Don't parts of the Sherman and Fair Trade Acts address this?
Regards,
Tom
Thos.J.Watson - Cabinetmaker
tjwatson1ATcomcastDOTnet
www.home.comcast.net/~tjwatson1
In an article by Mike Cox, the Michigan Attorney General, he sates the
following:
"A manufacturer does have a legal right to set a suggested retail price
(a manufacturer's suggested retail price or MSRP). The manufacturer also
has the right to unilaterally terminate a retailer who prices below the
MSRP. Frequently, when prices are identical for a product at every
store, it is because each retailer has decided to adhere to the MSRP. "
http://www.michigan.gov/ag/0,1607,7-164-34739_17343_18163-44650--,00.html
--
Jack Novak
Buffalo, NY - USA
nov...@verizon.net
I think price fixing nly occurs when different suppliers of a
product collude to make sure no one undersells, i.e. all the
manufacturers of X decide to not compete with one another.
Any one manufacturer is allowed to set their price at whatever they
want, and I think in this case (see also Lie-Nielsen planes) they
require their distributors to match the MSRP. So, if you are a Festool
distributor and decide to sell for 10% less than Woodcraft,
Festool can drop you as a distributor.
This is all stuff I've gathered -- I'm neither a lwayer nor a
business person, so I may be wrong.
-- Andy Barss
It's only price fixing if there is an agreement between the manufacturer
and retailer, or between multiple retailers, or between multiple
manufacturers.
Apparently the fact that Festool can terminate doing business with the
retailer if they don't abide by minimum prices doesn't count as an
"agreement" to sell at the minimum price...not sure how that works.
For what it's worth, Toyota is basically the same around here. No give
on pricing at all.
Chris
Jack:
When I read the linked article I find the following:
"While the manufacturer may suggest a retail price, it cannot coerce
the retailer into agreeing to it. If an agreement between the
manufacturer and retailer is obtained, then the agreement is illegal."
I don't see how this is not in conflict with what you've quoted,
particularly regarding coercion.
Isn't the threat of terminationg the retailer's ability to sell the
product coercive?
> "While the manufacturer may suggest a retail price, it cannot coerce
> the retailer into agreeing to it. If an agreement between the
> manufacturer and retailer is obtained, then the agreement is illegal."
> Isn't the threat of terminationg the retailer's ability to sell the
> product coercive?
Logically, you might think so. However, I suspect it's not "legally"
coercive, in that there is nothing forcing the retailer to sell at a
given price other than wanting to do business with the supplier.
A supplier can refuse to do business with a retailer for any number of
reasons. The retailer not abiding by MSRP is just one of them.
In a sense, it's no different than offering software under a specific
license. You have the option of either obtaining it under that license,
or not obtaining it at all.
Chris
The manufacture has terminated the retailer's ability to purchase the
produce at a wholesale/dealer price.
The practice is often used to protect the small retailer and apparently
it is not illegal:
"It is frequently difficult in antitrust enforcement to determine when a
retail price is set based upon a manufacturer's unilateral pricing
policies and when the retail prices are set based upon an illegal
agreement. The basic rule of thumb is: if the manufacturer's decision to
set a suggested retail price and the retailers choice to adhere to that
price are independent decisions, then it is probably not considered
price fixing under the law. But if manufacturers and retailers agree
that a certain price will be charged, the agreement will be considered
illegal."
http://www.artrm.com/retail/msrp/
>I thought that we were protected and that the market was protected
> from price fixing.
>
> Don't parts of the Sherman and Fair Trade Acts address this?
It depends.
If Festool transfers ownership of the product directly to the end
customer, then the retailer becomes an agent and is not allowed to set
price since they never assumed ownership.
There are several legitimate ways to accomplish this, including post
sale rebates to the retailer.
My neighborhood hardware store is a Festool retailer.
They maintain a display, but no stock.
All orders are shipped over night from a Festool warehouse in Las
Vegas.
OTOH, a manufacturer who attempts to dictate terms and conditions as
well as end market price of a product owned by some one else, in this
case a retailer, is skating on very thin ice.
Not uncommon for offshore suppliers to try to dictate end market
pricing, but it is cumbersome and not very cost effective in the US
market.
As a result, usually gets abandoned after a few years.
