LDS. No matter what your shop charges for instruction, guy like my friends and I can get the new diver a better deal. Furthermore, they have no pressure to buy any certain brand of overpriced gear, because we do not sell any gear at all. That was a cute touch though, that whole "Man, you don't know me!" angle. It's a little trite, but it's cute.
 
Again, I think MARP is a joke, and I choose NOT to sell for those that tie my hands like that! But MAP does need to stay, or the whole industry will crumble, and a few will survive, but not much....all you will have is cheap gear from other countries at a cheap price with no product support, no place to get it serviced, long lead times, no choices/competiton.....but you will have that cheap price you wanted, for a little while until its monopolized....then whoops

When it comes to internet sales, MAP is a joke as well -- that's the reason why when you go to Amazon to look for a big screen TV you have to click-thru to actually see the selling price. Same for Best Buy for that matter. They're abiding by their MAP agreements, but in reality anyone with half a brain can get the "real" price. All it does is prevent the "Little guy" who doesn't have a big web site budget from sending out an e-mail newsletter offering that same "click to see" price to his existing customers.

Not everyone is interesting in haggling. They're more interested in doing their research and coming up with an answer that works best for them. And, they're interested in doing it at any time of the day or night, not when Joe Retailer happens to be open, and willing to talk on the phone. If they're smart enough to give the local guy a shot, they're probably going to shoot them an email saying "Hey Joe, I want to by XX, YY, and ZZ - what's your best price?". As I understand it, even offering below MAP might put them in violation of their agreements.

The main way around this seems to be "package deals" - include enough other things in the package that are more flexible on pricing and use that to give the price break without actually violating the MAP or MARP. That's great, except that how many returning customers are looking to buy a bunch of stuff at once? They're more likely to be slowly adding to their existing gear, or replacing something broken. I actually expect that to get even more typical now that people are actually thinking about their use of credit -- they're not going to to go drop $5k on gear and pay it off over time - they'll buy a piece here or there as they have the cash for it.
 
I don't know your dive shop, but I bet it has electricity, a bunch of gear, some people, and maybe a pool. You are correct, you cannot violate the "laws of finance" (are those like the laws of physics? are there even finance laws?). Keep in mind, I don't pay for rent on a dive shop, or pay to have my compressor checked for air quality, or pay to heat a pool, or pay for a bunch of random shop employees, or pay buy gear all the time, or any of those other costs that a dive shop experiences.

If you don't do those things, then you either found someone else to pay or you're not doing what you say you are.

If you have a pool, who pays for it? If you don't have a pool, how do you do confined water training?

Same goes for the air. If you don't have a compressor, you're paying someone else for it.

Tank inspections and maintenance?

"Free" gear?

Everything costs money, either you're paying for it, the customer is paying for it, or they're not getting it, regardless of your shop affiliation or lack of it.

That was a cute touch though, that whole "Man, you don't know me!" angle. It's a little trite, but it's cute.
It's always nice to call someone on it when they're blowing just smoke.

Terry
 
Here is a post from Phils own website... not too long ago.

Retail Restrictions in the Scuba Industry - Scuba Industry Price Controls

I have to seriously wonder what has changed Phil's mind? Who did Phil sell out too?
Hey Phil, Why the change of heart? Please explain it to us all....

Perhaps Phil doesn't appreciate me as competition?

The only thing I do know is that you can't play both sides of the fence...

Ken, you have a good degree of nerve. Personally , I like a guy with piss and vinegar. Actually, I am just like you.

The article you quote from my previous "hard coded" website was probably one that I felt best about when writing it. It represented my free trade philosophy very well at the time, and continues to represent how I feel about how commerce should work today. I am an unabashed free-trader. I believed then, and I believe NOW, that retail price maintenance is a horrible idea AS A COMMERCE PHILOSOPHY. At the heart of my belief system, I think that retail price maintenance should go away. I would like to see the government COMPLETELY SILENT on the entire issue. Let the market settle it out. Some companies will take advantage of consumers, and they will eventually pay the price for that (hey, I would also like to see the government out of education, out of the reproductive rights discussion, out of gun control, and out of most every other part of my life....you see, I am a libertarian). However, this doesn't change my opinion about WHAT THE CURRENT STATE OF THE LAW SAYS.

