Price-fixing or collusion?

[imported_Sasha]

I know many that would like to voice a hatred for Monster Cable. I am right along with them. Three years ago I bought a Monster HTS-2500 power stripe. On the box Monster had stamped $249.95. You can buy this product in retail for exactly that price at Bad Buy (aka Best Buy) and not a penny less. In fact, you can't even use Bad Buy's coupons on Monster products.

Ok, so I go to a place where the company's original idea is to buy in volume to offer great discounts on products. Monster is not one of them. In fact, the price reduction is less than a dollar from the Monster-listed price. This was Wal-Fart (aka Wal-Mart).

I do get the concept of MAP, or Minimally Advertised Pricing, but this seems to go well beyond that modus. In fact, Bad Buy will not even discount if you complain to a manager, even when you tell them that HiFi Buys regular sales people can discount 10%, which is more than BB & WM discounting combined.

Now, how much did I pay for my HTS-2500? $164.50 and it was from a wholesaler. So, I know that wholesalers made money on the deal and I know that HiFi Buys made a profit if I bought it from them at $225, so I wonder about where the WM company idea went and also wonder where the 'best' went at BB?

As such, I considered two possabilities: price-fixing by the manufacturer, or collusion by the retailers. Curious as to what others think about this aspect of Monster Cable/Power, their products and the retailing pricing scheme there in. I know some online aution sites (ePray, Videogon, etc.) had blind sellers that are willing to sell for less than all of these retailers can sell for in combined discountings, but still its well above the price I paid for mine at a wholesalers.

Is the buying power of all of these retailers small in comparison to a low-voltage wholesaler's buying power in respect to monster products, or is this the typical condition for retailers to take when faced with products from Bose, monster, etc., etc., etc.? I have to laugh at the exclusion list every month when I read the latest 10% off BB coupons.

 

[AMDZen]

Monster cable's aren't even that good. Well, they are good, they have good conductive materials like gold plating and good shielding, but there are also OTHER manufacturer's out there that make cable equal to or better than, for a much much better price.

Try getting the gold plated and heavy shielded cables from somewhere like HERE good prices, good shipping and good cables.

 

[njmodi]

 

[Scarpozzi]

I just hate that so many people believe that Monster Cables are the only company that makes cables.

If I were honestly going to rewire my home theater, I would probably go to an electronics supply store or order from a home theater supply company. I don't particularly like CC, BB, or anyone else who tells me that I have to use Monster Cables to get good sound....most of them don't know the first thing about conductivity.

 

[imported_Sasha]

Folks, I do not buy cables made by Monster. If I cannot make the cable myself I will always go to someone that I know that makes custom cables (Canare) or find a more thrifty vendor online or out of a business park.

This is not what I wanted to focus on (cable quality), but rather which element is most to blame: retailers or the manufacturer for the pricing condition.

 

[TerryMathews]

Is it price fixing? Yes. Does it meet the legal definition? Probably not.

These companies have around 100 years of history to learn from, and very expensive lawyers on top of that. They know exactly how to word their contracts in order to avoid this type of charge.

 

[EagleKeeper]

Also excellent marketing hype.

If people believe that what is available it head and shoulders above the rest, they are willing to pay a premium for it. They have already splurged hundreds if not thousands of $$ of equipment; they want to say that they have the best and are willing to pay for it.

Monster and others know this, therefore they refuse to discount the price. The fact that the price is so much higher is a selling factor to the uneducated.

The retailers understand this strategy also, therfore why should they discount something that has no viable competition?

 

[imported_Sasha]

Originally posted by: TerryMathews
Is it price fixing? Yes. Does it meet the legal definition? Probably not.

These companies have around 100 years of history to learn from, and very expensive lawyers on top of that. They know exactly how to word their contracts in order to avoid this type of charge.

I'm not sure what you are saying. Are you saying that the worded contract is such to confuse and intimidate the retailers and not the wholesalers? And how do we know their lawyers are expensive?

 

[MrChad]

Your use of the terms "Bad Buy" and "Wal-Fart" shows that this will be a mature and enlightening discussion.

 

[jagec]

Originally posted by: Sasha
Folks, I do not buy cables made by Monster. If I cannot make the cable myself I will always go to someone that I know that makes custom cables (Canare) or find a more thrifty vendor online or out of a business park.

