MarKon
Registered
Crazy. Like it is the customer's job to keep the company in business. Dive shops skin new divers then ream them for looking online. Ridiculous and needs to stop. Hopefully this law will help.
MARP Price Fixing Update - Consumers Win!
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Ignoring the issue of anti-trust (from the manufacturers agreeing), life experience doesn't support your position that such a cartel would hold -- nor is there any reason to believe past experience would change. Cartels only work when total demand exceeds the cartel supply -- otherwise the supplier will have get an advantage by cheating and taking market share.
In addition, the barriers to entry in Scuba do not appear to be very high (thus the significant number of brands -- including quite a few "knock offs" of BCs and Regulators). (Why could there be a number of "house brands" of Scuba items if the barrier to entry was high?)
To the author of the above quotation -- your fears do not appear to be well supported.
To the OP -- why I believe in the "market" as opposed to centralized planning (whether by the current federal administration or the Maryland legislature -- or any other limited group of people).
People just aren't that smart and can't see the future -- as a result, central planners (of any sort) just are unable to make as many decisions as the populace at large. There really IS safety in numbers.
While MARP may be bad for some businesses, it may also be good for others -- just as it may work well for some consumers while not working well for others. (I believe there have been good arguments presented for both positions.) Why should government pick "the winners" instead of letting the people who actually are involved in the decision making (be they manufacturers, wholesalers, retailers or consumers) make the decisions based on THEIR interpretation of what is best for them?
It is NOT that I am a "classical economist" -- I just have a lot of trust that people, over all, will make the best decisions for their own particular situations. It doesn't mean I think people always make the best decision (at least as I define it) but I don't know enough to know what is in their own best interest. Do you?
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I'm am not sure how to say this politely, but you are wrong in a couple vital areas, no matter how well intended.
Corporate and elitist greed was only able to do what it did through deregulation (loss of government control) beginning in 1981 and reaching both its zenith and real estate focus during W's adminstration. The real estate investment issue is only a small part of the larger investment/stockmarket issues, but it also required the complicity (knowing or otherwise) of lots of average homeowners and investors who basically though that they could get something for nothing.
When you think about it buyers of on-line scuba equipment are no different and are just as short sighted.
I work in DC and evaluate government programs for both compliance and perfomance and my hands have been tied since the day I started by republican administration policies that for the most part favor a very hands off approach where you just give money to states and programs and let them do what ever they think is best - even if it is not exactly what the funds were intended to be used for. I am not neccesarily opposed to states doing what ever they want, but I am opposed to having them do it with misused federal money.
You are correct that those days are pretty much over under the current administration - at least once the current crop of upper level bureaucrats either gets with the program or hits the road - as government control, as opposed to elitist corporate control is suddenly back in fashion (as GM and others are learning.)
DA -- my, my -- where to start?
a. The last time I looked, "the states" were government entities also and led by people who were elected to the various posts -- unlike the "all knowing" bureaucrats of the federal government.
b. The deregulation of "industry" started in the late 1970's, NOT 1981 with the deregulation of the trucking and airline industry -- not to mention some significant deregulation of the financial industry, in particular, the savings and loan industry. (I know, I was a state bureaucrat involved with the industry in the late 70's!)
c. There is a very good case to be made that the current real estate/financial mess is a result of bureaucratic/political decisions that opened the door to people acting in their own self-interest (i.e., the dreaded "greed") and but for the bureaucratic/political decisions made between 1996 and 2004 we would not have had the financial melt down we've had over the past 18 or so months.