When we switched from our "hard coded" website, over to our current content management system, I transferred some of the articles over and some I didn't. I didn't transfer that, and several others in that series, because I could not FAIRLY maintain the table that listed the polices of the various scuba companies up to date. The position of the companies was changing rapidly, and given the private nature of policies between a manufacturer and its dealers, I found it impossible to accurately maintain the data for companies with whom I do no business. But come to think of it, I might just cut and paste from the Way Back link you posted and reconstitute that article.

To answer your question, I have had no change of mind. To support my beliefs and to implement commerce in the way that I would like it, I favor ALL of the controls go away. Now, I don't have any confusion of the danger that would pose to me and you, and the other "smaller" retailers, but I would still like to see them go away. As it currently stands, there is a Supreme Court decision which says that retail price maintenance is JUST AS ILLEGAL AS IT ALWAYS WAS! The Leegin decision simply says that it is no longer per se illegal. If you can prove that a manufacturer has created a price maintenance AGREEMENT that harms commerce and competition, you can sue and you can win.

However, this decision HAS NOTHING TO DO with minimum advertised prices and the policies that enforce them. Neither does your Maryland legislation. Neither does any of the "draft" memorandums, that I am aware of, currently being circulated between our elected representatives on the national level. There seems to be no state legislative efforts that I am aware of, no federal legislative efforts that I am aware of, and no sitting court that seems willing to dispute or challenge the bevy of cases that allow for a manufacturer to choose with whom they do business, on whatever conditions they please......when it relates to restriction as to how a manufacturer may condition the advertising of their brand and their products. (Oh, before you go quoting some of the NARROWLY WRITTEN decisions to the contrary on MAP programs issued by the Supreme Courts against CERTAIN RETAIL PROGRAMS, actually read the opinions. It will save us a lot of time and bandwidth)

Your argument is a very populist argument. Actually, I like it a little. Unfortunately, like all populist arguments, they tend to fly the kite to the south only when the wind is coming from the north. Most unfortunate, it is based upon a misunderstanding of some elements of economics, the law, and the situation "on the ground". Like many people that make a mixed economic, legal, or situational argument, you are at a great disadvantage when you don't possess the requisite knowledge, and it only gets worse when you attempt to combine them into a treatise on the world as you see it. It results in the confusing random writings that you have put forth. Many, many people will like the sound of what you say, but that doesn't add one bit to the validity of the argument. Open anonymous claims that you have "kicked the bad guys out", without telling us who the bad guys are.....simply make your argument look like an emotional rant.

Now, you and many others may think that I have come down a little bit hard on you in this post. I don't have a history of confronting my competitors, to the degree that I consider you a competitor. In fact, most of the time, I SUPPORT my competitors when others bash them. But, I have good reason to talk to you "rather sternly". After all, you mentioned that I had apparently "sold" out to someone. You implied that I have had some sort of "change of mind". Like many people, you jumped to the reasoning that because I don't jump on your populist argument, I must have abandoned my beliefs and sold out to "the man". Far to the contrary. I haven't "sold out" to anyone. I actually have some "skin in the game" on the issue of fighting for a fairer relationship between scuba manufacturers and local scuba stores. I don't mean just signing some petition or using the toll-free number of the attorney general and ranting about how I WISH things were. I actually mean "SKIN IN THE GAME". I was informing others about various aspect of these issues before you even imagined getting into the scuba business. As to my changes of mind, there have been none. I do, however, maintain an ability to know the difference between the various restrictions, which are and are not legal, which are and are not likely to be changed. No change of mind, just a clear ability to separate my personal philosophy from the state of the law. And, my "heart" remains where it always did.

Ken, this is, by design, a civil board, so I will hold back saying to you what I REALLY feel inclined to say. I might suggest that you pose the same questions about me over on the DecoStop, where. by virtue of the terms of agreement, we can be "less restrained" about what we say. Or, like you did months ago, phone me up.

Added Note: I still would like to know the names of the manufacturers that are imposing price restrictions on you at the cash register. If you would tell me the names, I might be willing to "jump on your bandwagon". Because, you see, even us internet guys operate by the same rules you do. Maybe they are applying a special set of "off the wall" rules for you. Or, maybe you are such a pain in the ass to them that they just prefer not to do business with you. But, even that situation would be unfair. Oh, and I understand the MAP price policies....but that isn't LEGALLY the same as price maintenance agreements and policies. Let's not continue to "damage the visibility" by thinking they are.