And buying a power stripe (sic) is that much better?

For $250 it'd better clean your house and raise your kids.

 

[GagHalfrunt]

Originally posted by: TerryMathews
Is it price fixing? Yes. Does it meet the legal definition? Probably not.

These companies have around 100 years of history to learn from, and very expensive lawyers on top of that. They know exactly how to word their contracts in order to avoid this type of charge.

It's not price fixing or collusion. Price fixing is when COMPETITORS join forces to make it impossible to buy a given commodity at below a certain cost (a.k.a. OPEC). A manufacturer ALWAYS has the right to set wholesale and lowest-advertised prices on their own products. If they set prices too high they're only hurting themselves and not hurting the consumer. That's the key, the consumer having a choice to pay the high price for a given brand or to get another brand for less. Monster has created an artifical pricing point to foster a mistaken belief in the superiority of their garbage. Dimwits believe it, smart people buy something else. It's NOT price fixing unless all cable makers united to do the same thing and drive up prices on all brands marketwide.

 

[VirtualLarry]

Originally posted by: GagHalfrunt
A manufacturer ALWAYS has the right to set wholesale and lowest-advertised prices on their own products.

Not exactly. They have the right to sell items for whatever they want to sell them for, but they don't have any legal right (AFAIK) to control retail prices, or retail advertising. Now, mfg's often have various "co-marketing programs" set up, that they subsidize the marketing/advertising for the product, in exchange for some quid-pro-quo action, with the retailer giving the mfg more control over things, including prices.

That's why everything is MSRP - "suggested", rather than MRP.

Originally posted by: GagHalfrunt
That's the key, the consumer having a choice to pay the high price for a given brand or to get another brand for less. Monster has created an artifical pricing point to foster a mistaken belief in the superiority of their garbage.

And it's their consistently-higher prices that are used to prop up that mistaken belief. Realistically speaking, it IS price-fixing, and IMHO they should be punished for that, it really is no different than a cartel, but that's unlikely. Another area that this often happens in, ever since the Nintendo era, is console gaming hardware. Rarely do you ever see the systems sold for less than the mfg's current MSRP. Another case of clear price-fixing.

The reason that this practice should be punished, is that it is clearly anti-competitive. If I own a store, and want to make more sales than a competing store, I should be allowed to lower the prices at which I sell my goods, in order to entice customers to buy those items at my store, rather than my competitors. But in this case, if I did that, then it is likely that my supply of video-game consoles would mysteriously dry up.

 

[GagHalfrunt]

Originally posted by: VirtualLarry

Originally posted by: GagHalfrunt
A manufacturer ALWAYS has the right to set wholesale and lowest-advertised prices on their own products.

Not exactly. They have the right to sell items for whatever they want to sell them for, but they don't have any legal right (AFAIK) to control retail prices, or retail advertising. Now, mfg's often have various "co-marketing programs" set up, that they subsidize the marketing/advertising for the product, in exchange for some quid-pro-quo action, with the retailer giving the mfg more control over things, including prices.


That's why everything is MSRP - "suggested", rather than MRP.

Wrong. They can and will control both actual retail price and advertised price by distributor trade agreements. The vendors will need to agree to terms to be able to carry the product in the first place. If you want to buy a Monster Cable for $100 and then resell it for $10 that's okay. Their distributors don't have that right.

Originally posted by: GagHalfrunt
That's the key, the consumer having a choice to pay the high price for a given brand or to get another brand for less. Monster has created an artifical pricing point to foster a mistaken belief in the superiority of their garbage.

And it's their consistently-higher prices that are used to prop up that mistaken belief. Realistically speaking, it IS price-fixing, and IMHO they should be punished for that, it really is no different than a cartel, but that's unlikely. Another area that this often happens in, ever since the Nintendo era, is console gaming hardware. Rarely do you ever see the systems sold for less than the mfg's current MSRP. Another case of clear price-fixing.

The reason that this practice should be punished, is that it is clearly anti-competitive. If I own a store, and want to make more sales than a competing store, I should be allowed to lower the prices at which I sell my goods, in order to entice customers to buy those items at my store, rather than my competitors. But in this case, if I did that, then it is likely that my supply of video-game consoles would mysteriously dry up.

