Daniel B asked:
For example Microsoft requires that stores sell their game consoles and games at retail price. Also my local Yamaha ATV dealer will no longer bargain on prices and sells everything at retail. Why should this be legal? These companies should sell items to resellers and then the reseller should be able to decide how much to charge. Also why do manufacturers do this and how do they benefit from this practice?
For example Microsoft requires that stores sell their game consoles and games at retail price. Also my local Yamaha ATV dealer will no longer bargain on prices and sells everything at retail. Why should this be legal? These companies should sell items to resellers and then the reseller should be able to decide how much to charge. Also why do manufacturers do this and how do they benefit from this practice?
September 21st, 2009 at 03:51
So, people who go to the manufacturer will always get a better deal.
September 24th, 2009 at 05:30
Because the manufacturer retains ownership of their products and can determine how they are marketed and sold.
Free market, else, someone could just steal the products and sell them for whatever they want.
It also protects all the distributors so that they are not competing with each other.
And, at the Yamaha dealer I would bet that the dealer hasn’t actually bought & paid for the ATVs yet. He is cosigning them, which means he doesn’t pay Yamaha until he makes a sale.
September 27th, 2009 at 08:42
I’m sure in this Election year, you have heard the term Lobbyists.
Now you can see, how they earn their money. They ‘contribute’ to a lawmakers campaign fund, or as a bribe,pick your choice.
Then the lawmakers pass a bill, that allows Manufacturers to set their prices and the dealers, aren’t allowed to cut them.
So many of our products, if you do much shopping around, are widely varied in their prices. That’s because the dealers can make those price changes. Often stores will use these as loss leaders. They know that once a customer is in their store, they usually, just don’t buy one product, but often, pick up a few other items, while they are in there.
Even if the customer doesn’t buy anything else, they still have been exposed to the store and product, and may come back again. So they find it a good way to lure in customers.
I don’t have a problem with manufactures setting prices, but the dealers should have options too, on the pricing.