I've said it before and I'll say it again, neither you, me, nor anyone else, is smart enough to know "what is best." The only think any of us can do is to try our best to live by the Astronauts Prayer -- Please Lord, Don't Let Me **** This Up!
a. The last time I looked, "the states" were government entities also and led by people who were elected to the various posts -- unlike the "all knowing" bureaucrats of the federal government.
b. The deregulation of "industry" started in the late 1970's, NOT 1981 with the deregulation of the trucking and airline industry -- not to mention some significant deregulation of the financial industry, in particular, the savings and loan industry. (I know, I was a state bureaucrat involved with the industry in the late 70's!)
c. There is a very good case to be made that the current real estate/financial mess is a result of bureaucratic/political decisions that opened the door to people acting in their own self-interest (i.e., the dreaded "greed") and but for the bureaucratic/political decisions made between 1996 and 2004 we would not have had the financial melt down we've had over the past 18 or so months.
I've said it before and I'll say it again, neither you, me, nor anyone else, is smart enough to know "what is best." The only think any of us can do is to try our best to live by the Astronauts Prayer -- Please Lord, Don't Let Me **** This Up!
Jupiter31
Contributor
"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."
Maybe....
But I'm not willing to just "give a pass" to those who bought houses they had no business owning ("..I know the loan is interest only, but I'll just refi in a couple of years, or if worst comes to worse, sell and make a 50% return..."), or those who used their homes as an "ATM" via doing cash out refi's, sometimes 2 or 3 times.
The real estate mess is at the forefront of our current economic problems, and it could have been prevented.
I could write "War and Peace" about this subject, but suffice it to say there is a ton of blame to go around, and the consumers who in our "Gotta have it now" society did so many foolish things bear as much responsibility as the bank who made the loans, the polititions who screwed with the Fannie Mae guidelines, the brokerages who securitized these loans, and insurance companies like AIG who provided the insurance for the securitized loans.
Oh - and don't forget the many folks like me who did none of these things - we just have the responsibility of paying for others greed and stupidity.
Maybe....
But I'm not willing to just "give a pass" to those who bought houses they had no business owning ("..I know the loan is interest only, but I'll just refi in a couple of years, or if worst comes to worse, sell and make a 50% return..."), or those who used their homes as an "ATM" via doing cash out refi's, sometimes 2 or 3 times.
The real estate mess is at the forefront of our current economic problems, and it could have been prevented.
I could write "War and Peace" about this subject, but suffice it to say there is a ton of blame to go around, and the consumers who in our "Gotta have it now" society did so many foolish things bear as much responsibility as the bank who made the loans, the polititions who screwed with the Fannie Mae guidelines, the brokerages who securitized these loans, and insurance companies like AIG who provided the insurance for the securitized loans.
Oh - and don't forget the many folks like me who did none of these things - we just have the responsibility of paying for others greed and stupidity.
Dominant manufacturers have duped Mom & Pop retailers into believing that price-fixing is in their best interest.
But ultimately, price-fixing kills innovation (i.e. why innovate when you can just charge more?). Innovation built America; it's what used to attract the best and the brightest from all over the world. But now, foreign-student applications for post-graduate studies at US universities are down. If you're a xenophobic burger flipper, that might make you happy. But when you hobble US innovation that's un-American!
The American Antitrust Institute (AAI), economists and many retailers all agree that the Leegin decision, one of the most contentious 5-4 votes of the Supremes, only helps dominant manufacturers, but hurts everybody else by killing innovation.
Dominant forces in the dive industry have colluded for decades. Read the prosecutions by the Department of Justice and Federal Trade Commission. The dive industry was caught hobbling innovation with astonishing levels of collusion (retailer boycott, ad lockout, disseminating plans in newsletters to resorts, directly involving training agencies and retailers). But old habits die hard...
Paraphrasing an earlier doubt: "How can you cartelize an industry if there's more supply than demand?" What's unique to the dive industry is "Risk Management" (details of how this glue binds elements of the industry together are for another time).
Actually, the dive industry is a great Petri-dish to examine what happens when you've got an entirely unregulated industry (what the government didn't prosecute could fill a book). Those at the top of the pyramid win, and the vast majority of retailers are just cannon fodder, passing their hard-won income up the food-chain.
