Price fixing

Discussion in 'General Discussions and Advice' started by zayd, 7 Sep 2011.

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  1. zayd

    zayd

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    Hi Guys

    Having been an aquarist for 5/6 years now and having setup 3 tanks, I notice that price fixing is a huge problem. We have a large distributer in SA representing several brands that enforce "recommended" selling prices.

    I have recently pointed out to some local retailers that another retailer is offering the product at a cheaper price than them only be to told that the cheaper retailer's price is wrong and the website is being teared down.

    Is this practice not breacing our competition law? I would like to submit a complaint to the competition commission as the retailer should be able to sell at whatever he price he chooses to.

    What do you guys think?

    Regards

    Zayd
     
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  3. lIghty

    lIghty

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    Interesting. I can see a can of worms being opened! But may do some good. I've noticed that quite a few item are cheaper to source internationally, even after freight.
     
    Last edited: 7 Sep 2011
  4. wukkie

    wukkie

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    Well i think with the limited supply, price fixing is going to be a problem. But if the retailer is still buying from the same supplier as the others, and they do not adjust their price. either the cheaper guy will not last, due to not enough profit, or the other guys will soon learn, and adjust price too, to keep customers.
     
  5. dallasg

    dallasg Moderator MASA Contributor

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    MAP pricing is legal and used in USA and UK too, its minimun advertised pricing and suppliers enforce it thru their channels
     
  6. leslie hempel

    leslie hempel Moderator MASA Contributor

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    i think there is a fine line between price fixing and sticking to suggested mark up..

    I know oakley sunglasses have to sell for a certain price no matter where you go in the country but that being said my local store gives me a discount.. so i suppose its subject to the retailers discresion in leu of partonage..

    I know certain wholesalers have implemented minimum advertised pricing but this doesnt stop the sale from going through for less than advertised..
     
    Last edited: 7 Sep 2011
  7. Alan

    Alan Admin MASA Contributor

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    I have no problem with recommended retail prices, but who sets them up, if its the international distributor, then everybody is on the same playing field no matter who imports it. If its the local wholesaler, still no problem because if they make it too expensive then they open up the market for their compitition. But if the local wholesaler recommends a price and another wholesaler can sell the product at a better price then so be it. If the more expensive wholesaler then tries to force the cheaper wholesaler to up his prices, then be careful, the fines and legal fees for this are hugh, not to mention the bad publicity they will recieve here on MASA.
     
    Last edited: 7 Sep 2011
  8. dallasg

    dallasg Moderator MASA Contributor

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    as far as i know and Les mentioned it, its only for product advertising, print and web, but if you go instore they cannot force you to sell it at any price
     
  9. RiaanP

    RiaanP Moderator

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    I believe set marked up price is a good thing. One retailer CANNOT undercut another. At the end of the day, we as consumers will loose out. Certain shops, especially online shops do not have the same overhead as a full blown LFS. And online shops do not have tanks set up and water and lights etc... or rent. Rent being the single most expensive thing after salaries any shop have to pay.

    If one LFS is allowed, to force out a number of other shops, what do you have at the end of the day? One shop that can eventually put their prices wherever they want. And an online shop, running out of the garage, that is if they even care to have their own stock, obviously have a lot less expenses compared to a Idol Marine, or Pet Stop or Dorry Pets (Those are the sponsors in around Pretoria I support - so forgive me to only highlight them)

    Online shops, can and have the flexibility to first source the item from the one big distributor, before they post it to you. And you are more than willing to wait a week. LFS, you walk in, and you want the item NOW. They must carry stock. And stock cost money.

    Another ADVANTAGE, with buying from LFS, you have at least product support. Important on a R4000 pump I think (and I used it before). Something cheap and its easier to import yourself, go for it. Return policy on hardware = important.

    But I rather support my local LFS, even if I can import the item myself. What happens if I do not support him, and he closes his doors. Then where will I get my lifestock or other items I cannot import? Or product support?

    At the end of the day, the minimum retail price set by distributor, is there to protect the full blown LFS from running out of the garage only hardware LFS. (sorry - not meant to offend - just trying to emphasize the point). And we as end-consumer will ultimately benefit from having a choice of multiple shops we can go to.
     
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  10. leslie hempel

    leslie hempel Moderator MASA Contributor

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    its weird how the hardware guys are so sticky about pricing but the liestock side is a free for all..

    And ironically the fish travel further to be sold at the coast and are sold for less than in jhb? EG: yellow tang (for arguments sake size M) is sold for R700 inland and R450 - R500 at the coast.. and generally reduced to clear before a new consignment..

    just thought id throw that in there...
     
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  11. Jeann1

    Jeann1

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    That is the idea @RiaanP.

    Same Storie apply's for most retailers. To give you a e.g. my wive stocks Swartzkoff , Loreal , GHD , Tigi etc. they all have MAP pricing that salons need to stick to.

    This is simply to get everyone to sell products to consumers at a unified price.. To make that people cannot rip you off. If they sell for under MAP , penalties can be given or even product ranges removed from the shop.
     
