Minimum Advertised Price (MAP) policies on gun stuff

[Zak Smith]

We can all disagree on whether or not we "like" MAP, but we should be able to agree on what it is and its effects.

Monkeyleg, I think your arguments have some merit for online sales, however...

How does setting a price give the widest exposure?

dogtown tom is right about this point, IMO. MAP prevents undermining and losing segments of the channel that do not sell high enough volume to get the super-tier-0 invoice price that the big high-volume dealers. Having product available in retail stores is valuable so customers can see your product, but if there's no margin, or he can't get close to online prices, the store owner will just drop the product altogether. The same argument can be extended to online dealers where there is little differentiation based on reputation.

 

[Monkeyleg]

Zak, it may be true sometimes that a brick and mortar store owner can't match online prices, but not always. There are the big distributors, and then there are distributors who sell 10% or so less than the big distributors, but who themselves aren't as well known. A dealer who hooks up with them can buy for less than most other dealers.

I mentioned this distributor to a friend who has an established, quality gun store. He was pricing Crimson Trace grips for Glocks at $220, when some online dealers were selling them for $180. He was paying $180 from his distributor. I told him about the small distributor that charged $140. He didn't change distributors. Too bad.

That''s one incident, and I'm sure there's others to support it, and others to offset it.

Here's what really, really bugs me about the way the manufacturers handle this. Their MAP policies skate as close as possible to the price-fixing line. A change of just one or two words would have them in federal court. They're getting as close as they can to breaking the law, and using some really heavy-handed tactics on retailers in doing so.

To suggest that they're standing up for some fine principle or protecting the vulnerable is horsehockey. They're skating close to that legal line for a whole slew of reasons that have nothing to do with altruism. If they'd be up front about it, I'd have more respect for them. To have them lie to me is insulting.

What's the old saying about peeing down my back and saying it's raining?

 

[Zak Smith]

My point wasn't that B&M stores cannot match online prices, it was that having your product in small, medium, and big shops all over the country is helps you sell everywhere; whereas if small and medium shops can't afford the buy-in levels to make enough profit while selling at a competitive price (compared to the big stores), they simply won't carry them at all, and that hurts the sales of the manufacturer, and their "brand" is diminished.

In my prior post, I didn't say anything to suggest that MAP or non-MAP stood up for any principle, nor that I am for or against it personally, but simply that a reason a company might implement MAP is to protect the breadth of its distribution channel and brand ubiquity. That's not a moral statement, just a statement of opinion about how business works.

 

[Monkeyleg]

You make good points, Zak. But here we have a situation where small shops are able to buy in at a price level that allows them to make a profit that's satisfactory for them, and are able to do so while being more competitive on price than the big stores, but are being prevented from doing so.

 

[LensWork]

map pricing is there to protect those brick and mortar stores who's overhead eats up their profit where as some Internet store run out of a basement who's overhead is zilch or next to zilch from under cutting the price so the brick and mortar stores are able to sell product.

True, that is one of the primary reasons/arguments in-favor of MAP.

It's not just manufacturers that make it mandatory... some large retailers demand the manufacturer have a MAP policy or they won't carry the product.

True, mostly it is the smaller brick & mortar retailers that will often not carry a product without an MAP (see reason above).

Sooner or later this is going to court and I predict this sort of thing will be deemed illegal. I believe the legal definition is, "restraint of trade".

MAP has been around for about 25 years it is legal.

Isn't it considered price fixing (which i'm pretty sure is illegal)? Not the advertising side of it but when the products are the exact same price everywhere?

"Price fixing" WAS illegal (a violation of the Sherman Antitrust Act), however, in 2007 the U.S. Supreme Court reversed the ruling of circa 1911 (Dr. Miles Medical Co. v. John D. Park & Sons Co., 220 U. S. 373 (1911)) that made "price fixing" illegal. http://www.supremecourt.gov/opinions/06pdf/06-480.pdf The court ruled that it is no longer automatically unlawful for manufacturers and distributors to agree on setting minimum retail prices. The decision gave manufacturers significantly more leeway, though not unlimited power, to dictate retail prices and to restrict the flexibility of discounters.

 

[Panzercat]

Above post answered most of my questions.
Still, if brick and mortar can't compete, it's time to change business practices or models.

 

[Davek1977]

I know how to shop. These policies have never kept me from a good deal, nor are they an obstacle for most people savvy enough to navigate the web. I won't agree to a purchase without knowing the price, but I've yet to encounter any site or store that has asked me to do so.