Collusion, masquerading as "prudence," kept Nitrox virtually off the market for 10-years. NONE of this is the fault of retailers. Heck, they're the ones -- and their children -- at greater risk of bone and brain lesions. Not the folks at the top of the pyramid who lied about the "hazards" of Nitrox (who didn't want to lose control to the innovators who were branded as "free-riders"). The real victims are the retailers who are sold a pot 'o gold if they follow the advice of the industry's leaders, not realizing the ethical rabbit hole they're encouraged to descend (for the good of the industry, Comrade!):
In dive accidents, it's not the proximate occurrence, but the cascade of dominoes that results in a tragedy. If you can stop the first domino you can avert a tragedy. Price-fixing (the first domino) is the mechanism that allows all the other mischief to fester. Want a concrete example? The "SPG-War" in the early days of the recreational dive industry irrefutably killed some divers (recent post RE diver-to-diver equalizing tank pressure).
Weak retailers argue that without price-fixing, no retailer can afford to provide quality services to divers. Consumers might believe that argument if industry leadership did a truthful job of mitigating problems. Instead, consumers trip across random research, such as carbon monoxide / air-quality problems, buried on websites, and such problems never get fixed:
A random sampling of US dive retailers found over 10% of tanks had at least 2X the allowed limit of carbon monoxide in air; 20% of Nitrox fills could cause fatal oxygen toxicity spasms or increase risk of DCI.
For over 90 years, prior to the Leegin decision, price-fixing was automatically (i.e. per se) illegal, according to the Sherman antitrust act. Now, if a person or company believes that an instance of price fixing violates Sherman 1 (one metric is that it harms consumers), the injured party must litigate based upon "Rule of reason." But not even state attorney generals can afford such tortuous litigation, per their own testimony at recent meetings.
The USA is now the only industrialized nation that allows rampant price-fixing.
Senator Kohl's legislation will most likely be introduced in the next 100 days of the new administration. Kohl has powerful co-sponsors.
If humans all behaved 100% ethically and morally all the time, I probably wouldn't have a problem with price-fixing. But as an industry insider, I see what games occur in the real world. If you force businesses at all levels to compete on a level playing field, knowing that the next garage innovator could put them out of business, then the dominant companies contribute their fair share to society, using their economies of scale to innovate even more. But with price-fixing, they just get fat and lazy. In diving, they also get dangerous to consumers.
BTW, AL and SP gear has sold at Thailand and Singapore consumer tradeshows for about 40% to 60% off of US list prices.
In February, Oceanic's Australian distributor was caught red-handed for price-fixing.
But ultimately, price-fixing kills innovation (i.e. why innovate when you can just charge more?). Innovation built America; it's what used to attract the best and the brightest from all over the world. But now, foreign-student applications for post-graduate studies at US universities are down. If you're a xenophobic burger flipper, that might make you happy. But when you hobble US innovation that's un-American!
The American Antitrust Institute (AAI), economists and many retailers all agree that the Leegin decision, one of the most contentious 5-4 votes of the Supremes, only helps dominant manufacturers, but hurts everybody else by killing innovation.
Dominant forces in the dive industry have colluded for decades. Read the prosecutions by the Department of Justice and Federal Trade Commission. The dive industry was caught hobbling innovation with astonishing levels of collusion (retailer boycott, ad lockout, disseminating plans in newsletters to resorts, directly involving training agencies and retailers). But old habits die hard...
Paraphrasing an earlier doubt: "How can you cartelize an industry if there's more supply than demand?" What's unique to the dive industry is "Risk Management" (details of how this glue binds elements of the industry together are for another time).
Actually, the dive industry is a great Petri-dish to examine what happens when you've got an entirely unregulated industry (what the government didn't prosecute could fill a book). Those at the top of the pyramid win, and the vast majority of retailers are just cannon fodder, passing their hard-won income up the food-chain.
