X-53mph Posted July 11, 2020 Share Posted July 11, 2020 https://ww.musictech.net/news/why-was-korg-fined-1-5-million/ Korg, Roland and GAK collectively fined a total of £5.75million for enforcing the illegal practice of Resale Price Maintenance (RPM). Link to comment Share on other sites More sharing options...
craigb Posted July 11, 2020 Share Posted July 11, 2020 I can't help but wonder how much extra was made due to the practice versus what the fine was... If Korg (for example) made an extra £2 million, then they still came out ahead £0.5 million after the £1.5 millon fine. Link to comment Share on other sites More sharing options...
slartabartfast Posted July 11, 2020 Share Posted July 11, 2020 Leegin Creative Leather Products, Inc. v. PSKS, Inc., 551 U.S. 877 pretty much legalized this practice in the United States. While it would be illegal for various distributors to band together and set a price for a product, it is perfectly legal for a manufacturer to retaliate against any seller that sells for less than their manufacturer's suggested retail price. A typical 5-4 decision and another example of how the US has largely sided with businesses against individuals in what is laughingly called competition enforcement. 2 Link to comment Share on other sites More sharing options...
paulo Posted July 11, 2020 Share Posted July 11, 2020 I'm not sure that I see what the problem is. It's nothing new and if a manufacturer sets a price minimum on their products as a condition of supply to retailers then retailers can either choose to stock their product or not. Ultimately, if the set price is unrealistic the manufacturer will soon find out that he has a warehouse full of product that nobody is buying and will have to act accordingly. From the consumer POV although it might eliminate price competition v other retailers on the other hand you can buy it anywhere safe in the knowledge that it's not going to be any cheaper elsewhere and save all the searching and indecision. It might also make a few think a little harder re their level of service as if all prices are the same then they need to make sure that customers do not want to look elsewhere. 2 Link to comment Share on other sites More sharing options...
slartabartfast Posted July 12, 2020 Share Posted July 12, 2020 (edited) Not every buyer is so lazy that he will consider having to pay an exorbitant price for a product a reasonable cost for not having the burden of doing comparative shopping. That choice is taken away by fixing the price at manufacture--a practice that only benefits the manufacturer. While it is certainly a choice for sellers to not carry a product, it is also a choice for them to offer the product at a lower price and consequently take a lower profit in order to incentivize a purchase. An end price need not be so high as to result in a failure of the manufacturer to sell at all to represent an imposition of an unfair rent being collected by him. Service is largely a myth in retail as in every other sale. All a customer expects is an exchange of goods for money, unless the boutique is offering a blow$job or its equivalent along with the purchase. In that case the service itself is a separate product being bundled under the same price. What the MSRP does for the seller is permit him to avoid competition with other sellers who might choose to offer a lower price. That is arguably a good thing for a small seller and protects him against being bullied by a big seller who by economies of scale could afford to underprice him. A mom&pop would be protected from a wealthy discount house, but only at the level of the price at which he can sell. Nothing in the MSRP scheme prevents the manufacturer incentivizing large sellers to buy the product in larger quantities by offering them a discount--thus ensuring that they make a higher profit at every sale than the mom&pop. The protection the small seller enjoys is pretty limited. The big seller making a higher profit on the same sale can use some of the extra income to advertise, to lower prices on other products or to offer blowjobs with his sales, which the small seller cannot afford to do. In fact it is new--Legan vs PSKS was decided in 2007. Although it determined that such a scheme was not strictly forbidden under the Sherman Antitrust Act, it does not mean that such a practice is ultimately fair to the consumer or will produce the most effective competition among sellers to deliver a lowest price. A law seeking to maximize the benefit to the individual as opposed to business would not permit it. The British law apparently does so. the US law does not. Edited July 12, 2020 by slartabartfast Link to comment Share on other sites More sharing options...
Gswitz Posted July 12, 2020 Share Posted July 12, 2020 (edited) I've struggled with this myself. It used to be that comparison shopping was hard to do, but, with the web, we are very fast at it. This legal change that definitely inflates prices seems to help retailers and manufactures at the expense of the consumer. How much does this differ from the manufacturers raising prices and giving rebates to retailers based on sales like the auto dealers do? The USA retail stores definitely struggle. And in the face of the internet became the places people tried products, but stopped being where purchases were made. For a while, i would price shop and offer my local shop that chance to match the price. I don't know about what should be legal, but i can see how some legal contortions could come about to protect businesses in the face of massive change in the way people buy. In the end, will the benefit fade to nothing and the cost remain for eternity? Looks that way, as music store after music store closes its doors. So now, price fixing is legal and no one can compete with Amazon on price. So how can there be a traditional competitor? Amazon is protected by our court from competition. https://en.m.wikipedia.org/wiki/Leegin_Creative_Leather_Products,_Inc._v._PSKS,_Inc. Edited July 12, 2020 by Gswitz Link to comment Share on other sites More sharing options...
paulo Posted July 12, 2020 Share Posted July 12, 2020 (edited) 55 minutes ago, slartabartfast said: Not every buyer is so lazy that he will consider having to pay an exorbitant price for a product a reasonable cost for not having the burden of doing comparative shopping If the price is "exorbitant" then don't buy it. Beyond basic needs, buying things isn't compulsory. If nobody buys it, watch the price come down. Consumers have the collective power to bring about price reductions on just about everything if only they would choose to do so. 55 minutes ago, slartabartfast said: Service is largely a myth in retail as in every other sale Because IMO large retailers rely too much on attracting customers by having the lowest price, so they think they can get away with being largely useless in every other respect. Mom & Pop's, as you call them, have to give a better customer experience to stand a chance against the big boys when they can't compete on price. Level the playing field and as you say, M&P's win and the big boys will have to up their game. The ability of a large retailer to undercut prices is IMO not about championing the cause of the customer but more about trying to hoover up all the customers for themselves. The fact that the consumer gets a slightly reduced price is merely a temporary side effect of that greed. As I'm sure has been said many times before, when Amazon is the only place left on the planet to buy things, watch the prices go up. Edited July 12, 2020 by paulo 1 Link to comment Share on other sites More sharing options...
