Ikelite Pricing

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ekoast

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Location
Southern California
# of dives
200 - 499
I have a question on Ikelite pricing and general policy and I would welcome feedback from Ikelite.

Up until two days ago, there were a variety of vendors that had different yet relatively competetive pricing on the Ikelite 6146.12 housing for the Canon G12 camera. I found an on-line vendor that is an authorized dealer that had the most competitve price a few days ago.

Today, when I go to order it, the price jumped $30. Granted not a large sum of money, but it appears that every vendor has followed suit within the last 2 days. Now every dealer has the exact same price. It was explained to me that in order for a vendor to maintain their Ikelite "authorized" status, they must follow the prices set by Ikelite.

I understand why housing prices are on the expensive side due to limited production and sales for a particular model. Although, what I am unclear about is why Ikelite controls what the vendor sells it for on the retail side. If the vendor wanted to sell it for $1, Ikelite still makes the wholesale amount from the Vendor.

Dictating what a vendor sells a product for certainly manipulates competition in a free retail market. As it may be allowed under the letter of the law, I as a consumer do not appreciate not being able to shop for the best value and choose the vendor that provides that value.

This type of pricing seems to be prevelant in many of the scuba industry vendor markets. I'm sure vendors do not like being told what they can and cannot charge for a product on the retail side in fear of loosing their "authorized" status.

Please know that this is not in any way an accusation of price fixing, as I know the difference. I am writing this from the perspective of a consumer that expects to be able to shop competitvely in a free market society and reward those with my business that provide the best value.

Thanks for any input.
 
There is a not too old Supreme Court case that allows for this type pricing to occur.

This is quite the norm these days. See Apple, Sony, etc for the same thing.

I forget the term for it, but it is Manufacturers Suggested Selling Price or something like that.

Lots of arguments both ways, but it is perfectly legal.

The only thing I can really tell you is, this is the way things are these days. You just have to get used to it.
 
It works like this -

A retailer can sell the product for whatever they like. If they want to sell the Ikelite product for a loss, they certainly can. But then the next time they go to buy more inventory from Ikelite, they will find themselves cut off.

Ikelite choses to do this so the market is fair for all the 'smaller' players. Kinda like revenue sharing in the MLB. If the retailers were free to set their own price, you'd have vendors selling it for lower and lower prices. All this does is drive the small dive shops out of the Ikelite housing business, as they no longer can afford to compete.

Look at the camera market. Everything now is B&H or Adaroma, or Amazon. A small retail camera shop can't compete with the likes of B&H. As a result, all but one of the camera stores here in the Fort Lauderdale area have had to close their doors.

Competition with Ikelite products is about customer service now, not pricing.
 
ekoast,

I wouldn't expect Ikelite to chime in on this one. I will preface my post that I do NOT speak on their behalf or any scuba product company or camera company.

Your first sentence inquires as to their "general policy". Their "general policy" is to manufacture a quality product for the end user at a fair price. To the "Authorized Dealer", the product needs to be a quality product that the dealer can stand behind with a good relationship with the manufacturer, AND it also needs to be worth the dealers time and efforts; i.e. PROFITABLE.

What their policy is with their dealers is, is their business and not yours. Hence, "Confidential Dealer Agreements". These usually spell out the terms of the relationship for the Manufacfurer & Retailer/Dealer.

Retailer agrees to buy said products at an agreed price, pay his invoices on time, and represent the product with due diligence & integrity. The manufacturer agrees to supply said product in a timely fashion, with an acceptable quality of build and market value.

Is it somewhat "dictated" by the manufacturer ? Yes. The manufacturer's are looking for dealers/retailers that add value to the sale, and their product. If that were not the case, then you could buy an Ikelite product or a BMW at Walmart and 7-11. All 7-11 or Walmart would do is drive the price right down into the ground, add no value whatsoever other than a cheap price, AND a couple of things would happen to the local retailer or "mom & pop's". They would either quit carrying the product in their store because what's the point of tying up their precious inventory dollars on a product that is over distributed and not profitable. OR, they would simply go out of business, much like what Tienuts (above) stated above with a bunch of the local stores.

The term that jdcpa (above) is referring to is M.A.P. Minimum ADVERTISED Price. A dealer/retail "generally" agrees that they will advertise said products no lower than a certain price or discount to the public. That way, perceived market value and integrity of the product are maintained. That's not to say a dealer/retailer can't actually sell the product for cheaper. They just can't advertise it for cheaper.

You mentioned "if the vendor ( I assume you mean retailer) wants to sell something for $1, Ikelite (the manufacturer) still makes the wholesale". Why in the world would a retailer want to sell something below cost ? Especially if they paid hundreds of dollars for it, from the manufacturer. AND, as a manufacturer, why in the world would you want your dealers/retailers selling your products below cost, and effectively, screw it up for ALL of your dealers/retailers ? And now your product is worthless in the marketplace, and everyone expects to pay $1 for it ?

Why do you think that Scubapro, (to the best of my knowledge), flat out, does not allow their dealers to sell online ? You have to go to an Authorized Retailer to purchase. It maintains the integrity and value of the product. It also maintains the profitability for the retailer/dealer, and it maintains the integrity of the purchase to the end user.

Tienuts (above) said it best, "Competition with Ikelite products is about customer service now, not pricing." I think this applies to just about ANYTHING we purchase. I'm looking for value, not a price. I think we all know that we can ALWAYS find ANYTHING cheaper. Don't find yourself jumping over dollars to save pennies !
 
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With all do respect, I think you have all bought into a concept that proports to create value but artificially sets prices. This is still a free market economy and I defy one of you to tell me that you've never shopped around for a better price on something.

If this type of pricing was "the norm" in every industry, GM, Ford et al would tell their dealers to set the price of their (respective) cars and there would be no negotiation involved in buying a car.

I'm very disturbed by being told I just have to get used to it. That's not a free market and it certainly keeps the practice going. We all have choices. I can choose not to buy the product or buy a different manufacturer or buy it used. If you choose to "get used to it" then you'll keep getting more of it at the mercy of those that set the prices and intimidate the retailers to accept it.

It would be great if I could dictate to my clients what they should pay. But in the real world of competition, that would only put me out of business. As I said in my first post, I'm not accusing anyone of price fixing, because that would have to be a cooperative effort at the retail level of their own accord and that would never happen. (Because we are still a free market).

I do appreciate the replies, I just don't agree with the practice. But that's ok, because I also don't have to buy the product, albeit a good one.
 

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