Collusion, masquerading as "prudence," kept Nitrox virtually off the market for 10-years. NONE of this is the fault of retailers. Heck, they're the ones -- and their children -- at greater risk of bone and brain lesions. Not the folks at the top of the pyramid who lied about the "hazards" of Nitrox (who didn't want to lose control to the innovators who were branded as "free-riders"). The real victims are the retailers who are sold a pot 'o gold if they follow the advice of the industry's leaders, not realizing the ethical rabbit hole they're encouraged to descend (for the good of the industry, Comrade!):
In dive accidents, it's not the proximate occurrence, but the cascade of dominoes that results in a tragedy. If you can stop the first domino you can avert a tragedy. Price-fixing (the first domino) is the mechanism that allows all the other mischief to fester. Want a concrete example? The "SPG-War" in the early days of the recreational dive industry irrefutably killed some divers (recent post RE diver-to-diver equalizing tank pressure).
Weak retailers argue that without price-fixing, no retailer can afford to provide quality services to divers. Consumers might believe that argument if industry leadership did a truthful job of mitigating problems. Instead, consumers trip across random research, such as carbon monoxide / air-quality problems, buried on websites, and such problems never get fixed:
A random sampling of US dive retailers found over 10% of tanks had at least 2X the allowed limit of carbon monoxide in air; 20% of Nitrox fills could cause fatal oxygen toxicity spasms or increase risk of DCI.
For over 90 years, prior to the Leegin decision, price-fixing was automatically (i.e. per se) illegal, according to the Sherman antitrust act. Now, if a person or company believes that an instance of price fixing violates Sherman 1 (one metric is that it harms consumers), the injured party must litigate based upon "Rule of reason." But not even state attorney generals can afford such tortuous litigation, per their own testimony at recent meetings.
The USA is now the only industrialized nation that allows rampant price-fixing.
Senator Kohl's legislation will most likely be introduced in the next 100 days of the new administration. Kohl has powerful co-sponsors.
If humans all behaved 100% ethically and morally all the time, I probably wouldn't have a problem with price-fixing. But as an industry insider, I see what games occur in the real world. If you force businesses at all levels to compete on a level playing field, knowing that the next garage innovator could put them out of business, then the dominant companies contribute their fair share to society, using their economies of scale to innovate even more. But with price-fixing, they just get fat and lazy. In diving, they also get dangerous to consumers.
BTW, AL and SP gear has sold at Thailand and Singapore consumer tradeshows for about 40% to 60% off of US list prices.
In February, Oceanic's Australian distributor was caught red-handed for price-fixing.
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Good Lord...
jjufon
Registered
i don't see how anyone could support or support the idea of Min price setting.
if the manufacture of any product sales it's product to a store owner it is up to the owner to decide how much he needs to sell it for be remain in business!
what's the difference if you go buy a reg set up, but before leaving you're told that you can only dive with it on Monday's. they tell you that if we find out you use it on any other day, we will black list you and you won't be allowed to buy scuba gear every again.
this is alot like the MPAA, record companies; yes you bought it, but we really still own it and can control how you use it.
if they (scuba comp) want to charge more, then charge more, but don't tell me once i paid you you're asking price that in order to buy more, i must resell it at X.
anywho, my two cents
if the manufacture of any product sales it's product to a store owner it is up to the owner to decide how much he needs to sell it for be remain in business!
what's the difference if you go buy a reg set up, but before leaving you're told that you can only dive with it on Monday's. they tell you that if we find out you use it on any other day, we will black list you and you won't be allowed to buy scuba gear every again.
this is alot like the MPAA, record companies; yes you bought it, but we really still own it and can control how you use it.
if they (scuba comp) want to charge more, then charge more, but don't tell me once i paid you you're asking price that in order to buy more, i must resell it at X.
anywho, my two cents
widget
Contributor
Its an interesting post indeed.
