Price fixing

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leslie hempel said:
here is the clause,

We have implemented a new MAP (minimum advertised pricing) for the products we supply, all customers are asked not to advertise under these amounts (in store or online), this is to protect all parties, our brands need to have their reputation as high end quality products protected from price cutting. The MAP also sets a reasonable margin for all customers to make distributing our products worthwhile. The goal of map is to minimise unfair competition between retailers, (Wholesalers name here) will re-evaluate ongoing buisness with an approved retailer who repeatedly advertises products under the MAP
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What!!! Les, is this a clause from a supplier?
I will take it to a business forum i belong to where there are plenty legal eagles, will ask their advice on this.
 
damn i missed it
 
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Something interesting from someone from Sareefkeeping

Ok i'm a distributor for high end pro audio studio gear, let me lay it out for you.

My dealers conform to a suggested retail price that is sent to me by the main principle or supplier. They can sell for less than that but its not advisable for a few reasons.

1.) Its eats into your margin. A good business model is to make at least 30% to cover overheads etc and still make something that will keep you alive. Less than that and you shouldnt be in business.

2.) If Dealer A sells for less it means that Dealer B needs to counter in order to try and win the sale. This means that if Dealer B actually gets the sale, he is making a lot less than he should (refer to point 1)

3.) Now that the client has gotten wind that he can get a discount if he pushes, he starts to play Dealer 2 against Dealer 1. So the 5% Dealer 2 originally offered gets countered by Dealer 1, so now we are sitting at 10% less. Dealer 2 now needs to win the sale back and counters with another 5%, wins the sale but is actually making a loss since his overheads cost more than the 15% he is making.

4.) Dealer 1 and Dealer 2 go out of business because the client now refuses to pay the suggested retail price and have to operate at a loss to try and make sales. Because Dealer 1 and 2 are no longer in business, the Distributor now makes no money at all and either has to stop stocking that product or goes out of business as well.

Who loses out? Everybody. The client now has to import the unit directly but have no support locally, Dealer 1 and 2 have started making soap because nobody tries to talk down the price and the Distributor has started importing chinese goods because the client no longer wants to spend the original price on that particular brand.

Without a suggested retail price or MAP as you guys refer to it, you create a bidding or price war and all that happens is the price of the product drops to such a low level that its no longer viable to sell and support. That margin is there for a reason. Margins are not incredibly high in my industry but I know that in the fish business its pretty high but then it needs to be as the cost of the items are realtively low. An average margin for a R10k lighting unit will make a very small dent in the overall overhead a retailer needs to pay so he needs to either sell more units (sure) or bump up the margin in order for it to be viable. Its just simple economics guys. Without money you cant stay in business.

You have the suggested retail price which is what everybody should stick to give or take 5% for cash or whatever, that's not price fixing. That is set so that everybody in the supply chain can stay in business and give you the client the support you need. Unfortunately that doesnt come for free.

Just remember that your salary comes from somewhere and that's margin, regardless of whether you sell ice cream, IT services or fish equipment.
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zayd said:
You can't compare to electricity, it is a necessary utilty and the pricing structure we can debate all day as it is a regulated industry.

I understand different shops have different service levels and the pricing structures are different. My point is that the wholesale should not force a retailer to sell at the higher price if they are prepared to discount it.

Compare it to buying a Play Station. There we also have MAP. Ster Kinekor is the distributer, but prices vary between shops. When there is a special at Game. Pick 'n Pay doesn't complain and then Ster Kinekor reprimands Game and forces them to increase the price.

Anyway, got to get some work done.
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I dont want to pick a fight here, but the argument is then invalid.. If you are willing to pay more for electrcity then someone else , same product delivered, same unit measure, then why cant some LFS sell for MAP, and the others for less ?

specials is decrepancies from the retailer, they are then willing to make less , or the wholesaler gave them discount , or even discounted the product for every retailer.

The wholesaler reccomends a market price, to keep a standard beteen all retailers, discounts are at the retailers choice. anyways, thats my opinion.

Would be interresting to get a wholesalers opinion on this then
 
wow......funny how threads can be moulded to suit specific views.
luckily we can read between the lines.
ziyaaad has the right idea............nice post #65
and im out too.....no time to spend on things like this when posts get deleted left right and centre to suit certain peoples views.
dont forget to email me direct for cracker deals:tt2:
 
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Not that my opinion should mean anything to anyone but I think some people posting in this thread may be under illusion the hobbyist is not aware that they are indeed involved from a commercial aspect and thus your comments are quite unethical in my eyes. Its one thing the thread starter to start the thread but another to keep continually digging at a wholesalers business model when you are infact his competition or gearing up to be his competition. Everyone is quick to fault but none remember the time when we had f-all supplies available cause no one was prepared to put their money into the hobby. Now that the market has grown all of a sudden everyone who makes a living out of it is a thief. Get a life guys. Business is run on proffits. This is a hobby for us but for an importer, wholesaler and retailer its a business. They have put up their money to get going and if they choose to charge 20%, 30% or 200% its got nothing to do with us. If you think you getting your money stolen then import it yourself or buy another product.

EVERY business makes money! Take a company selling electrical goods to the government - I bet you they are making BIG profits...take my local electrician who came to replace my earth leackage - he sure as hell made profits...and so it goes.

Most of the comments are just gelousy IMO.
 
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The more we dig, the more it becomes apparent that there is a problem with MAP. If I go to Game and buy a product on special they will refund the difference if I find it cheaper elsewhere. The wholesaler won't force Game to up their price.
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lol dude, you are so way off base with this one its incredible. Game have the power behind them to buy thousands of one unit which means the supplier gives them a GREAT price, way below what they would give anybody else. Game can then add their margin (which due to sheer volume of what they are expecting to sell will be low) and can pretty much guarantee that nobody will be able to touch that price unless they make a loss. Even if you can prove that somebody is selling for cheaper its not going to hurt them, its one sale out of thousands.