HTH
Lew
Very open ended question. Cannot be answered on it's own merit.
--
-Mike-
mmarlo...@alltel.net
Nope! A company can dictate a price but several cannot get together and
predetermine a fixed price to. If all were able to fix their prices there
would be no choice. You have the choice to buy Festool brand or another
brand.
If Porter Cable, DeWalt, Makita, Ryobi, Ridgid, Craftsman, Bosch,
Milwaukee, Panasonic, Festool, and all the other manufacturers of,
say, circular saws, got together and agreed that they would all sell
their saws for the same price, that would be "price fixing". But each
manufacturer has every right to set a price for the tools that they
manufacture and to do whatever they have to to maintain that price as
long as they don't collude with the other manufacturers.
--
--
--John
to email, dial "usenet" and validate
(was jclarke at eye bee em dot net)
You have to look at all angles. It is illegal to fix the price but is legal
to suggest a price. Festool suggests that no one drop the price below their
suggested price. If a retailer drops his price below that price, the
manufacturer could raise the retailers cost of the product, eliminate
discounts on stock orders, or any number of different things Unless you
read the actual contract you really don't know what the circumstances are.
Sales people rarely really know what the agreement is. I'd suggest that no
retailer wants to drop his price because that would lower his gross profit.
The retailer could also charge more than suggested and include some other
benefits and that would not be a problem. If the retailer can sell above
the suggested price then the price is not fixed.
GM has been doing this for years with the Saturn.
Personally I like to shop for a bargain but I also feel good about knowing
that I could not have done better after buying from my favorite dealer.
Fortunately Toyota gives quite a bit in the Houston area.
The combination of a MAP pricing agreement (the dealer gets something
for following the MAP so he agrees follow it) and the marigin that the
dealer can make at the MAP price may be enough to make all pricing the
same.
Frank
I think it is simpler than all that. If the dealer knows he can get
full-pop, why shouldn't he?
If some low-overhead schmuck flogs that same tool on the net, what
incentive is there to the dealer to even display/demo the tool?
But, having said that, the way around all that is the creation of an
'agent'. Not a stocking dealer. A consignment structure where Festool
owns the inventory until it is sold. A few complaints from the
competition, and the supply slows down.
When price fixing runs afoul of the law in these parts, is when it is
done to hurt the competition.
MSRP in the Festool realm, is also the price the DEALER/AGENT knows he
can get. So why discount?
KK
"Robatoy" <Counte...@gmail.com> wrote in message
news:308bd68e-8e26-4a7c...@z66g2000hsc.googlegroups.com...
>
>KK
<moved the top post to the bottom for continuity>
Dealers owning the stock is the norm. Dealers either buy at wholesale
from the manufacturer and are free to sell at any price they want or
they enter into a MAP agreement with the manufacturer and cannot sell,
by contract, lower than the agreed minimum price. They can sell
higher, just not lower. The manufacturer gives them something,
usually some form of cooperative advertising or other support, for the
agreement. I have to believe it does not violate existing antitrust,
it is a common arrangement.
Frank
I bought a Tundra on July 16 last year, Sticker was around 33k+about 1.4k
for ttl. I drove out for 28k less trade in.
I imagine I could get a better deal today on the same vehicle but probably
not on a car.
Standard Oil was one of the first targets of the Sherman Antitrust Act
you know.
Kate
"Tom Watson" <no...@erehwon.com> wrote in message
news:fqhd44959r4ebbanh...@4ax.com...
In the US Festo prices are relatively much lower than in Australia or
even in Germany - a replacement battery that sells for $75US cost
around $250US in Australia, and according to a number of US suppliers
Festo have now advised their US retailers that anyone selling &
shipping ANY Festo products outside the US will be 'terminated'.
regards
Bruce
On Wed, 04 Jun 2008 11:50:59 -0400, Tom Watson <no...@erehwon.com>
wrote:
>I thought that we were protected and that the market was protected
Not in the US you aren't. We don't use "imperial gallons" nor do we
charge by the "liter". And the Sherman Antitrust Act has absolutely
no force whatsoever outside the US. Of course if you really want it
to you could try orchstrating a terrrorist attack against us . . .
Do what, apply the Sherman Antitrust Act to your benighted region?
Oh, I see, you can't follow a conversation and have no sense of humor.