Without getting involved in the domestic issues of price setting, I can say its illegal here (and in many countries I do business) and shops, manufacturers and the entire distribution chain are free to advertise and charge whatever they choose or prefer.
Transgression, by any business of these anti-competitive laws are heavily policed, and the fines are stiff.
For me personally I think this "free market system" without restrictions is good, certainly I would argue it ensures a stronger market chain as there are no protections except your own decisions, and bad decisions will be heavily punished at the cash register.
Any kind of price setting / fixing / enforcing, to me, is a false economy and largely unsustainable, - I firmly believe that good businessmen allowed to price and market as they wish, will make decisions based on their own local realities and price and compete accordingly, which can only be beneficial to the consumers who support them.
Without getting involved in the domestic issues of price setting, I can say its illegal here (and in many countries I do business) and shops, manufacturers and the entire distribution chain are free to advertise and charge whatever they choose or prefer.
Transgression, by any business of these anti-competitive laws are heavily policed, and the fines are stiff.
For me personally I think this "free market system" without restrictions is good, certainly I would argue it ensures a stronger market chain as there are no protections except your own decisions, and bad decisions will be heavily punished at the cash register.
Any kind of price setting / fixing / enforcing, to me, is a false economy and largely unsustainable, - I firmly believe that good businessmen allowed to price and market as they wish, will make decisions based on their own local realities and price and compete accordingly, which can only be beneficial to the consumers who support them.
OP
A point made earlier in this thread suggests that in a free market Manufacturers should be able to set their prices at whatever they want them to be... they do.
They tell the retailers (me) that the item will cost me $170. The manufacturer is happy to get $170 for that item and I'm happy to pay it. It then becomes mine and the manufacturer releases ownership and all claim to that item. It is mine.. and I should be able to do with it as I see fit. Obviously I'm in business and want to make a profit. I want to pay my bills, feed my family and at the same time be fair to my customer... so I do some math and figure out that I can do all that by marking the item up 40% and selling it to my customer for $238.00. I'm happy with that... but the manufacturer says the MARP ( Minimum Allowed Retail Price ) is $399. I now under duress must overcharge the unknowing consumer $161. I'd like my customers to keep their $161...
... but the Manufacturers tell me that if I don't sell it for $399... they will pull my dealership, refuse to sell to me and put me out of business. I say, they got the $170 they wanted for the product - they need to mind their own business and stop telling me how to run mine. You see, while they sell me that BCD for $170 and tell me I have to sell it for $399... all the while they're selling overstock to internet retailers for $100 and allowing them to list them online for $238.00... the same price I want to sell mine for.
Local Dive shop owners are told my manufacturers to give the old "you don't get a warranty if you buy it online speech... and oh, woe is me... yada yada yada." Consumers are just interested in the best price - especially now in this economy... so they buy it online and the local dive shop playing on an uneven field with unfair rules closes down and goes out of business.
Price fixing is clearly killing local dive shops more than any other reason. It has cleared the way for giants on the internet such as Leisurepro and giants on the corner - such as Walmart... who have greater buying power to buy and offer products at reduced prices. The only way to allow small business to compete, grow and thrive and put Americans back to work, is to level the playing field for smaller businesses. That is what this law does... that is what this law is all about.
I will always contend... and know for fact that I am right when I say "price fixing" across the board kills small business... in our industry and in all others... It has hurt our economy more than any other single event.
As far as my thoughts on housing... like it or not... Americans had a dream. They were shown this dream by the rich elitist greedy 1%. They were sold this dream by the rich elitist greedy 1%. Did they have any business buying it? In most cases absolutely not. But to blame a rabbit for taking a carrot dangled in front of his nose is insane. You see, the other 99% wanted to live like the 1%... and the 1% told them... come on cletus.. come on.