RobertWS Posted July 12, 2020 Share Posted July 12, 2020 Whenever the government distorts the free market....bad things invariably happen. Link to comment Share on other sites More sharing options...
marcL Posted July 12, 2020 Share Posted July 12, 2020 Which "free market" are you talking about? You mean the one of the 20th century? Today there are many branches where a few companies define the market price (2-3 big competitors do not hurt themselves). There are many governments (and the EU) that define laws that restrict the free market. There is the industry that creates a lot of incompatible goods/repair parts to bind the customer to their overpriced stuff. In the EU, countries limit the free market by pushing up transportation/postage prices. Another example are big U.S. corporations (like some Jeans producers) that force the U.S. retail not to sell to Europe to protect the European importers. Those are just my 2 cents to this story, it is only a mouse view of the big mess that is going on! ? Link to comment Share on other sites More sharing options...
slartabartfast Posted July 12, 2020 Share Posted July 12, 2020 2 hours ago, RobertWS said: Whenever the government distorts the free market....bad things invariably happen. Blanket statements of this sort are in essence religious. Are you prepared to criticize the unfortunate consequences of the thirteenth amendment? Link to comment Share on other sites More sharing options...
SteveStrummerUK Posted July 12, 2020 Share Posted July 12, 2020 Didn't Shure used to do something similar to this? I'm certain I remember reading somewhere that they set a minimum retail price for their more popular products, and that was the reason e.g. that you never saw a brand new SM57 on sale. I think the article explained that Shure were once so plagued by the massive flood of SM57 counterfeits coming from the far east that the price of a genuine microphone was made non-discountable so the buyer should then know that if he was buying 'new' at less than this price he would most likely be buying a fake. Makes sense I suppose. On a broader level, it may or may not be true but it always seems to me anyway that a lot of The UK's bigger/well known music stores (Andertons, GAK, GuitarGuitar, DV247 etc) have some sort of 'joint' pricing policy. At least I've noticed it a lot on USA-made imported guitars/basses - especially so on the newest versions of particular ranges. It seems to relax as newer models hit the ranges, and then prices begin to vary. I know from experience when I bought my US Strat and US Tele because I'd been researching prices for ages before taking the plunge, and the price of each model on virtually every website I checked was always identical. As it happens, I got 'lucky' on both, but the 'cost' of a much-cheaper retail price for a new guitar was to buy an older model. In both cases, I was looking to buy a US Standard model of each guitar - it was around the time a few years ago when Fender was upgrading their range and morphing the US Deluxe range into the Elite range (now Ultra); and I managed to do a deal with GuitarGuitar for a Deluxe HSS Strat for around the same price as new model Standard, and had a cracking result from GAK on my Deluxe Tele. Link to comment Share on other sites More sharing options...
paulo Posted July 12, 2020 Share Posted July 12, 2020 11 minutes ago, SteveStrummerUK said: Didn't Shure used to do something similar to this? I'm certain I remember reading somewhere that they set a minimum retail price for their more popular products, and that was the reason e.g. that you never saw a brand new SM57 on sale. I think the article explained that Shure were once so plagued by the massive flood of SM57 counterfeits coming from the far east that the price of a genuine microphone was made non-discountable so the buyer should then know that if he was buying 'new' at less than this price he would most likely be buying a fake. Makes sense I suppose. I vaguely remember reading this too. I'm not sure that I'm having the "we're charging you more for your own good" marketing line, but also I see nothing wrong with a manufacturer taking steps to not dilute their brand for what are effectively luxury goods. Nobody ever died because they couldn't afford a certain microphone and the market will prevail. Spectrasonics is another company that seem to keep a very tight rein on prices and tbh it doesn't really bother me. I can decide if the price of the product is "worth it" to me and act accordingly and If I do buy I can at east do so safe in the knowledge that it won't be 50% off somewhere next week. 1 Link to comment Share on other sites More sharing options...
SteveStrummerUK Posted July 12, 2020 Share Posted July 12, 2020 2 hours ago, paulo said: Nobody ever died because they couldn't afford a certain microphone VST plug-in and the market will prevail. Bapu: "Hold my beer" 1 1 Link to comment Share on other sites More sharing options...
RobertWS Posted July 12, 2020 Share Posted July 12, 2020 5 hours ago, slartabartfast said: Blanket statements of this sort are in essence religious. Are you prepared to criticize the unfortunate consequences of the thirteenth amendment? What a ridiculous argument. Slavery is the opposite of a free market. Try the eighteenth amendment. How did that work out? If you believe in government control of the markets, you believe in Socialism. Socialism doesn't work. It never has. It never will. I wish the public school systems taught economics. Link to comment Share on other sites More sharing options...
msmcleod Posted July 12, 2020 Share Posted July 12, 2020 This is verging into politics now... locking this thread. 1 Link to comment Share on other sites More sharing options...
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