Price fixing

[Selous Scout (aka LegTrap)]

I thought it is illegal to have price fixing on the sale of goods in our country.If this is the case why is it that both Polar and Go-pro prices are all the same wherever you try and buy the product !

I can understand if prices are similar from one store/shop to another BUT to be exactly the same,surely not.

[gogo@]

I thought it is illegal to have price fixing on the sale of goods in our country...

I can understand if prices are similar from one store/shop to another BUT to be exactly the same,surely not.

My question exactly. I asked someone at CL that and was told it's because Polar prices (in this instance) are set by the distributors and outlets all go by that. WHY?? Can't say... so I bought mine from CRC at WAY below local prices even after taxes and postage. Dumb way to do business.

[divernick]

Oakley do it too, worldwide

[dirtrider]

Have you ever heard of recommended retail prices ?

[TwiggzSA]

I don't think price fixing applies to one product but rather to products between different manufacturers. Like if Garmin priced their products the same as polar then I'd start calling foul.

[izzypzee]

Have you ever heard of recommended retail prices ?

To explain, most companies suggest a retail price for their product. Retailers usually base prices on that. You can sell for more or less if you choose.....

[Frankenberg]

That's not price fixing - retailers are free to price their product exactly as they like; and producers are allowed to target any retail selling price they like - even if it's the exact same as their competitor's. It just means they have efficient sales reps.

 

Price fixing is an agreement between manufacturers to divide/share a market through various pricing strategies. A pretty big difference.

[Hairy]

What happens if a certain distributor is unhappy due to one outlet selling the product below RR and other outlets are getting upset RE this ... then the distributors stop supplying the cheaper outlet based on this ... could this be considered price fixing?

[Frankenberg]

Nope. It can be considered anti-competitive though; and there are recent cases of exact such situations having gone to court. However, you'll find that most distributors are incentivised on bottom line - so again, if the rate of sale goes up and they make their margins, all the better. It's not in their interests to restrict market supply, especially with very niche products... Price wars are generally best avoided though - even though the consumer wins in the short term, it really doesn't do anything positive for the equity of a brand and the quality cues of a product in the long term. Whether a manufacturer condones this sort of behaviour depends on exactly what they're selling, I guess.

[Sarge]

Hi,

What ever the arrangements, we "the consumers" always land up with the short end of the deal.

Sad

Sarge

[Octavian]

Its called a free market system. When it functions correctly prices are very close to each other. Anything else means that the distribution of information in the market is impeded somehow.

[GLuvsMtb]

Hi,

What ever the arrangements, we "the consumers" always land up with the short end of the deal.

Sad

Sarge

I disagree. What usually happens in the marketplace is that higher prices acts as a catalyst for "new" brands to enter the marketplace. This stimulates market growth and force the price down over time (unless there is collusion between companies or if the new company is simply a "no-name" brand subsidiary of the established co). Garmin/TomTom and more recently Garmin/Bryton are good examples of this. My first Garmin Nuvi was priced at about R 4000. I can now pick up a better unit for about R1200. TomTom now offer better maps and live traffic updates and this may get me to switch. TomTom would have taken much longer to get traction into the market and prices would have stayed high for longer.

[TNT1]

. My first Garmin Nuvi was priced at about R 4000. I can now pick up a better unit for about R1200.

 

Yeah, but that has more to do with the technology/price curve than distribution and retail recommended pricing.

[GLuvsMtb]

I disagree. What usually happens in the marketplace is that higher prices acts as a catalyst for "new" brands to enter the marketplace. This stimulates market growth and force the price down over time (unless there is collusion between companies or if the new company is simply a "no-name" brand subsidiary of the established co). Garmin/TomTom and more recently Garmin/Bryton are good examples of this. My first Garmin Nuvi was priced at about R 4000. I can now pick up a better unit for about R1200. TomTom now offer better maps and live traffic updates and this may get me to switch. TomTom would have taken much longer to get traction into the market and prices would have stayed high for longer if the Garmin units were cheaper to start off with. Garmin would then also have taken longer to develop new features due to a lack of competition.

[GLuvsMtb]

Yeah, but that has more to do with the technology/price curve than distribution and retail recommended pricing.

Sure, but with a monopoly, development of new features takes longer and prices stay high for longer.

[Eddy Gordo]

Unfortunately I believe that every price is fixed. I happened to have a discussion with someone about a supplier one day, He told me the supplier threatened to push up the wholesale price, if he didnt push up his selling price!!! What the hell man. How can one do that, and basically still try and do business in this country?