Are the 99% foolish? ABSOLUTELY. Are they to blame? ABSOLUTELY NOT. The 1% knew the 99% couldn't afford these homes all along... and the 1% thought to themselves... we'll give them the loans... take what money we can get out of them... then take the homes back and sell them to someone else... then take their money... and on and on. Working closely together, the 1% conspirators believe they can create further division... enriching themselves and creating a permanant upper class and subserviant lower class who they can control and dominate.
What they didn't count on was the fact that somewhere in most Americans a fire still burns. I myself thought it was all but extinguished. Americans were asleep... paying no attention to the shrinking of the middle class. Being bamboozled. You know what, now I think I was wrong. I think Americans are finally starting to get it. I only hope that the Obama administration doesn't lull them back to sleep with false promises and soothing speeches. American's were foolish... but they're not as dumb as the 1% thinks they are.
America, you've started to awaken... now it's time to get out of bed... and go diving!
They tell the retailers (me) that the item will cost me $170. The manufacturer is happy to get $170 for that item and I'm happy to pay it. It then becomes mine and the manufacturer releases ownership and all claim to that item. It is mine.. and I should be able to do with it as I see fit. Obviously I'm in business and want to make a profit. I want to pay my bills, feed my family and at the same time be fair to my customer... so I do some math and figure out that I can do all that by marking the item up 40% and selling it to my customer for $238.00. I'm happy with that... but the manufacturer says the MARP ( Minimum Allowed Retail Price ) is $399. I now under duress must overcharge the unknowing consumer $161. I'd like my customers to keep their $161...
... but the Manufacturers tell me that if I don't sell it for $399... they will pull my dealership, refuse to sell to me and put me out of business. I say, they got the $170 they wanted for the product - they need to mind their own business and stop telling me how to run mine. You see, while they sell me that BCD for $170 and tell me I have to sell it for $399... all the while they're selling overstock to internet retailers for $100 and allowing them to list them online for $238.00... the same price I want to sell mine for.
Local Dive shop owners are told my manufacturers to give the old "you don't get a warranty if you buy it online speech... and oh, woe is me... yada yada yada." Consumers are just interested in the best price - especially now in this economy... so they buy it online and the local dive shop playing on an uneven field with unfair rules closes down and goes out of business.
Price fixing is clearly killing local dive shops more than any other reason. It has cleared the way for giants on the internet such as Leisurepro and giants on the corner - such as Walmart... who have greater buying power to buy and offer products at reduced prices. The only way to allow small business to compete, grow and thrive and put Americans back to work, is to level the playing field for smaller businesses. That is what this law does... that is what this law is all about.
I will always contend... and know for fact that I am right when I say "price fixing" across the board kills small business... in our industry and in all others... It has hurt our economy more than any other single event.
As far as my thoughts on housing... like it or not... Americans had a dream. They were shown this dream by the rich elitist greedy 1%. They were sold this dream by the rich elitist greedy 1%. Did they have any business buying it? In most cases absolutely not. But to blame a rabbit for taking a carrot dangled in front of his nose is insane. You see, the other 99% wanted to live like the 1%... and the 1% told them... come on cletus.. come on.
Are the 99% foolish? ABSOLUTELY. Are they to blame? ABSOLUTELY NOT. The 1% knew the 99% couldn't afford these homes all along... and the 1% thought to themselves... we'll give them the loans... take what money we can get out of them... then take the homes back and sell them to someone else... then take their money... and on and on. Working closely together, the 1% conspirators believe they can create further division... enriching themselves and creating a permanant upper class and subserviant lower class who they can control and dominate.
What they didn't count on was the fact that somewhere in most Americans a fire still burns. I myself thought it was all but extinguished. Americans were asleep... paying no attention to the shrinking of the middle class. Being bamboozled. You know what, now I think I was wrong. I think Americans are finally starting to get it. I only hope that the Obama administration doesn't lull them back to sleep with false promises and soothing speeches. American's were foolish... but they're not as dumb as the 1% thinks they are.
America, you've started to awaken... now it's time to get out of bed... and go diving!
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