MAP - Friend or Foe

hotdog83

hotdog83

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Hi guys,

So this is a topic that is a little bit of a sore point for some. Minimum Advertised Price. Basically what this means is that some products can only be advertised at a certain minimum price, else the supplier will stop supplying. So even if some shops want to clear old stock at cost +10%, they can't for fear of being sanctioned by supplier. What my question is, what will happen if all the shops ignore MAP simultaneously? Surely suppliers can't stop supplying shops in totality or they will be out of business? @Sponsors , your thoughts? Maybe there is a good case for enforcing MAP, but I struggle to see it.
 
I think its a very bad thing and amounts to price fixing. Getting shops to sell at whatever price they want will bring about competition and benefit the hobby.
Even if the prices arent advertised, shops will still sell at different prices so really dont see why they cant just advertise at that price. As a customer i like to see a price and not have to phone/pm to get it.
 
What it amounts to is old stock lie on the LFS shelves , for instance i was looking for Kessil lights but the only stock in country where the old models A150 , and the price has not changed R+-6k .. I ended up importing the newer model for the same price with shipping and customs and a controller as well with it. If the old models where reduced to clear , would have gone for them.
 
Yeah, I also resort to importing some stock myself, sometimes it works out to half or less of local price all inclusive landed, worth the grey import risk IMO.
 
abit of a dissapointing thread to read......

thats why the aquarium trade is absolutly stuffed and lfs stores are closing where ever you look,
just now youll want livestock and there wont be any as the lfs stores close down.
you guys think the lfs are the ones making the money........totally wrong, the wholesalers make the money.....
you try run a legit buisness with the mark up of 30 percent with 5 percent taken away on card machine sales......
pay lights, rent, staff etc etc on a 25 percent mark up????
we all working here to make the wholesalers rich unfortunatly.....and most have no loyalty.....once the brand they sell is established.....it becomes a free for all with people a few hundreds of meters away from you selling the same thing.
unfortunatly they punt millions into the hobby and thus they need to be respected.

we stay in buisness as a few of our lines are manufactured ourselves. otherwise...future looks very bleek for others.

i see top stores here in durban all with empty shelves, poor quality livestock scratching to stay open.....future of this trade is very bleek im afraid
and most are happy to import to save a few hundred rand and have no warranty aswell.....most learn with time , but it may be a case of to late when most lfs are doing other ranges for income to stay open

also @hotdog83 .....do you think that if recommended retail price is slashed that that product will survive.....never!

if i item costs 5k and retail is R6500.00 and someone sells it for R5800, and the retail stores find out about it....do you think they will keep stoking the product??
fork out 5k to make R800 profit plus pay shipping so maybe R600 profit......
id personally leave the money in the bank, have cashflow and find a product worth selling then.....

that is the reason many many product lines have enterd the market and failed

the route you suggesting points to a 0 market .....very dangerous for the trade as a whole

also suggesting boycotting the major wholesalers weather they loyal suppliers or not is an extremely dangerous suggestion for this trade.....cant believe a moderator on this forum actually has suggested that to be frank with you.



dont expect them to sponser any events or forums etc if that is the suggestions made.

alot of those wholesalers i know paid for flights of guests and accomodations etc etc to host conferences here in South africa in the past, so we do need to respect them aswell.

o good example for me to give you would be take your suggestion and turn it around.............what if the wholesalers sanction this forum and carry out normal proceeding over whats app groups???.....this forum will dissapear very quickly.......
the result would be the same to the trade should what you suggest be in place

MAP is minimum Advertised price, not Minimum selling price....you need to understand that point

my suppliers tell me i can sell a item for what i like.....i cant advertise it for what i like........
 
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TheWaterboy said:
my suppliers tell me i can sell a item for what i like.....i cant advertise it for what i like........
Click to expand...

Ok, makes sense. What constitutes advertising? So if someone specifically asks for a price, you can give a price below MAP as long as you don't advertise in store/on website?
 
I went through this prickly pear with 2 suppliers already and legally they can not refuse to sell to us. BUT I can sell at any price I want and advertise it - as long as I informed the supplier that I am running this special. in return they give me free training and KNOWLEDGE is POWER plus regular specials and promotions, I find this to be reasonable especialy because I believe in training (my staff receive an average of 4 hours training a week)

What is the benefits to YOU - the end user?
and this answer have 2 points!!!
1st
All wholesalers want to sell as much as they can, that's obviously everyone target. So selling to everyone without strings attached should be the best option. But a wise wholesaler thing beyond today and tomorrow. Before there was MAP - MARINE shops opens and closed in alarming rates and this is not good for ANYONE!!!
The suppliers are attempting to prevent the guys without a vision or ability to understand that turnover is madness it is actual profit that keep them in business to toe a line and prevent them going where they can easily undercut their bottom line to such an extend that they are closing down.

