The US Supreme Court ruled on this issue (referred to as "resale price maintenance") a few years ago, essentially overturning nearly a century of law. That ruling encouraged the behavior we're seeing manufacturers like Canon engage in now. Here's a brief description of the original Supreme Court case from the website of the law firm Steptoe and Johnson:
ronno wrote:
I still do not understand how this is possible. Apple and the U.S. book publishers just lost in court due to (illegal) price fixing - *because they were setting a minimum selling price*.
So, how do we suppose Nikon can legally do it?
An individual retailer agreeing to abide by conditions of a franchise contract is not the same thing as a group of companies conspiring to set prices. In our franchise contract (Takamine guitars) we agreed to MAP pricing and dealer discount structure based on inventory stocking and placement. Pretty standard contract for popular products.
We had old stock of another line (Alhambra) on our website and didn't bother to update to the price increases and another dealer complained to the US distributor we were selling below MAP. It was only off by 5%...
BluesWest wrote:
The US Supreme Court ruled on this issue (referred to as "resale price maintenance") a few years ago, essentially overturning nearly a century of law. That ruling encouraged the behavior we're seeing manufacturers like Canon engage in now. Here's a brief description of the original Supreme Court case from the website of the law firm Steptoe and Johnson:
ronno wrote:
I still do not understand how this is possible. Apple and the U.S. book publishers just lost in court due to (illegal) price fixing - *because they were setting a minimum selling price*.
So, how do we suppose Nikon can legally do it?
Price fixing involves collusion between competitors, a single manufacturer setting a minimum advertised price is not price fixing unless they do it based on input or scheming from another.
Still there are always ways around it. I mean at places like Costco the have the 'instant cash rebate' which is credited to your bill at checkout. The sale price of the item itself does not change. Some stores have rewards programs, they offer points for purchases which can then be traded for gift cards or credit at checkout -- in that case just offer triple points for the item, essentially placing it on sale.
There may be loopholes in the consumer protection laws, but loopholes go both ways. Just like dealers have found enough ways to get around minimum advertised price, they'll figure out ways to get around minimum selling price types of arrangements. Dealers are businesses themselves, and businesses can be very clever and crafty when their livelihood depends on it.
Also, this is not in relation to Canon, but one trend you're starting to see with some of the other smaller players is companies cutting dealers out of pre-sales and early sales altogether. Basically the initial manufacturing run of that product. This is because in the pre- and early phase of a product's life, a new model camera practically sells itself, a network of dealers doesn't add any value at that phase. A company might not have huge distribution, but they will consult with another company, or have an exclusive in-house dealer, collect orders via their website. And when that initial production run comes in, as many orders as came in through their website, all those get shipped (direct-to-customer) before any product is shipped out to dealers.
So basically, what we would have had instead of the Beach + Adorama sales (1500+) at something just about a reasonable price (should be $2699 full retail) is a total sales number of maybe 10-20 cameras at Canon's FU price of $3500.
Good for Canon. Hope they sell 3 or 4 more cameras at their insane prices. Can't say I'll help them reach that sales goal...
The market is pretty much saying the price is around $2700-2800 for 5D III and Canon wants to fight the market through MAP and punitive measures for dealers who are trying to make a living.
The big electrical retailers do 'price matching'...which generally means a particular product costs exactly the same anywhere in the UK whatever the company...the excuse being they match the competitors lowest price.
Which just looks like price fixing to me...supposedly illegal here.
ronno wrote:
As far as I know, price fixing in the US is illegal. Setting a minimum selling price is price fixing as far as I know. And it's illegal, right?
MAP sets the min advertized price and doesn't affect the selling price, theoretically, so technically it's not price fixing. Unilateral pricing sets the minimum selling price but the retailer is free to charge more if he can get away with it, so that's not price fixing either. And, I believe traditionally price-fixing refers to retailers colluding together to establish selling prices.
See Leegin for the Supreme Court decision which made all this possible.
Canon obviously doesn't like the idea that the free market is not valuing their cameras as much as they think they should be valued. Maybe they should take the hint.
arnold1 wrote:
The market is pretty much saying the price is around $2700-2800 for 5D III and Canon wants to fight the market through MAP and punitive measures for dealers who are trying to make a living.
i don't like what canon are doing, or have a problem with your valuation of the 5d3, but do you really think this is a knee-jerk reaction on the part of canon to the current pricing/sales of the 5d3?
i have a feeling this is something that's been in the works for quite some time.
Why all the complaints? As Henry and others have said...this is not a minimum sales price, it only mandates the advertised price. The cameras will be sold for whatever amount the retailer decides. Beach can still sell for $27xx, as can Adorama. No issue.
Prevelige wrote:
Why all the complaints? As Henry and others have said...this is not a minimum sales price, it only mandates the advertised price. The cameras will be sold for whatever amount the retailer decides. Beach can still sell for $27xx, as can Adorama. No issue.
Not for long Prevelige. Sounds like Canon intends to put and end to this starting in Nov.
Reread the thread...
Sounds like scare tactics to stir up sales. "Better hurry up and buy our cameras now, before the price goes up." Yeah right! If Canon tries to stick to these jacked up list prices, pallets of cameras will just sit in stock rooms gathering dust.
Sorry Canon, not falling for it.
Next time give us a better boost in photo quality if you want to move cameras. Hope they do a better job on the 7D replacement.
Aussie RRP for 5D III is $4399 with most shops selling it for around $3799. I saw it on sale the other day where all Canon items were 10% off so it was $3450 or so. It would make you cry if I could tell you what I paid through work.
Down under we have DD Photographics
Shipping out of Singapore and offering full warranty which I hear is effectively factory warranty but backed by Nikon/Canon SE Asia. DHL shipping is a max of 10 hours e way to Singapore which DDP pays.
DDP Price
5D3 $2958
D800 $2895
D600 $1998
Factory, Min Recomended Retail Price (Discount Digital Warehouse)
5D3 $3598
D800 $3419
D600 $2479
dealers who source their stock through CANON / NIKON tell horror stories about those who buy gray But effectively, DDPs entry into the field is responsible for a downward movement in CANIKON official prices
Tim
