mike_s
Contributor
so how does this affect dive shop XYZ when he has to compete with a dive shop in Maryland that can supposedly legally advertise below MAP?
MARP Price Fixing Update - Consumers Win!
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The OP wrote
Whether to have MARP should be up to the parties -- IF ONE BELIEVES IN A FREE MARKET -- and the market would then decide whether it was a good business model.
BTW, I truly do believe in a free market and believe that anyone, and any business, should be absolutely free to make the stupidest business decisions they want. Government shouldn't try to protect people from their own stupidity -- which, btw, is NOT to say I believe MARP is a stupid concept. To the contrary, it may be a very good idea for a company like SP or AQ in order to keep margins up and "boutique" stores in business. (Note the qualifier "may be"!)
No you don't. If you did you would oppose this legislation. The "free market" in which you purport to believe also includes manufacturers who should be permitted to set the terms and conditions under which they sell their goods. The retailer, under a "free market" is then able to decide whether to buy from the manufacturer under those terms and conditions -- OR NOT! THAT is a free market -- not the one that is now contemplated in MD.
Whether to have MARP should be up to the parties -- IF ONE BELIEVES IN A FREE MARKET -- and the market would then decide whether it was a good business model.
BTW, I truly do believe in a free market and believe that anyone, and any business, should be absolutely free to make the stupidest business decisions they want. Government shouldn't try to protect people from their own stupidity -- which, btw, is NOT to say I believe MARP is a stupid concept. To the contrary, it may be a very good idea for a company like SP or AQ in order to keep margins up and "boutique" stores in business. (Note the qualifier "may be"!)
That is the same neoclassical economic argument that was used to deregulate the stockmarket and banking industry beginning in 1981 - and in case you haven't noticed - the same one that ran us in the economic ditch we are currently in.
Totally unregulated free entrerprise dirven soley by greed - on the part of either businesses or consumers - does not work in practice.
It could also be argued that you are trying to control a "free" America by trying to force companies to stop a practice that has a long history of helping to support dealers and local dives shops that otherwise would not have survived on the small sales offerred to scuba only businesses. You condemn those shops that fail as being ones that should fail as they will not adapt and you assume that the goal of minimum pricing schemes has always been company profit.
Those arguments are flawed as the cost to a dealer is essentially fixed (with a few percentage points discounted to larger voluem dealers) and consequently the profits to the company are also the same - regardless of whether a minimum pricing policy exists or not as the pricing policy has no direct impact on production costs.
Where it does matter to the company is in terms of total sales volume - an issue where volume and market share are largely enhanced through a large network of dealers who can stock, sell and service equipment. As a matter of practicality, scuba companies do not benefit from totally uncontrolled pricing that would allow the large volume mostly internet based dealers to put everyopne else out of business and neither would divers over the long term.
In the bold new world you propose the most likely outcomes are two or three giant internet retailers selling a handful of brands and/or a few larger chain sporting good stores with small scuba departments in a samll number of larger metropolitan areas. Neither of these options will promote growth in the industry, provide local support for existing and would be divers, or result in a reduction in scuba equipment prices over the long term.
The fundamental neoclassical economic argument that wealth and business left unstrestrained will find its own most efficient uses for the benefit of all is flawed, but it is unfortunately way to easy for a conservative to dogmatically discredit and ignore anything else that suggests that may not be the case as being "communist".
But consider this, and Peter's comments above, if the scuba companies are all about maximizing wealth (a neoclassical economic ideal) why would you want to end minimum pricing policies that, in your own view, are achieving that? You can't have it both ways (claim you support free enterprise and at the same time restrict it) and you need to at least consider that there is a certain wisdom in minimum pricing strategies, even from a neoclassical perspective.
Persoanlly, I do not like MSRP pricing policies and I really do not like companies that do not let dealers engage in internet sales, but do little or nothing to stop them (ie: talking out of both sides of their mouths) but I recognize the realities that lie at the base of those issues and I am wise enough to recognize that whether I like them or not, they are better than the probable alternatives.
AquaExplorer
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And if all of the manufacturers agreed to set MARP high, what then?
The barrier to entry to a new market would make it very, very difficult for new players to come into the market.
Remember...in the end all systems, even the free market one, is designed to benefit us, mankind, not the system itself.
That concept works in areas with a comparatively large number of divers and several competing shops. What about the majority of places where only a single shop services the local community? How many divers are going to continue to dive if they have to drive 2 or more hours round trip for air -with the parameters of whatever hours the sole remaining dive shop in a region offers.
Again, I've been there, done that and still have the compressor to prove it. If a diver is one willing to get your own compressor, you are one of the few truly committed divers who will continue to dive in those areas. Bewteen you and me, if that comes to pass, I envision a lot of really good deals on e-bay.
RecDiver97
Registered
I don't agree that this legislation would hurt local dive shops. I think it gives them an opportunity to fight back in a very competitive market.
The MARP works by forcing the store to advertise the price at the full retail. An internet retailer generally does not have to do that, and can price competitively.
To those who argue that this hurts the local shops because they will never compete with the Internet, I would argue that you are overestimating the Internet. You can't try out a pair of fins on the Internet. You can't try a mask on the Internet. And a competent LDS that genuinely helps a diver with the right piece of equipment will get the sale, even if it can be gotten for cheaper on the Internet. You know, I can get a beer in the supermarket for cheaper than at a nice restaurant, but I still go to restaurants.