This is where you demonstrate that you don't have even a shred of a clue about what price fixing really is. Price fixing is competitors agreeing not to compete on price so that consumers have no option other than to pay the fixed price no matter which brand they buy or where they buy it. A single company CANNOT PRICE FIX, period. No matter what Monster decides that THEY want to charge for THEIR products it is NOT price fixing unless they convince other cable makers to use the same pricing structure. What part of that don't you comprehend? You might not like Monster's products and you might not like their prices, but they're not doing anything wrong, anything shady, anything thousands of other companies don't do nor are they using any loopholes to get away with it. It is 100% legal as they're setting the price for only THEIR OWN PRODUCTS. They're not a freaking cartel as they're a single entity and they're making no effort to control the cable market as a whole. It's not anti-competitive, you're free to buy from any of their competitors. It's a common, widely used tactic to protect their distributors from cutting each others throats in price wars.

You desperately need to pull your head out of your ass long enough to learn something. This is simple, even the typical ATOTer should be able to understand it. Price fixing and collsion are agreements among competitors not to compete to the detriment of the consumer. Monster has made no agreements with their competitors, no attempt to influence the price of other items and no effort to influnce the prices of the rest of the market. It's not even close to being price fixing.

 

[axnff]

Originally posted by: GagHalfrunt

Originally posted by: VirtualLarry

Originally posted by: GagHalfrunt
A manufacturer ALWAYS has the right to set wholesale and lowest-advertised prices on their own products.

Not exactly. They have the right to sell items for whatever they want to sell them for, but they don't have any legal right (AFAIK) to control retail prices, or retail advertising. Now, mfg's often have various "co-marketing programs" set up, that they subsidize the marketing/advertising for the product, in exchange for some quid-pro-quo action, with the retailer giving the mfg more control over things, including prices.


That's why everything is MSRP - "suggested", rather than MRP.

Wrong. They can and will control both actual retail price and advertised price by distributor trade agreements. The vendors will need to agree to terms to be able to carry the product in the first place. If you want to buy a Monster Cable for $100 and then resell it for $10 that's okay. Their distributors don't have that right.

Originally posted by: GagHalfrunt
That's the key, the consumer having a choice to pay the high price for a given brand or to get another brand for less. Monster has created an artifical pricing point to foster a mistaken belief in the superiority of their garbage.

And it's their consistently-higher prices that are used to prop up that mistaken belief. Realistically speaking, it IS price-fixing, and IMHO they should be punished for that, it really is no different than a cartel, but that's unlikely. Another area that this often happens in, ever since the Nintendo era, is console gaming hardware. Rarely do you ever see the systems sold for less than the mfg's current MSRP. Another case of clear price-fixing.

The reason that this practice should be punished, is that it is clearly anti-competitive. If I own a store, and want to make more sales than a competing store, I should be allowed to lower the prices at which I sell my goods, in order to entice customers to buy those items at my store, rather than my competitors. But in this case, if I did that, then it is likely that my supply of video-game consoles would mysteriously dry up.

This is where you demonstrate that you don't have even a shred of a clue about what price fixing really is. Price fixing is competitors agreeing not to compete on price so that consumers have no option other than to pay the fixed price no matter which brand they buy or where they buy it. A single company CANNOT PRICE FIX, period. No matter what Monster decides that THEY want to charge for THEIR products it is NOT price fixing unless they convince other cable makers to use the same pricing structure. What part of that don't you comprehend? You might not like Monster's products and you might not like their prices, but they're not doing anything wrong, anything shady, anything thousands of other companies don't do nor are they using any loopholes to get away with it. It is 100% legal as they're setting the price for only THEIR OWN PRODUCTS. They're not a freaking cartel as they're a single entity and they're making no effort to control the cable market as a whole. It's not anti-competitive, you're free to buy from any of their competitors. It's a common, widely used tactic to protect their distributors from cutting each others throats in price wars.

You desperately need to pull your head out of your ass long enough to learn something. This is simple, even the typical ATOTer should be able to understand it. Price fixing and collsion are agreements among competitors not to compete to the detriment of the consumer. Monster has made no agreements with their competitors, no attempt to influence the price of other items and no effort to influnce the prices of the rest of the market. It's not even close to being price fixing.