Phil Ellis
Discount Scuba Gear at DiveSports.com - Buy Scuba Diving Equipment & Snorkeling Equipment
 
I disagree that MARP and MAP are anticompetitive. If it allows more shops to continue to exist and forces them to find other unique ways to be competitive .

Whoo. This sounds like it's straight from the communist manifesto.

Brothers,we will "set" pricing for you to "make you compete" and "allow" you to exist!
 
Anyone read Ayn Rand's Atlas Shrugged? The whole argument for MARP slightly reminds me of that story (but it has been a while).
 
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Off - just checked out your website (granted I only looked at the training section). I was impressed - the information is presented in an easy to read format, you have the costs explained with what is included and the FAQ does an excellent job of reinforcing the information and at the same time furter explaining some of the "why's" that prospective students may have but either don't ask or assume a different answer.

You do appear to be a touch higher then what the average student is going to pay for certification for the shop that I teach for, however with your lower expected margin on gear ... I can see the logic.

You do make an interesting point - you mentioned that you don't feel the quality of your instruction/training is justified by current price but at the same time you understand that you can't be excessively expensive. So in a way you are saying that your equipment sales are subsidizing your courses ... which is very similar to most shops - just that the ratio's might be a little different. So your business model isn't that much different then anyone else's in the industry.

I am guessing that you have a fairly decent size population to draw from ... not all shops are in this situation and as such there are not as many students to take the courses which means the equipment side has to contribute more to the balance sheet. As I see it, MAP allows stores in these smaller centers to continue to exist, thus train more divers, and encourage more people to discover diving. I still think that MAP and MARP policies are acceptable since the stores (and customers) can choose to do business with them or not. It appears to me that you are dictating to them what their business model should be, you might not agree with them but if you are promoting free enterprise then you should also be willing to accept that they have a right to design and implement a business model that they believe in.
 
Ken, you have a good degree of nerve. Personally , I like a guy with piss and vinegar. Actually, I am just like you.

The article you quote from my previous "hard coded" website was probably one that I felt best about when writing it. It represented my free trade philosophy very well at the time, and continues to represent how I feel about how commerce should work today. I am an unabashed free-trader. I believed then, and I believe NOW, that retail price maintenance is a horrible idea AS A COMMERCE PHILOSOPHY. At the heart of my belief system, I think that retail price maintenance should go away. I would like to see the government COMPLETELY SILENT on the entire issue. Let the market settle it out. Some companies will take advantage of consumers, and they will eventually pay the price for that (hey, I would also like to see the government out of education, out of the reproductive rights discussion, out of gun control, and out of most every other part of my life....you see, I am a libertarian). However, this doesn't change my opinion about WHAT THE CURRENT STATE OF THE LAW SAYS.

When we switched from our "hard coded" website, over to our current content management system, I transferred some of the articles over and some I didn't. I didn't transfer that, and several others in that series, because I could not FAIRLY maintain the table that listed the polices of the various scuba companies up to date. The position of the companies was changing rapidly, and given the private nature of policies between a manufacturer and its dealers, I found it impossible to accurately maintain the data for companies with whom I do no business. But come to think of it, I might just cut and paste from the Way Back link you posted and reconstitute that article.

To answer your question, I have had no change of mind. To support my beliefs and to implement commerce in the way that I would like it, I favor ALL of the controls go away. Now, I don't have any confusion of the danger that would pose to me and you, and the other "smaller" retailers, but I would still like to see them go away. As it currently stands, there is a Supreme Court decision which says that retail price maintenance is JUST AS ILLEGAL AS IT ALWAYS WAS! The Leegin decision simply says that it is no longer per se illegal. If you can prove that a manufacturer has created a price maintenance AGREEMENT that harms commerce and competition, you can sue and you can win.

