Price collusion?

[RobTheReefer]

I don't want to sound like an arse, but isn't requiring everyone to sell your products at the same price considered "price collusion" and illegal?

I'm posting this because I am going to purchase a tunze stream (already own a wavebox) and I was shopping around different sites and everyone's pricing is the same. I'm no lawyer, but I thought that it was illegal.

Anyway, I'm off to buy a stream from someone..

 

[twon8]

price collusion would be if a bunch of companies that make pumps got together and raised their prices.

tunze' prices are the same as a msrp

 

[RobTheReefer]

<a href=showthread.php?s=&postid=9321397#post9321397 target=_blank>Originally posted</a> by twon8


tunze' prices are the same as a msrp

Well, not really. More like a MMRP. Manufacturers MANDATORY Retail Price.

 

[recife111]

Tunze products dont have much margin ifor retailers , therefore it is not worth discounting them.

 

[atvdave]

Re: Price collusion?

<a href=showthread.php?s=&postid=9320465#post9320465 target=_blank>Originally posted</a> by RobTheReefer
I was shopping around different sites and everyone's pricing is the same.

What you are calming that Tunze is doing is perfectly legal, however it's a false statement.

Not all Tunze dealers sale them for the same price. My LFS which is a Tunze dealer sales the 6025 for abut 20% more than the on-line dealers. Thats why I ordered my 6045's through a on-line dealer.

It's only illegal if the retailers start doing what twon8 said.

 

[jacmyoung]

I am pretty sure to be a dealer of Tunze products they must agree to sell at the Tunze listed prices. I don't think such requirement is illegal, but when that LFS sold for more than the listed price the store might have violated the agreement with Tunze.

 

[jimmyPx]

Hello,

One thing you guys are forgetting is that retailers must buy their stock from the supplier (this is true in almost all businesses).

(Now this is how business usually works--I have no idea about Tunze's wholesale prices or business practices--below is just to make a point)

Usually if a retailer buys a lot more, they get a volume discount and their price goes down.

So, if Premium Aquatics buys 1000 Nanos to sell, they would get a better price from Tunze than your LFS that might sell 20.

They then mark them up and the difference between what they bought the pump from Tunze versus what they sell it to you is a profit for the retailer. Of course remember that out of that, the retailer has to pay salaries, rent, lighting, advertising, web bandwidth fees, etc.

So, technically a bigger retailer could sell the Nanos at their cost and undercut everyone, but with such a high demand item, why would they do that ???

Also remember that your LFS since he sells less pumps may be charging more because HIS price is more.

Just something to think about.

 

[macawdad2003]

I think jacmyoung is probably on the right track. I would be willing to bet that Tunze products are sold to a dealer on a pretty slim margin. Maybe a 20-30% mark. This would be a way for the company to ensure that the retailer/etailer pricing structure would stay constant. Rather than say a 50% mark and allow a retailer/etailer to offer a 20% discount off of retail.

This is purely speculation and I do not know this for a fact. I just know in other "high-end retail" situations this is usually the case. Just a thought and I could be 100% wrong. I think it is a fine way for the company to maintain integrity and prevent some reatil/etail outlets from whoring their products out. And like JimmyPx mentioned, then the LFS does not have to compete with etailer since pricing structure is the same/set. It becomes a win/win/win situation.

 

[jacmyoung]

<a href=showthread.php?s=&postid=9327112#post9327112 target=_blank>Originally posted</a> by jimmyPx
Hello,

One thing you guys are forgetting is that retailers must buy their stock from the supplier (this is true in almost all businesses).

(Now this is how business usually works--I have no idea about Tunze's wholesale prices or business practices--below is just to make a point)

Usually if a retailer buys a lot more, they get a volume discount and their price goes down.

So, if Premium Aquatics buys 1000 Nanos to sell, they would get a better price from Tunze than your LFS that might sell 20.

They then mark them up and the difference between what they bought the pump from Tunze versus what they sell it to you is a profit for the retailer. Of course remember that out of that, the retailer has to pay salaries, rent, lighting, advertising, web bandwidth fees, etc.

So, technically a bigger retailer could sell the Nanos at their cost and undercut everyone, but with such a high demand item, why would they do that ???

Also remember that your LFS since he sells less pumps may be charging more because HIS price is more.

Just something to think about.

All the above may be right but do not apply here. If you noticed prices of Tunze products are universally the same as those on Tunze website listed prices, regardless the online stores and their sizes. There has to be a contractual agreement to sell at their listed prices before the stores are allowed to carry Tunze products.

