posted on July 6, 2007 08:10:59 PM new
Just read my Kovel's newsletter and did some looking into very recent (last week) ruling made by the US Supreme Court that might have an effect on our eBay business.
In a nutshell, the 5-4 decision overturned a ruling in which a manufacturer required a minimum price for their retailers.
There's a lot of pros and cons being discussed and I'm wondering what your thoughts are and if it will affect any of you and your eBay business... Do you work with manufacturers who have minimum price restrictions - requiring you to sign contracts ensuring a minimum price? What kind of effect do you think this ruling will have on Internet business overall?
Read some of the details here on Drudge (I don't normally read stuff there, but it came up first in a Google search): http://tinyurl.com/yvjywm
I'm interested in what you think about this - on a business level. Let's try to keep the politics of it to a minimum, please.
Wayne
Never explain -- Your friends do not need it and your enemies will not believe you anyway.
~ Elbert Hubbard
[ edited by TheFamilyBiz on Jul 7, 2007 09:51 AM ]
posted on July 7, 2007 05:21:06 AM new
2008. 2008. 2008. I keep saying that hoping it will come sooner. Why am I not surprised that this supreme court would rule in favor of big business?
I'm not worried about it affecting my eBay business, however, I am worried about how it will affect what I pay in retail stores for the items I buy. And it just keeps getting better. . . .
posted on July 7, 2007 05:34:30 AM new
I read that and wondered about buying rather than selling as well. Does it apply to the secondary market as well? I would think it would only be to retail outlets that are distributors for the companies. It would be hard to regulate resale although I guess they could go after it with VeRO.
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“The illiterate of the future will be the person ignorant of the use of the camera as well as of the pen.”
Maholy-Nagy, Vision in Motion, 1947
posted on July 7, 2007 06:41:31 AM new
photo - the example they used is car buying. The MSRP would be what the retail would have to start at is what I take from the article since there would be not more "suggested price". This would really tie the hands of independent retailers, IMO, in offering prices lower than what the manufacturer wants the product to sell for. Wouldn't this change "once you buy it it is yours to do with what you want"? Or, does this only refer to those who are suppliers for the manufacturer? (i.e., car dealerships, Hallmark stores, etc.) If you are a retailer and you purchase a product from a wholesaler, the wholesaler can still dictate to you what you have to sell their product for? If that's the case, this could be up for a whole bunch of challenges and might be very difficult to track.
Please correct me someone if I'm reading this all wrong.
posted on July 7, 2007 09:33:59 AM new
I have several retailers that have minimum pricing requirements. The SC ruling was surprising to me, because when I researched the issue several years ago, the information I came up with was that MAP were "legal" and enforceable, so I have always followed what my manufacturers required. The fact that they will refuse to sell to me if I don't follow their guidelines has been a strong incentive.
There are several that refuse to allow their products to be sold on eBay because they don't want the price bottom dropped out. When I went to the Dallas Market this summer, I always made sure to ask, and was told in no uncertain terms by several manufacturers that their products are not be sold on eBay.
I actually am feeling fairly positive about the ruling, as I believe it helps retailers to get a fair price and make a fair profit. It's all too easy to engage in a "race to the bottom" on price, devaluing the product, and ending up where no one makes a profit on it. I don't think it necessarily favors "big business" either, since the deep pockets discounters are the ones who can really break a product market by their discounting which the smaller retailers (online or B&M) can't match.
I'm hoping that with the recent ruling, more manufacturers will be willing to allow their products to be sold on eBay because they won't have to worry that the product price will drop to nothing or that the product brand and image they've worked so hard to build will be devalued by discount pricing.
posted on July 7, 2007 10:15:37 AM new
This only applies to retailers and wholesalers who choose to deal with price-setting manufacturers and agree to their terms. I can't see Walmart or Macy's giving the go-ahead to manufacturers' price-setting.
posted on July 8, 2007 04:03:43 AM new
No, the ruling will not affect my business, but I am glad the Court has seen it just to defend a manufacter's right to protect his brand name.
In the case mentioned, pricing regulations aside, Brighton was also defending their position to require a distributor to comply with a signed agreement. The same agreement signed by all Brighton distributors. To allow one disgruntled distributor the leniency to change the terms of the contract would have had serious consequences not only for Brighton but for all of us.
How often do we see complaints on this board because buyers want to dictate our sales terms, ie; contract?
As for a manufacturer ability to regulate their product market price, Fleecies stated it as well I can. Manufacturers and suppliers know their business and costs and understand the need for some type of price controls on brand name. It is the only way they can continue to provide service and quality control.
There are more than enough knock offs and counterfeits in the free market to supply those consumers that are willing to give up quality and service for a cheaper product.