    Last edited by a moderator: 26 Nov 2015
  12. dallasg

    dallasg Moderator MASA Contributor

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    haha i agree, dont get me started on livestock importers :)

    it cost more to live in GP, need more security and insurance :p
     
  13. dallasg

    dallasg Moderator MASA Contributor

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    now i would say that is more price fixing, according to SA law and definition of MAP, its only a price that must be advertised, eg Skimmers starting from R1500, but if you come to my store i can sell it for R1200 and make less profit
     
  14. Manic

    Manic Moderator

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    It is because you coastal people can just go swim and catch some nice fish, so pet shops have to be cheaper. Here in Joburg we are stuffed.
     
  15. ScottK

    ScottK

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    At the end of the day if a LFS is overpricing their stock they will lose business to the guys that are willing to be more competitive.

    I see quite a few shops in JHB that are willing to charge an arm and a leg for certain items, often up to 25% more expensive than what they should be. Sure they will get the odd customer coming in that is not in the know or has done no research making a purchase, they are definitely not going to get the business of the serious hobbyist/reefer which they should be after.
     
  16. zayd

    zayd Thread Starter

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    Thanks. I now understand the MAP concept. So, no issue then as long as the retailer can discount the price.

    But I still think we are being ripped-off. Wholesalers import at wholesale prices and not retail prices. Yet, most of the hardware can be imported from an overseas retailer for much less (25% and more) than what they sell for here (inlcuding VAT and import duty).
     
  17. TheWaterboy

    TheWaterboy Sponsor

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    ummmmmmmm, what about people wholesaling stuff at cost prices and below cost prices. to the public aswell as retail industry.........yeah great for the aquarist...........crippling for the entire trade......do we support that too???.......just a thought, since those in the know (gathered from the red ear i have from all the phonecalls from importers, wholesalers and aquarists of late about similar topics - seem to be alot of people these days) all are aware of whats is brewing in the background and who is involved..............
    i for a fact import 1 particular range of goods that effects the marine trade....i have for years......i know the costs of goods if bought in massive bulk.........and have seen some pricing lately that outright defies the practise of bussiness.........luckily im strong enough to survive without this line.............and dont need to subject myself to dropping prices and service delivery to stay afloat.............
    20 to 30% is a respectable profit margin in the wholesale trade (people need to live aswell.......0 t0 10 %.....is raping the trade and so is 70 to 200%................we talking wholesale now!!!!

    people can make as much noise as they want............when prices are up.....everyone complains, when prices are low.....the most commited and loyal of us run for the "sale"

    its the way of life!!!!!!!


    i have a online store that now has to have its whole pricing structure changed because of sponsers on this forum who hundred of kilometers away contacting the suppliers and moaning about my "low" pricing.....retail pricing at 10 to30 % profit margins..................so where does one draw the line.........


    i could care less really , people are to plan at both ends of the scale, personally this marine trade is a hobby for us..........that we enjoy servicing where we can.........and sure we make some money here and there out of it.....which we throw right back into the marine industry and our own personal hobby....marine aquariums......we over all the politics and shinanigans.......let the people who wanna collapse the entire industry make all the noise and deal with the damage they cause.........they will be remembered when the ashes settle as those that did what they did......what pisses me off is how many fish and corals will die in this process

    my personal feeling is that using this industry as a bussiness is legal and if you succeed in it it means you helping to grow the trade.......good for you........but using it to for personal benifit and there are few legal and very illegal ways to do that) which could cause this trade to collapse...............is a no no.
     
    Last edited: 7 Sep 2011
  18. leslie hempel

    leslie hempel Moderator MASA Contributor

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    Not entireley true..

    The eastern to western becomes quite cold compared to the kzn coast our temps drop to 16deg on occasion.. not to mention we dont get certain fish that are popular to keep EG: yellow tangs and flame angels.. agreed we do get some fish that are prize specimins but we have to work for them down here so its actually easier to go buy..

    I think our 1 LFS (no names mentioned) has basically undersood that East london/ Port elizabeth are lower income earners and adjusted the pricing to accomodate rather than make no sale at all and have no marines in the town.. but it has made the other 2 LFS have to relook at their pricing structures wrt fish and coral..

    As per hardware, they all sell below MAP and i have recieved prices of between R3000 to R5000 for the very same skimmer when shopping for a friend..
     
  19. 2balive

    2balive

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    Not going into the good and bad, right or wrongs of price control/fixing.

    In SA any form of retail (and even wholesale) price control is illegal, and everyone in the value chain is subject to huge fines and now even class action lawsuits. There is also noise of it being criminally prosecuted.

    The bread saga was very public, but probable more relevant to this hobby is the bicycle retail price fixing one.

    On a personal level I support LFS, if they have the product or are willing to get it for me. I accept reasonable profits (personal view on what is). Stuff I can not get here I import myself.
     
    Last edited: 7 Sep 2011
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  20. TheWaterboy

    TheWaterboy Sponsor

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    f$%^&*k................why did you not tell me earlier..........my wife is ghd mad......was her b-day last week...........spent a small fortune and hair shit.......

    you see again......its human nature.....you see a good deal, or see the opportunity for a good deal.....you run.......


    but like you said....ghd is a set price country wide.....im happy to pay it., and happy to know i bought a good product , did not get ripped off cause its similar pricing country wide, and sevice is available in every neighbourhood for the product.....get what im saying???
     
    Last edited by a moderator: 7 Sep 2011
  21. TheWaterboy

    TheWaterboy Sponsor

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    it cost more to live in GP, need more security and insurance :p[/QUOTE]



    classic:lol:
     
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