To require such agreement, it would be unfair to offer volume discount to larger stores who order more.

 

[rvitko]

There really is no contractual agreement, it is pretty simple, we ask that dealers honor a suggested retail price point in all advertising but many of them still run sales and specials. However, they generally stick to the MSRP as the product is in short supply and it isn't as if there is a surplus to get rid of and usually sales backfire. You can imagine if 100 customers get a deal but then have to wait 8 weeks to get a pump many are wondering how much of a deal it was in the first place and the vendor who cannot get enough pumps due to supply shortages (which we are continually working on) ends up with 100 yelling customers and doesn't do it again because it was too big of a headache without enough compensation. I do know for a fact though that some LFS's charge more, some charge less, many mail order companies offer discounts to loyal customers or on holidays and so the price is not "fixed". Also, we really try to keep the playing field as fair as possible most of our local dealers buy at the same price as mail order dealers. I know often people complain about pricing at LFS's but from owning one I can tell you that they often pay what the mail order houses sell something for and cannot compete. Because a good LFS can provide service and show the user a product in ways a mail order company can't we feel that they are very important to our market and try to work with them as much as possible.

 

[RobTheReefer]

Thanks for enlightening me, Roger.

I bought a 6100 from a merchant who offers free shipping. That's the best deal I could find.

 

[lakwriter]

Just to add another thought...keeping the prices about the same encourages the retailers (or e-retailer) to use other methods to encourage their customers to buy from them as opposed to the other guy, i.e. good customer service and reasonable shipping, which is I think, a very important part of having an effective business.

 

[jacmyoung]

<a href=showthread.php?s=&postid=9338728#post9338728 target=_blank>Originally posted</a> by rvitko
There really is no contractual agreement, it is pretty simple, we ask that dealers honor a suggested retail price point in all advertising but many of them still run sales and specials. However, they generally stick to the MSRP as the product is in short supply and it isn't as if there is a surplus to get rid of and usually sales backfire. You can imagine if 100 customers get a deal but then have to wait 8 weeks to get a pump many are wondering how much of a deal it was in the first place and the vendor who cannot get enough pumps due to supply shortages (which we are continually working on) ends up with 100 yelling customers and doesn't do it again because it was too big of a headache without enough compensation. I do know for a fact though that some LFS's charge more, some charge less, many mail order companies offer discounts to loyal customers or on holidays and so the price is not "fixed". Also, we really try to keep the playing field as fair as possible most of our local dealers buy at the same price as mail order dealers. I know often people complain about pricing at LFS's but from owning one I can tell you that they often pay what the mail order houses sell something for and cannot compete. Because a good LFS can provide service and show the user a product in ways a mail order company can't we feel that they are very important to our market and try to work with them as much as possible.

Roger, meeting of minds is a form of legal contract. A contract does not have to be in writing. But your point well taken.

I have no problem with this pricing structure. I agree the LFS are in very bad position since they often pay more than what we pay online to carry goods in their stores. I often ask my favorite LFS how close they could match the online stores, haven't been successful so far. They look at the online pricing I show them and shake their heads. I told them if the prices were close I'd rather buy from them since they treated me well when I bought livestock from them.

I think it is very short sighted when a distributor offers so much volume discount to the point that an online store's retail price is less than the wholesale price to an LFS.

 

[mattboy]

Having been to the Tunze distributor, I can verify that there simply is not much stock volume to offer the type of discounts that major manufacturers might. These products sell at the retail price because there's usually a shortage of them, and a lack of comparable products made by other manufacturers. Tunze does seem to more or less build to the market, which is small and very specialized. This is not unlike Salifert; a small company building high quality but low volume products that are designed for a very narrow slice of the market.

 

[steve the plumb]

you also have to remember than in general tunze products aren't cheap compared to similar products that other companies offer.But then again there products are well built and they (I think)are not massed produced in china.If you look at Deltec(not cheap) that company doesn't give discounts either unless its some kind of holiday special or a clearence special (by the vendor) prices are pretty much the same.If you have a good product and its well made do you want to start selling it dirt cheap?Yes its great for the consumer but when you start whoring yourself out what will you do next.Its bad enough everything you buy is made in china.Thats the one thing about europe that makes us north americans differant.They prefer to buy products that are made in europe.We like to buy everything as cheap as we can get it.Then we wonder why we can't find any work.Seems everyone else is taking our jobs.