Price Setting

[dwolson2]

Please explain why you, and other select companies, choose to force all retailers to have a specific price? I look forward to the sales (like black Friday) so I can save a little coin on nice things. It is very frustrating as a consumer that I can't get a good deal on products I like, just because you say I can't.

I am really not trying to pick a fight, or be argumentative. I just want to know why.

 

[tj1627]

As someone who is in retail merchandising, i can tell you it's common practice. MAP is utilized by a lot of companies. Now, I'm in food service, so I can't give many examples outside of my area (other than obvious ones - apple for instance) but brands like red bull, monster energy, coke, Pepsi, etc all use MAP.

It's not there to hurt the consumer, but rather protect them (in a sense). The idea is that no matter where you buy product A at, you're going to pay $199. That way you don't have to worry that a retailer is ripping you off.

Now MAP (did I mention this stands for minimum advertised pricing) doesn't prevent sales and specials. It just means that when a sale happens, it happens for that product from all retailers. Take ecotech radions for example, they were just on sale (maybe still are) everywhere for $100 off the gen 2 and $150 off the pro. Sales still happen, it's just a difference in who controls the price.

An example where you win: let's say you're buying 5 items, you shop around, retailer A has the best deal on the first 2 items, retailer b has the best deal on the 2nd 3 items. If the manufacturers enforced MAP, you could buy from the retailer you liked the best - not who has the best price since they're all the same.


***i laid this out to explain what MAP is and why it is used, this isn't me endorsing its use or condemning it - just explaining. Hope that helps

Tim

 

[dwolson2]

Yes, it does, I appreciate you explaining why its done.

Now I do have 1 question,
For the longest time, monsters were 1.99+, lately I have found them as low as 1.19. but a lot of places still charge over 2$. Did Monster just decide to lower the MAP or do companies sometimes just price what they are going to price and ignore the MAP?

Oh and if its just speculation, thats good enough

 

[dwolson2]

Oh one more question. I am assuming wholesale is less that MAP. So they stand to make "X" amount of money on any product that enforces MAP. Could a company give store credit for a sale of the product(kind of like brs points) but more. Like buy this radion and get 50$ in store credit?

 

[tj1627]

Oh one more question. I am assuming wholesale is less that MAP. So they stand to make "X" amount of money on any product that enforces MAP. Could a company give store credit for a sale of the product(kind of like brs points) but more. Like buy this radion and get 50$ in store credit?

Monster implements MAP only on case pricing (at least where I'm aware of it - I work in food service, not grocery retail). I think their MAP is at 26.90/case right now. So just about $1.12/can. Most places like samsclub or costco will make a few dollars on a key item like that but not much. Remember, MAP only sets the minimum. So if a gas station wants to charge you $2.25 a can they can. But if the gas station across the street charges $2.00 they might not sell much.

The difference in the two examples is quantity of resellers. Hundreds of places sell monster, so they can each fluctuate pricing a bit based on region and market. How many places sell ecotech? I've only ever bought them online - maybe 10 major retailers online? If they raise the price above MAP, they lose sales.

But the LFS down the street might charge more - they're providing the convenience of no shipping fees and you get the part immediately.



To answer your second question, I suppose it's possible. It's all related to what is in the marketing agreement. They're all different. One place you can see something like this happening is in consumer electronics. Ever go on bestbuy's website and see something on sale but they won't tell you the price until you put it in your cart? (Or more recently they make you start the checkout process before they show it) that's them trying to skate under the MAP agreement. "What? No, we're not *advertising* the price to be that low "

 

[dwolson2]

Thanks again for explaining it. What you said makes a lot of sense.

 

[tj1627]

Anytime

 

[erndog1001]

It should be iilegal. If I buy something from somebody. It should be up to me what I sell it for.

 

[Duality]

Here's the simple fact. There products cost so much cause they are wroth it.

 

[rollermonkey]

It should be iilegal. If I buy something from somebody. It should be up to me what I sell it for.

To sell MAP products, you sign a contract to only advertise at the MAP price point.

If you can find someone who can buy wholesale to offer you a different price, you can get a deal. (I bought something this year at $50 below MAP just that way.)

If the manufacturer catches you advertising below the contracted MAP price point, they cut off your supply and you don't get to sell that product any more.

It works for vendors because if you buy, say an MP10, from them, you might add a few items to the cart to save on shipping costs, and they make a profit on the whole sale. Plus, now you've taken the "effort" to set up an account and whatnot, so you might be more likely to purchase from them the next time you need something.

I don't like it either, but if you can be patient and wait for authorized sales or have a hookup somewhere, you can get around it.

 

[Eastamherstbias]

I thought it was done to level the field between the online and mom and pop stores.

 

[frogspawn74]

Map pricing kills the brick and mortar stores!!! I would rather buy locally but with the expense some of the items and the current tax laws I can't afford not to buy from people I don't know.

The non-tax and free shipping trump buying locally for high priced items

Brick and mortar stores should be allowed to adjust pricing for taxes without getting in trouble on local pickup PERIOD!

 

[Eastamherstbias]

if you did to have MAP. the online stores would kill the brick and mortar stores.

 

[frogspawn74]

Not if ecotech set the purchase price no matter how big or small of an order is placed by the retailer. Map the price for internet sales but allow the locals to adjust for taxes in store.

At least the locals could make just a little profit. Most brick and mortar stores don't even want to carry an inventory of high priced items because of the internet/free shipping/taxes.

It's simple $465 free shipping online. Or, $465 tax included for local pickup. And you can still advertise both ways online. And at the end of the day I can try and support my lfs and not have to pay 50-100 more than needed because of tax laws.

Most people under this policy would more than likely buy local. By no means would online mega stores kill the local guy. It's human nature to buy from people you like, and also to save money if you can. Don't know about you but I don't know online/out of state retailers on a personal level.

 

[Dashylock]

It should be iilegal. If I buy something from somebody. It should be up to me what I sell it for.

:lolspin: The supplier dictates selling price in the contract, the reseller agrees to those terms..why you ask...because they know they have the opportunity to sell out quality products due to demand, and regardless of pricing.

 

[erndog1001]

Not if ecotech set the purchase price no matter how big or small of an order is placed by the retailer. Map the price for internet sales but allow the locals to adjust for taxes in store.

At least the locals could make just a little profit. Most brick and mortar stores don't even want to carry an inventory of high priced items because of the internet/free shipping/taxes.

It's simple $465 free shipping online. Or, $465 tax included for local pickup. And you can still advertise both ways online. And at the end of the day I can try and support my lfs and not have to pay 50-100 more than needed because of tax laws.

Most people under this policy would more than likely buy local. By no means would online mega stores kill the local guy. It's human nature to buy from people you like, and also to save money if you can. Don't know about you but I don't know online/out of state retailers on a personal level.

Amen brother!!