For the customer this undercutting sound GREAT but is it?
Yes today you get something very cheap but next month when your cheap shop closed down, you battle to get the service you deserve from other shops and I understand this very well as I have to spend hours every week assisting hobbyists that did not support me, to fix their problems. Is that fair??
We (my staff and I) need to survive just like you, this our JOB and YOU ARE OUR EMPLOYERS and we understand it is only a hobby to you, but still you pay me :m12: . Would you still work for a boss that don't pay you? I am convinced you will not! So understand our frustrations


2nd point

I for 1 tend to ignore MAP as I know what I need to sell products for, to still survive - The problem is there are constantly shops opening AND selling below what their GP must be to stay in business :(
In the past I asked a lot of them -
1. What is your break even point in terms of turnover?
2. AND how did you calculate it?
3. What is your GP? and Also -
4. What GP do you need to actually break even?
AND
SADLY none of those shops that could not answer this out of their head and back it with calculations are still in business - THEY ALL CLOSED DOWN!!!


VOTE WISELY WITH MONEY
 
hotdog83 said:
@TheWaterboy , are the Zetlight special you are running below MAP?
Click to expand...
yes it is....by a tiny percentage of MAP....and a large percentage of the recommended retail price but i dont advertise it on a public base.
if you walk into my shop and spend 100k .....i may even give you one for R1.....im allowed to do that cause i own it......and i dont advertise it at R1
again i have the last 3 units left in the country for the next 2 to 3 months....should i rather escalate the price and make the people who want it pay premium??? or give a discount to those who have been looking to buy it and
need the assistance to get one?
i believe in helping the aquarists as much as i can hence i choose the latter option,
if we were all about bottom line........first option, and make okes pay premium for the last 3 would be the choice.
 
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Moolis Moolman said:
I went through this prickly pear with 2 suppliers already and legally they can not refuse to sell to us. BUT I can sell at any price I want and advertise it - as long as I informed the supplier that I am running this special. in return they give me free training and KNOWLEDGE is POWER plus regular specials and promotions, I find this to be reasonable especialy because I believe in training (my staff receive an average of 4 hours training a week)

What is the benefits to YOU - the end user?
and this answer have 2 points!!!
1st
All wholesalers want to sell as much as they can, that's obviously everyone target. So selling to everyone without strings attached should be the best option. But a wise wholesaler thing beyond today and tomorrow. Before there was MAP - MARINE shops opens and closed in alarming rates and this is not good for ANYONE!!!
The suppliers are attempting to prevent the guys without a vision or ability to understand that turnover is madness it is actual profit that keep them in business to toe a line and prevent them going where they can easily undercut their bottom line to such an extend that they are closing down.

For the customer this undercutting sound GREAT but is it?
Yes today you get something very cheap but next month when your cheap shop closed down, you battle to get the service you deserve from other shops and I understand this very well as I have to spend hours every week assisting hobbyists that did not support me, to fix their problems. Is that fair??
We (my staff and I) need to survive just like you, this our JOB and YOU ARE OUR EMPLOYERS and we understand it is only a hobby to you, but still you pay me :m12: . Would you still work for a boss that don't pay you? I am convinced you will not! So understand our frustrations


2nd point

I for 1 tend to ignore MAP as I know what I need to sell products for, to still survive - The problem is there are constantly shops opening AND selling below what their GP must be to stay in business :(
In the past I asked a lot of them -
1. What is your break even point in terms of turnover?
2. AND how did you calculate it?
3. What is your GP? and Also -
4. What GP do you need to actually break even?
AND
SADLY none of those shops that could not answer this out of their head and back it with calculations are still in business - THEY ALL CLOSED DOWN!!!


VOTE WISELY WITH MONEY
Click to expand...


well put @Moolis Moolman , dai boere seuntjie weet nogal a bietjie
 
Thanks for the reply, @Moolis Moolman , makes sense. I suppose in a completely free market that undercutting and closing down trend can be extrapolated to any industry, with the equilibrium of the right stores surviving somewhere in the future based on service/price they provide that differentiates them from the fly by nighters. That being said, I suppose this hobby is quite a niche market and very unforgiving, so much riskier than say a grocery store, and higher risk should carry a higher return.
 
hotdog83 said:
Thanks for the reply, @Moolis Moolman , makes sense. I suppose in a completely free market that undercutting and closing down trend can be extrapolated to any industry, with the equilibrium of the right stores surviving somewhere in the future based on service/price they provide that differentiates them from the fly by nighters. That being said, I suppose this hobby is quite a niche market and very unforgiving, so much riskier than say a grocery store, and higher risk should carry a higher return.
Click to expand...
100% @hotdog83

ive seen stores open and shut in 3 months and ive seen 20 year old stores close their doors in 2017......its TUFF out there right now.......people are loosing their houses, buisnesses......nevermind the many many many that are closing down their aquariums.................
second hand equipment is a market place right now....if you have the cash to buy it......buy it , keep it and sell it later if this situation the country is in turns around.......youll make good profits.
that last statement should give you a indication of what this trade is like at the moment.

try support the LFS stores as much as you can, you may regret not
 
hotdog83 said:
Yeah, I also resort to importing some stock myself, sometimes it works out to half or less of local price all inclusive landed, worth the grey import risk IMO.
Click to expand...