Funny, you use such strong language to prove your ignorance. In the Nintendo case referred to, the price-fixing was based on collusion between Nintendo and their distributors. Nintendo can set their price. They cannot legally, however, force another company to sell at a certain price. To enforce this, they were withholding supply from any distributor or dealer who discounted pricing to be competitive. That, and a variety of other strong-arm tactics, got them into trouble in the US in the early '90s (IIRC), and in 2002 in the EC.

Answers.com lists a variety of definitions of price-fixing. Notice that it does not have to be manufacturers of goods colluding to price-fix, but any set of competitors, including distributors or dealers.

This is not to say that Monster Cable (or Intel, or Microsoft, or Bose, or whoever) is definitely engaged in price-fixing. They probably have very carefully structured contracts that give great incentive to dealers to sell at or near MSRP. As long as they don't strong-arm their dealers/distributors into setting the price, they are probably technically okay.\

On the other hand, it keeps the poseurs (more money than brains) from buying up the really great gear. Let them have their Bose and Monster Cable. Those who bother to find out can spend far less on Paradigm and Acoustic Research (for instance) and have a substantially better system. Everyone wins..

 

[Mill]

Originally posted by: axnff

Originally posted by: GagHalfrunt

Originally posted by: VirtualLarry

Originally posted by: GagHalfrunt
A manufacturer ALWAYS has the right to set wholesale and lowest-advertised prices on their own products.

Not exactly. They have the right to sell items for whatever they want to sell them for, but they don't have any legal right (AFAIK) to control retail prices, or retail advertising. Now, mfg's often have various "co-marketing programs" set up, that they subsidize the marketing/advertising for the product, in exchange for some quid-pro-quo action, with the retailer giving the mfg more control over things, including prices.


That's why everything is MSRP - "suggested", rather than MRP.

Wrong. They can and will control both actual retail price and advertised price by distributor trade agreements. The vendors will need to agree to terms to be able to carry the product in the first place. If you want to buy a Monster Cable for $100 and then resell it for $10 that's okay. Their distributors don't have that right.

Originally posted by: GagHalfrunt
That's the key, the consumer having a choice to pay the high price for a given brand or to get another brand for less. Monster has created an artifical pricing point to foster a mistaken belief in the superiority of their garbage.

And it's their consistently-higher prices that are used to prop up that mistaken belief. Realistically speaking, it IS price-fixing, and IMHO they should be punished for that, it really is no different than a cartel, but that's unlikely. Another area that this often happens in, ever since the Nintendo era, is console gaming hardware. Rarely do you ever see the systems sold for less than the mfg's current MSRP. Another case of clear price-fixing.

The reason that this practice should be punished, is that it is clearly anti-competitive. If I own a store, and want to make more sales than a competing store, I should be allowed to lower the prices at which I sell my goods, in order to entice customers to buy those items at my store, rather than my competitors. But in this case, if I did that, then it is likely that my supply of video-game consoles would mysteriously dry up.

This is where you demonstrate that you don't have even a shred of a clue about what price fixing really is. Price fixing is competitors agreeing not to compete on price so that consumers have no option other than to pay the fixed price no matter which brand they buy or where they buy it. A single company CANNOT PRICE FIX, period. No matter what Monster decides that THEY want to charge for THEIR products it is NOT price fixing unless they convince other cable makers to use the same pricing structure. What part of that don't you comprehend? You might not like Monster's products and you might not like their prices, but they're not doing anything wrong, anything shady, anything thousands of other companies don't do nor are they using any loopholes to get away with it. It is 100% legal as they're setting the price for only THEIR OWN PRODUCTS. They're not a freaking cartel as they're a single entity and they're making no effort to control the cable market as a whole. It's not anti-competitive, you're free to buy from any of their competitors. It's a common, widely used tactic to protect their distributors from cutting each others throats in price wars.

You desperately need to pull your head out of your ass long enough to learn something. This is simple, even the typical ATOTer should be able to understand it. Price fixing and collsion are agreements among competitors not to compete to the detriment of the consumer. Monster has made no agreements with their competitors, no attempt to influence the price of other items and no effort to influnce the prices of the rest of the market. It's not even close to being price fixing.