Doing away with MARP agreements helps the store by allowing it to come within ballpark range of the Internet price; no one expects the store to beat the Internet price. If it sells for 25 percent more, I'll buy it at the shop. The problem comes when the Internet price is half the store price, or even less. You can't expect people to throw that much money out. Stores should have the freedom to price their products according to their market conditions: MARP agreements take away that choice.
Forcing the stores to advertise their products at high prices provides FREE ADVERTISING to the internet retailer, because then it means that the websites can say they are slashing their prices by huge amounts, compared to the store.
The MARP works by forcing the store to advertise the price at the full retail. An internet retailer generally does not have to do that, and can price competitively.
To those who argue that this hurts the local shops because they will never compete with the Internet, I would argue that you are overestimating the Internet. You can't try out a pair of fins on the Internet. You can't try a mask on the Internet. And a competent LDS that genuinely helps a diver with the right piece of equipment will get the sale, even if it can be gotten for cheaper on the Internet. You know, I can get a beer in the supermarket for cheaper than at a nice restaurant, but I still go to restaurants.
Doing away with MARP agreements helps the store by allowing it to come within ballpark range of the Internet price; no one expects the store to beat the Internet price. If it sells for 25 percent more, I'll buy it at the shop. The problem comes when the Internet price is half the store price, or even less. You can't expect people to throw that much money out. Stores should have the freedom to price their products according to their market conditions: MARP agreements take away that choice.
Forcing the stores to advertise their products at high prices provides FREE ADVERTISING to the internet retailer, because then it means that the websites can say they are slashing their prices by huge amounts, compared to the store.
R
redacted
Guest
Yes, a few areas may suffer. But, hell, last time I was in Sierra Vista, AZ (a hole in the sand); there were 3 dive shops in the yellow pages. Two would have been one too many considering population and location. And even if you get down to the point where it is the only shop in 100 miles, if there were enough divers to support the shop, then there should be enough divers to form a non-profit club which can provide gas, training, and service. Perhaps some large internet retailer or a more progressive manufacturer would see the opportunity to benefit by aiding the formation of a club. Right now most manufacturers support dive shops and let the shops support local divers. When the alternative is to accept loss of a market area, I think they will change their business strategy as necessary.
At my age, I don't see too many more years of diving in my future. But I probably would still buy a compressor if all 3 of my LDSs (within 30 miles) closed shop. I don't see that happening, as at least one shop will take the necessary steps to compete with online dealers when he has to.
I know there are some risks. But I also know the retail situation we have now sucks.
John_B
Grasshopper
Just for the record: Socialist commies aren't normally the biggest supporters of corporate business interests (i.e. WalMart, LeisurePro, etc.).
I think you have the wrong scapegoat here.
SparticleBrane
Contributor
Good riddance. Most of them are useless anyway.
OP
DA Aquamaster
I don't believe anything other than corporate and elitist greed has caused the current worldwide economic mess. The mess has been created by less than 1% of the worlds population and for too long now they have been allowed to control and monopolize markets across the globe.
What is happening here and across the globe is an awakening. Not just in Scuba.. but in economic transitions relating to every consumer good, banking product etc...
People are saying enough is enough. Government and big business control is taking a fall... and the common man is just a pinch of salt short from starting an all out revolution.
While I am no fan of politicians, the Obama administration (and Senators such as Mr. Kohl) at least recognizes the severity of the problem. Steps such as this one are a small microcosm of bigger changes coming. Changes to give consumers their rights back... to bring back consumer confidence and to ensure the undertones of radical Americanism do not start to march on Washington.
At the state level, Maryland's legislature understands that Leegin wrongly overturned 100 years of precedent. It did so at the worst of times. It did so without justification and obviously without great thought - bowing to pressure from special interest. Big dollar special interest I might add. Bigger than anyone in the scuba industry could ever dream to be.
Remember, this legislation is about much more than Scuba... it's about the difference between right and wrong... and making America whole again.
I understand where the dissent is coming from. It comes from al the bad business owners out there that see their cash cow drying up... and YES that is exactly what it is - and all it is. They're actually going to have to work for their money now... without protection from manufacturers.
I don't believe anything other than corporate and elitist greed has caused the current worldwide economic mess. The mess has been created by less than 1% of the worlds population and for too long now they have been allowed to control and monopolize markets across the globe.
What is happening here and across the globe is an awakening. Not just in Scuba.. but in economic transitions relating to every consumer good, banking product etc...
People are saying enough is enough. Government and big business control is taking a fall... and the common man is just a pinch of salt short from starting an all out revolution.
While I am no fan of politicians, the Obama administration (and Senators such as Mr. Kohl) at least recognizes the severity of the problem. Steps such as this one are a small microcosm of bigger changes coming. Changes to give consumers their rights back... to bring back consumer confidence and to ensure the undertones of radical Americanism do not start to march on Washington.
At the state level, Maryland's legislature understands that Leegin wrongly overturned 100 years of precedent. It did so at the worst of times. It did so without justification and obviously without great thought - bowing to pressure from special interest. Big dollar special interest I might add. Bigger than anyone in the scuba industry could ever dream to be.
Remember, this legislation is about much more than Scuba... it's about the difference between right and wrong... and making America whole again.
I understand where the dissent is coming from. It comes from al the bad business owners out there that see their cash cow drying up... and YES that is exactly what it is - and all it is. They're actually going to have to work for their money now... without protection from manufacturers.
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