As an example of this, a Vortech MP60w wetside locally is around R5000 when I last inquired, but can get it from US for $150 and ship it here with courier via a shipping aggregator like Aramex Global Shopper. Which works out to probably R3000 all inclusive, and almost no shipping risk due to being couriered and not sent through our post office. For me the R2000 is worth the grey import risk, as wet sides are consumables on Vortechs and only lasts a year or 2 anyway (so a warranty doesn't really mean anything).

I don't need a wet side anymore, and never got around to getting a new one, so the example is just as illustration. If they were a little less locally (even more than imported ones, but not 67% more), it won't be worth the effort to import myself. Unfortunately given the current economic climate, even us the consumers are struggling to make the hobby work, and R2000 can go a long way. If I had that extra R2000 lying around I would gladly support the LFS, but the reality is that for me (and probably quite a few others in the hobby) it makes a big difference.

That being said, there are brands in SA that you can buy new locally for the same or even a little cheaper than they are advertised in the US (like Tunze comes to mind, but probably a few others too), and for those it is a no-brainer to support locally, and wouldn't even think of anything else.

And yes, it is definitely a buyer's market in the second hand equipment market.
 
Sorry guys, I didn't mean for the thread to sound negative, just wanted a discussion around this, as it didn't make sense for me from a pure free market point of view, and it also feels MAP might be one of the contributing factors to be a barrier to entry for new hobbyists who doesn't start off with a second hand bargain. And more hobbyists is better for both the existing hobbyists and the retailers.
 
I'm now 9 years in this hobby. First time I walked into Moolis shop ages ago was when my brother had a tank and I was the spectator.

People are always trying to save that extra R5. When it comes to online ordering, it really does not matter if you bought it from a shop that is actually located in Cape Town, Pretoria or Durban.You get it a day or 2 later at your door. So easy within that kind of environment to undercut the other store, just to make a sale, because your buyer claims he can get it for R5 cheaper at wherever. Certainly there is a point where the sale is just not worthwhile as far as what the shop gets out the deal compared to the cost, effort, time, phone calls, wasted time on e-mail, answering PM's and what else not. If in total you made R100 out of a client for every hour spend, where else your earnings could be R200 or more per hour while not wasting your time or your shop staff time responding to clients that just want to squeeze that bit more out of you. You only got that many hours per day and you know what they say: Time is money.

I do not buy equipment from shops that I cannot just pop in either lunch time or after work. Learned my lesson, got 2 examples. First, when DC pumps started, all the hype, I got one from Randburg. Something was wrong with power supply and I had to go back the next weekend. Another Saturday morning for the same purpose?!?! It picked up another fault within warranty, and again, another Saturday morning set aside just to go to Randburg. Luckily it was not really a big emergency as I still got my old AC return pump and used that for the few days until Saturday.

Next example is not marine related, but it is exactly the same scenario. Bought a PC from PC International. Complete box, all pre-installed. Due to Eskom, the power supply packed up. Another Saturday trip to Randburg. The extra trip and time back to Randburg was more than the initial savings on the deal.

Even if the local shop is slightly more expensive, I rather buy locally. Especially if it got a warranty.
 
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I Have the same problem jn the electrical industry. people want my sevices for free and get some change back also. its our jobs our income. how i pay my house, car, food ect. unfortunately it wil never change
 
I'm not to clued up on the whole subject, but do suppliers or distributors own the rights to import/distribute certain brands, barring other companies from distribution?. and having a say on the MAP?
For example: If a company, "RKS Bobbies" owned the rights to distribute "Lekker pomp pumps" would any other company not be allowed to distribute "Lekker Pomp Pumps"?
Or would the Brand only sell to one distributor?

If shops are closing down, unfortunately online shops would be the way to go for hardware as they don't have as many overheads to pay.
 
Jones said:
I'm not to clued up on the whole subject, but do suppliers or distributors own the rights to import/distribute certain brands, barring other companies from distribution?
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YIP

And it is not only in this hobby.

Also reason why suppliers would check serial numbers against what they got on their lists. And the grounds on refusing to repair grey products.

Keep in mind that suppliers must honor any warranty issues. So a number of products they should keep in stock extra, to be able to replace customers goods. We surely would not wait for the wholesaler to sent your Radion lights all the way back to USA to be replaced weeks later.
 
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