A New LDS Pricing Question

With all the complaints about LDS controlling pricing (at least trying to) by trying to withhold warranties etc., I have not seen two issues raised.

1. Implied warranties... Many states, including Idaho have an "implied warranty" of usability by businesses selling products for profit. Even though the manufacturer/vendor says they do not warranty an item the state can and will step in under certain circumstances.

2. The Sherman Act legislated in 1890. What they are doing is a direct violation of this Federal Law. Here is an brief explanation and link to an article:

Price Fixing Price Fixing

Price fixing is an agreement among competitors to raise, fix, or otherwise maintain the price at which their goods or services are sold. It is not necessary that the competitors agree to charge exactly the same price, or that every competitor in a given industry join the conspiracy. Price fixing can take many forms, and any agreement that restricts price competition violates the law. Other examples of price-fixing agreements include those to:

Establish or adhere to price discounts.

Hold prices firm.

Eliminate or reduce discounts.

Adopt a standard formula for computing prices.

Maintain certain price differentials between different types, sizes, or quantities of products.

Adhere to a minimum fee or price schedule.

Fix credit terms.

Not advertise prices.
In many cases, participants in a price-fixing conspiracy also establish some type of policing mechanism to make sure that everyone adheres to the agreement.

Many of the "policies" of large vendors/manufacturers meet these qualifiers.
Refusaling to allow discounting.
Using warranty loss as a means of controlling price.
Agreeing to price in a certain manner or established level.
Not allowing the advertising of prices.

Seems like a pretty close match to me. Either way the LDS looses when they try to control pricing using these methods.

But what is the question. Yes, I agree, a good attorney could argue the case but to what end. Having the appearance of colusion is not proof. And being that we are dealing with Personal Protective Equipment, I would think a simple defence is that it is a highly specialized market that requires professional counseling for proper purchase. So to be used correctly and as safely as practiable, the purchaser needs to receive proffessional instruction on care and use for the purchase of such equipment.

I agree, sometimes the price sucks, but sometimes I do need the advice.

Ken

So when Walmart sets the price of something nationwide through it's computer system they're guilty of price fixing as well. Right?

General Motors only allows authorized dealers to perform warranty work on their vehicles, Dealers who sell more cars are given bonuses and better pricing - That cant be legal in your book.

Implied Warranties are also called the Uniform Commercial Code or "UCC" and yes most states have them. Most people are not aware of them nor are they easy to enforce. Haven't you ever wondered why Sony want's you to register the warranty on that camera you bought? Because by sending in that card and accepting the manufactures warranty, you've waived your UCC rights and then they are only bound by the terms of the manufactures warranty.

The whole LDS price fixing thing is total BS. Manufactures set the MSRP on something and if the LDS want's to sell their products they cannot sell below MAP. It's not just the scuba industry that does this, look at the outdoor electronics industry. Garmin will nail a dealer to the wall if he's caught selling below MAP or god forbid on Ebay. Because of the Internet, many industries have started implimenting MAP policies.

The internet has created a market for the guy who can afford move huge quantities of product at a small profit. - That's not a bad thing! but you're local LDS cannot necessarily live that way they have bills to pay and giving gear away won't pay the bills.

Manufactures set prices based on what the market will bear. The MSRP give the them a profit and the LDS as well while still selling the product at a price that is reasonable to the consumer.

Every time one of these "LDS is raping us" post comes out it's as if the LDS is not entitled to a fair profit. When was the last time you complained that the local grocier was cheating you? If regulators were sold in the grocery store you be paying about $2500 for that $500 reg.

I closed the paintball side of my business because as a small paintball store I could not compete with internet. I sold paintballs and services much cheaper than the other store in town but because I could not buy 50 guns at a time I couldn't get price breaks big enough to allow competitive pricing. I would look at a dealer cost of a gun being $100, MSRP being $145 and they would sell online for $105, I couldn't compete with that even with accessory sales.

My bottom line, if you're a loyal customer then I'll make your purchase worthwhile doesn't matter if it's a pair of gloves or a new drysuit. But if you've never bought a thing from me then I don't owe you anything.

The LDS is in business to make money plain and simple, same as the grocier or the car stereo shop or whatever business you might work for.

There's nothing wrong with being an informed consumer or with buying stuff off the internet, I'd be a hypocrite if I said otherwise, but just because your local dive shop doesn't give you internet pricing he's not a bad guy. His Dealer cost, profit margin, and agreements with manufactures are really none of your business. If you don't like a manufactures policy on equipment sales and pricing then buy something else, there are a ton of manufactures out there.

Sorry, It's Friday night, I'm up late and you touched a nerve.

Have a good night,

Dave

Yeah but Id rather pay the extra 100 bucks and not have to contact a lawyer everytime I want my reg serviced.

Price fixing is often used to describe LDS/dealer agreements. Really though the intent of these agreements is to prevent dealers from preying on one another which in the long run would result in a few large dealers for a particular brand that would then be in a position to eliminate any new competition and could then set their own prices. The availability of a "local" dealer and service availability would also be seriously impacted by the greatly reduced number of dealers.

Think about what Wal-mart has done to local businesses, particularly in smaller towns. Sure, prices are lower on many items, but it;s still most definitely price fixing, item selection is limited and you basically get to choose from what Wal-mart wants to stock, all the profits get pumped out of town (rather than turning over in the local economy several times as is the case with a locally owned business), the locals who do the grunt work make peanuts and the advice you get at a Wal-mart pales in comparision to what you would have gotten at the local hardware store, green house, or pet store before Wal-mart put them out of business. And let's not forget that Wal-mart buys approximately 10% of the TOTAL Chinese exports. Shop walmart and "Buy American" my ***.

Belive it or not, there are things in life that are far more important than low prices.

If you really want to crusade against price fixing, bash the gasoline industry for their standard industry pricing practices, the spot market, and the use of oil as a commodity traded item in the first place, all of which both elevate and fix the price of gas.

I responded to a similar question in another thread, but here is the issue.

"Price fixing is an agreement among competitors to raise, fix, or otherwise maintain the price at which their goods or services are sold. It is not necessary that the competitors agree to charge exactly the same price, or that every competitor in a given industry join the conspiracy." (from your source on the Sherman act)

The important words are, "amoung competitors." This implies that the manufacturers can not agree amoung themselves to restrict prices, but an individual manufacturer can set market areas, sales restrictions, and prices on its products. Likewise, LDSs can't set prices amoung themselves.

Stan

Here in the Orlando area the going rate to "nitrox clean" a tank is $40. One very good shop does it for $25. My buddy told a $40 shop that with two tanks, it was worth his while to go to the less expensive place. This $40 shop then called the $25 shop and explained that $40 was the going rate, and they should get with it. The $25 shop did not raise the price. They are Kissimmee professional dive, just south of Orlando.