CRKT UPP

As much as UPP sounds like a violation of antitrust laws, I think it's been found legal in courts because a dealer has the right to sell to whoever they want — even if they do it just to punish those who don't sell at their cost. From what I know, other companies like Benchmade have also done this. Although they say it's just MAP, it really is a UPP.
This is exactly correct. BM, Spyderco, and ZT all do this. It is not map. It is more of what CRKT is calling UPP. And it is not price fixing based on the definition put forth by the FTC.

This is not the first nor the last that people will/have confused this policy with price fixing.
 
While MAP policies are legal, price fixing is not. It violates anti trust laws. CRKT is trying to get around the law by saying they don't want to regulate prices and don't ask dealers to agree to the UPP. But then they threaten the dealer who doesn't follow the UPP. That threat makes it price fixing. If this were tested in court, this document would be laughed out of the court room. I'm not going to fight them. If nobody else does, they will probably get away with it until there is enough of it in the industry to motivate a class action. I'm out of the loop now. I'm just providing information to the industry.

This has been legal since 1919, when the Supreme Court decided US v. Colgate. The opinion basically says "the Sherman Act does not prevent a manufacturer engaged in a private business from announcing in advance the prices at which his good may be resold and refusing to deal with wholesaler and retailers who do not conform to such price." Which is why CRKT calls the policy "unilateral"; the Sherman Act bans "agreements" to set prices, and a unilaterally-established policy is not an "agreement." Where they may run into problems is under state laws, which may bar this sort of thing, but that's highly variable depending on the jurisdiction.

As much as UPP sounds like a violation of antitrust laws, I think it's been found legal in courts because a dealer has the right to sell to whoever they want — even if they do it just to punish those who don't sell at their cost. From what I know, other companies like Benchmade have also done this. Although they say it's just MAP, it really is a UPP.

I'd be curious to see the products and prices they have set. Is it all their products or just a few?

This is exactly correct. BM, Spyderco, and ZT all do this. It is not map. It is more of what CRKT is calling UPP. And it is not price fixing based on the definition put forth by the FTC.

This is not the first nor the last that people will/have confused this policy with price fixing.

MAP and a Colgate policy are very different; MAP only deals with advertised pricing, while Colgate also deals with actual sale prices. By all accounts I've heard, Spyderco has a MAP policy, but does not attempt to dictate actual sale prices.
 
This has been legal since 1919, when the Supreme Court decided US v. Colgate. The opinion basically says "the Sherman Act does not prevent a manufacturer engaged in a private business from announcing in advance the prices at which his good may be resold and refusing to deal with wholesaler and retailers who do not conform to such price." Which is why CRKT calls the policy "unilateral"; the Sherman Act bans "agreements" to set prices, and a unilaterally-established policy is not an "agreement." Where they may run into problems is under state laws, which may bar this sort of thing, but that's highly variable depending on the jurisdiction.





MAP and a Colgate policy are very different; MAP only deals with advertised pricing, while Colgate also deals with actual sale prices. By all accounts I've heard, Spyderco has a MAP policy, but does not attempt to dictate actual sale prices.
I'd have to dig into what zt and spyderco actually do, if they even make it public but know BM does what crkt is doing. It was discussed to death as they were the first major manufacturer to do it.
 
I'd have to dig into what zt and spyderco actually do, if they even make it public but know BM does what crkt is doing. It was discussed to death as they were the first major manufacturer to do it.

I found a post from December 2013 about BM's UPP, so they definitely do it.
I'd kind of be surprised if ZT does it, since Shun, another KAI USA brand, is eligible for discounts at all of the major kitchenware retailers.
 
This is exactly correct. BM, Spyderco, and ZT all do this. It is not map. It is more of what CRKT is calling UPP. And it is not price fixing based on the definition put forth by the FTC.

This is not the first nor the last that people will/have confused this policy with price fixing.
It has been a dozen years or more since I sold Benchmade so I can't comment there. Spyderco and ZT do not do this. They have standard MAP policies.
 
To put this into some wider context, this sort of thing has been becoming increasingly common in the consumer electronics sector, for at least the last decade, if not longer. There are reasons for it, counterfeit goods, differing regulations for safety testing in different countries, as well as just simple shipping and logistics. I suspect that some companies are taking cues from other parts of the consumer goods market and trying to find how to deal within the new paradigm that we find ourselves in. Some of these moves may prove ineffective or even harmful, while others may work out. For example, in Australia we have companies making a big deal over "grey imports" the reality is that most products that come from offshore come through just a few very large importers. Now sometimes that's good, it meant a big single voice for our knife-law change a couple years ago.

Sometimes its frustrating. What happens when you want a product that the importer has decided not to stock? Or what happens when the company has a lock down on the imports and throws a 70% markup, and holds the warranty as a hostage? Now often the most egregious of these happen in the smaller markets where certifications are important. Safety gear, camping gear like stoves, and the like are all hit a bit harder. Shoes not so much, but there is a wider market and thus its harder to hold a customer to using a single vendor. Am I really going to spend 100$ for a basic pair of chuck taylors? Anyone got an estimate of the market value of CRKT against... Cascade Designs, or Panasonic? We are very small fish in a very big sea.

So as this (international online) market matures we will see companies make fiat decisions that may well sink them. Not all lessons can be applied from other industries. But we as consumers have to also recognize that there is often more than one factor at play, or that an effect we see may have had a motivation that we don't recognize. Right thing for wrong reasons and all that. Further, automated systems (even with people in the loop) lead to decision trees that are often Kafkaesque as they form unexpected feedback loops. One example I saw was two used copies of a book on amazon. The two sellers had set algorithmic pricing systems and since they were the only two copies, the prices were driven to incredible heights within weeks, before someone noticed. That's just one example, but when it gets extrapolated out to both distribution and pricing contracts, these things can have unintended consequences. The fact that there is a massive elephant in the room of a company that doesn't need to sell at profit which could devastate the retail sector of the knife industry, both killing retailers on price and makers on degraded reputation, further complicates the problems faced. I can also understand a company not wanting its product sold new on ebay, however its a great solution for a low volume business to have a secure sales portal with all the protections and consumer confidence.

As for CRKT, I think its a well intentioned policy on their part, but I think its going at the wrong problem in the wrong way. The reality is that no matter which problem they are trying to fight, be it pricing, counterfeits, reputation management, there is a better way to go about it, but one that may require a more realistic viewpoint of their place in the market. I like that they do odd stuff for cheap, the market needs that. So we all loose if they go away. But with that being said, if the collective C-suite ego thinks that they are going to make the jump to "premium" brand without the market backing them, I question the sanity of that thought. Nothing wrong with filling your niche well, even if its not the most prestigious.
 
It has been a dozen years or more since I sold Benchmade so I can't comment there. Spyderco and ZT do not do this. They have standard MAP policies.
I'm kinda surprised CRKT went down this road being as they are the most common brand at all the big discount stores being sold at a discount. Curious why you decided to drop Benchmade 12 years ago?
 
I'm kinda surprised CRKT went down this road being as they are the most common brand at all the big discount stores being sold at a discount. Curious why you decided to drop Benchmade 12 years ago?

They tried to hurt my company. They think the own the industry. Nice knives, not friendly management.
 
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