You cant comapre the likes of mega marts to fish shops. They are in 2 very different leagues and 2 very different business models. I don't care how big a pet retailer is, they will never be able to use the volume sales model to full effect. Maybe every now and then but there is just not enough clientelle to be able to sustain it.



I tell you what. You want somebody to hate? Hate the goverment. You get taxed on your salary, then you get taxed on everything you buy, on top of that you need to pay for "munciple services". Once you have paid for all that, then its electricity, tax on petrol to travel on a road that your money built (which you win shortly be paying a toll on).

What I love about all of it, I don't mind taxes if they go to the right people or right cause, but its not, the people that should be benefiting are rioting because its not going to them. Now theres a reason to be upset ;)
 
SIMS said:
Not that my opinion should mean anything to anyone but I think some people posting in this thread may be under illusion the hobbyist is not aware that they are indeed involved from a commercial aspect and thus your comments are quite unethical in my eyes. Its one thing the thread starter to start the thread but another to keep continually digging at a wholesalers business model when you are infact his competition or gearing up to be his competition. Everyone is quick to fault but none remember the time when we had f-all supplies available cause no one was prepared to put their money into the hobby. Now that the market has grown all of a sudden everyone who makes a living out of it is a thief. Get a life guys. Business is run on proffits. This is a hobby for us but for an importer, wholesaler and retailer its a business. They have put up their money to get going and if they choose to charge 20%, 30% or 200% its got nothing to do with us. If you think you getting your money stolen then import it yourself or buy another product.

EVERY business makes money! Take a company selling electrical goods to the government - I bet you they are making BIG profits...take my local electrician who came to replace my earth leackage - he sure as hell made profits...and so it goes.

Most of the comments are just gelousy IMO.
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i agree 100%
 
The Waterboy - Marco said:
wow......funny how threads can be moulded to suit specific views.
luckily we can read between the lines.
ziyaaad has the right idea............nice post #65
and im out too.....no time to spend on things like this when posts get deleted left right and centre to suit certain peoples views.
dont forget to email me direct for cracker deals:tt2:
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Seeing as how I deleted 2 of the 3 posts deleted in this thread, and the third one was basically the same as the 2nd one I'm guessing you're trying to accuse me of something here. I will happily reinstate the posts if you wish, you were the one to report the post, then I remove the posts and now you still complain and make accusations too...
 
leslie hempel said:
here is the clause,

We have implemented a new MAP (minimum advertised pricing) for the products we supply, all customers are asked not to advertise under these amounts (in store or online), this is to protect all parties, our brands need to have their reputation as high end quality products protected from price cutting. The MAP also sets a reasonable margin for all customers to make distributing our products worthwhile. The goal of map is to minimise unfair competition between retailers, (Wholesalers name here) will re-evaluate ongoing buisness with an approved retailer who repeatedly advertises products under the MAP
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i know who's MAP you are talking about and wonder why you have to post the oldest MAP policies

here is the latest MAP policy from them


274e677e48e9a88.jpg



 
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wow....nice one sims...............didnt know the thread starter was going to be a wholesaler.......:eek:
i infact just got a mail saying he was the dude that went on my site and then tried to hussel the local lfs for price.....trying to get confimation on this though.......
if true....then this whole threads point of direction makes a whole lots of sense........wow......good job to those involved:yeahdude:

again.....defiantly out after that opened my eyes:1:
 
I was not emplying he was a wholesaler...he is a hobbyist. There is another member who keeps on digging at others business models and they are as far as I know involved in the hobby!
 
SIMS said:
Not that my opinion should mean anything to anyone but I think some people posting in this thread may be under illusion the hobbyist is not aware that they are indeed involved from a commercial aspect and thus your comments are quite unethical in my eyes. Its one thing the thread starter to start the thread but another to keep continually digging at a wholesalers business model when you are infact his competition or gearing up to be his competition. Everyone is quick to fault but none remember the time when we had f-all supplies available cause no one was prepared to put their money into the hobby. Now that the market has grown all of a sudden everyone who makes a living out of it is a thief. Get a life guys. Business is run on proffits. This is a hobby for us but for an importer, wholesaler and retailer its a business. They have put up their money to get going and if they choose to charge 20%, 30% or 200% its got nothing to do with us. If you think you getting your money stolen then import it yourself or buy another product.

EVERY business makes money! Take a company selling electrical goods to the government - I bet you they are making BIG profits...take my local electrician who came to replace my earth leackage - he sure as hell made profits...and so it goes.

Most of the comments are just gelousy IMO.
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I started the thead and I am not the competition and do not propose to be one. Everyone makes profits but price fixing is illegal. ILLEGAL. That's my point.
 
ok I read my post again..I did not mean to emply Zayd is involved in the habby from a commercial side...its is someone else ;)
 
Rory said:
Seeing as how I deleted 2 of the 3 posts deleted in this thread, and the third one was basically the same as the 2nd one I'm guessing you're trying to accuse me of something here. I will happily reinstate the posts if you wish, you were the one to report the post, then I remove the posts and now you still complain and make accusations too...
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not at all rory.........
i was wondering why this thread was heading in a direction.....but sims just opened my eyes to it......

did not point fingers at you so dont get offended.....
the post i reported was defermation......so thanks.......
but you a big boy and im sure you can see what has happened here.

im to shocked at how crafty it was....well now i know. wow it was crafty
 
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