However, this decision HAS NOTHING TO DO with minimum advertised prices and the policies that enforce them. Neither does your Maryland legislation. Neither does any of the "draft" memorandums, that I am aware of, currently being circulated between our elected representatives on the national level. There seems to be no state legislative efforts that I am aware of, no federal legislative efforts that I am aware of, and no sitting court that seems willing to dispute or challenge the bevy of cases that allow for a manufacturer to choose with whom they do business, on whatever conditions they please......when it relates to restriction as to how a manufacturer may condition the advertising of their brand and their products. (Oh, before you go quoting some of the NARROWLY WRITTEN decisions to the contrary on MAP programs issued by the Supreme Courts against CERTAIN RETAIL PROGRAMS, actually read the opinions. It will save us a lot of time and bandwidth)

Your argument is a very populist argument. Actually, I like it a little. Unfortunately, like all populist arguments, they tend to fly the kite to the south only when the wind is coming from the north. Most unfortunate, it is based upon a misunderstanding of some elements of economics, the law, and the situation "on the ground". Like many people that make a mixed economic, legal, or situational argument, you are at a great disadvantage when you don't possess the requisite knowledge, and it only gets worse when you attempt to combine them into a treatise on the world as you see it. It results in the confusing random writings that you have put forth. Many, many people will like the sound of what you say, but that doesn't add one bit to the validity of the argument. Open anonymous claims that you have "kicked the bad guys out", without telling us who the bad guys are.....simply make your argument look like an emotional rant.

Now, you and many others may think that I have come down a little bit hard on you in this post. I don't have a history of confronting my competitors, to the degree that I consider you a competitor. In fact, most of the time, I SUPPORT my competitors when others bash them. But, I have good reason to talk to you "rather sternly". After all, you mentioned that I had apparently "sold" out to someone. You implied that I have had some sort of "change of mind". Like many people, you jumped to the reasoning that because I don't jump on your populist argument, I must have abandoned my beliefs and sold out to "the man". Far to the contrary. I haven't "sold out" to anyone. I actually have some "skin in the game" on the issue of fighting for a fairer relationship between scuba manufacturers and local scuba stores. I don't mean just signing some petition or using the toll-free number of the attorney general and ranting about how I WISH things were. I actually mean "SKIN IN THE GAME". I was informing others about various aspect of these issues before you even imagined getting into the scuba business. As to my changes of mind, there have been none. I do, however, maintain an ability to know the difference between the various restrictions, which are and are not legal, which are and are not likely to be changed. No change of mind, just a clear ability to separate my personal philosophy from the state of the law. And, my "heart" remains where it always did.

Ken, this is, by design, a civil board, so I will hold back saying to you what I REALLY feel inclined to say. I might suggest that you pose the same questions about me over on the DecoStop, where. by virtue of the terms of agreement, we can be "less restrained" about what we say. Or, like you did months ago, phone me up.

Added Note: I still would like to know the names of the manufacturers that are imposing price restrictions on you at the cash register. If you would tell me the names, I might be willing to "jump on your bandwagon". Because, you see, even us internet guys operate by the same rules you do. Maybe they are applying a special set of "off the wall" rules for you. Or, maybe you are such a pain in the ass to them that they just prefer not to do business with you. But, even that situation would be unfair. Oh, and I understand the MAP price policies....but that isn't LEGALLY the same as price maintenance agreements and policies. Let's not continue to "damage the visibility" by thinking they are.

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


Phil,

Thank you for the kind and well articulated post. I'm glad to know we are on the same side....

Ken
 
Whoo. This sounds like it's straight from the communist manifesto.

Brothers,we will "set" pricing for you to "make you compete" and "allow" you to exist!

So by your reasoning the only thing that should be important is price? Who cares about quality of instruction ... whoever is cheapest should survive!!! I will repeat - if you make your sale on price then you will loose it on price too. If you don't have the ability to be creative enough to move the sale away from a price only discussion then you have no business being in sales. Anybody can make a sale on price alone.

It would be communism if the government (or other central planning organization) dictated that you must carry SP, and that you must abide by their MARP & MAP policies. And then it was further decreed that each diver had to purchase SP.

By resticiting how a company implements its business plan you are a lot closer to communism then by allowing them to design and implement a plan that suits their needs and wants.
 
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I don't know where you come up with this. One of the problems with scuba training is the supply of "qualified instructor" far exceeds the demand.
. . .
Independent instructors can't make it on expensive, short, crappy training.

Instructors (independent or not) are more profitable when the classes are shorter and the price remains the same. There's really no way around it.

Terry
 

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