Funny, you use such strong language to prove your ignorance. In the Nintendo case referred to, the price-fixing was based on collusion between Nintendo and their distributors. Nintendo can set their price. They cannot legally, however, force another company to sell at a certain price. To enforce this, they were withholding supply from any distributor or dealer who discounted pricing to be competitive. That, and a variety of other strong-arm tactics, got them into trouble in the US in the early '90s (IIRC), and in 2002 in the EC.

Answers.com lists a variety of definitions of price-fixing. Notice that it does not have to be manufacturers of goods colluding to price-fix, but any set of competitors, including distributors or dealers.

This is not to say that Monster Cable (or Intel, or Microsoft, or Bose, or whoever) is definitely engaged in price-fixing. They probably have very carefully structured contracts that give great incentive to dealers to sell at or near MSRP. As long as they don't strong-arm their dealers/distributors into setting the price, they are probably technically okay.\

On the other hand, it keeps the poseurs (more money than brains) from buying up the really great gear. Let them have their Bose and Monster Cable. Those who bother to find out can spend far less on Paradigm and Acoustic Research (for instance) and have a substantially better system. Everyone wins...

I say you are wrong, and here's why: Oakley won't let you sell their glasses at less than retail pricing. If you discount them in any way they will refuse to sell to you anymore. Is that not the same as this

 

[Vic]

Manufacturers can enforce their own MSRP. If a vendor refuses to sell at MSRP, then the manufacturer can simply pull the product from them. End of story. Not price-fixing. Not illegal. Not a strong-arm tactic. You don't like the price, don't buy it.

 

[DrPizza]

Originally posted by: Vic
Manufacturers can enforce their own MSRP. If a vendor refuses to sell at MSRP, then the manufacturer can simply pull the product from them. End of story. Not price-fixing. Not illegal. Not a strong-arm tactic. You don't like the price, don't buy it.

exactly.

The OP isn't news by any degree.

Ever notice how pretty much everyone sells playstations for the same price..
xboxes for the same price?

It used to always be 199.99 (or 199.98 depending on the chain). Never 198.99 or 194.99.. always a penny or two away from 200.

 

[HardcoreRobot]

First of all, you are a retard for spending that much money on Monster.

Second, you are a retard for creating a thread about how evil Wal-Mart is, but then patronizing their store and telling us about it.

Thirdly, what exactly is your point? Best Buy is not the only retailer for that item, so them pricing it higher than some competitors is not price-fixing or collusion, its just bad business. You got what you wanted and you feel you need to rant about a store that has a high price? Get over yourself.

 

[VirtualLarry]

Originally posted by: axnff
In the Nintendo case referred to, the price-fixing was based on collusion between Nintendo and their distributors. Nintendo can set their price. They cannot legally, however, force another company to sell at a certain price. To enforce this, they were withholding supply from any distributor or dealer who discounted pricing to be competitive. That, and a variety of other strong-arm tactics, got them into trouble in the US in the early '90s (IIRC), and in 2002 in the EC. Answers.com lists a variety of definitions of price-fixing. Notice that it does not have to be manufacturers of goods colluding to price-fix, but any set of competitors, including distributors or dealers.

Thank you, finally someone with some sense. The most accurate defination, in this particular case, would be this one:

vertical price-fixing (n.)
An illegal arrangement in which parties at different levels of a system of production and distribution act to fix the market price of goods; esp resale price maintenance
- Vertical price-fixing is a per se violation of antitrust laws.

Which refers to this one as well:

resale price maintenance (n.)
A form of illegal price-fixing in which a manufacturer compels different retailers to resell a product at the same price and thereby prevents competition

Note the mention of both "illegal" and "price-fixing". Thank you.

 

[imported_Sasha]

Originally posted by: HardcoreRobot
First of all, you are a retard for spending that much money on Monster.

Second, you are a retard for creating a thread about how evil Wal-Mart is, but then patronizing their store and telling us about it.

Thirdly, what exactly is your point? Best Buy is not the only retailer for that item, so them pricing it higher than some competitors is not price-fixing or collusion, its just bad business. You got what you wanted and you feel you need to rant about a store that has a high price? Get over yourself.

And what are you for posting to what you consider a retard's post? Master Retard?