MAPP good overall, since it allows many players to compete -- important to prevent Evil Corp from dominating the market. Calling it "price fixing" may be a bit too harsh, since I never saw any of the required conditions fulfilled by knife manufacturers (unfair high pricing, conspiracy, artificial control of supply and demand, etc.). That's as far as my economic theory goes. On a personal level, I waste less time spotting *that* deal over the internet, which I consider a big plus.
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Lets talk about MAPP!
- Thread starter whitty
- Start date
OP talked about resale value, and one example I ran into recently was a technical book from the '70's going for nearly $100 on Abe's (used) books. My first thought is that I was glad I already owned it, next I began to wonder if it had gone out of print. No. It was available new for about $20. So, some of this sorts itself out by common sense...
I think where the real "unfairness" comes in is when an item is produced in China for 0.10 and sold here for $100 and tries to appear it is offering "a deal" to the customer.
Meanwhile, the person who makes the same item in the USA for $50 has to compete with the guy making it for 0.10, both selling it for $100.
I would rather know exactly what I am buying, where it was made, etc., and then talk about pricing.
I think where the real "unfairness" comes in is when an item is produced in China for 0.10 and sold here for $100 and tries to appear it is offering "a deal" to the customer.
Meanwhile, the person who makes the same item in the USA for $50 has to compete with the guy making it for 0.10, both selling it for $100.
I would rather know exactly what I am buying, where it was made, etc., and then talk about pricing.
Just my .02 on something that sort of got missed in the conversation up until annr. The value of the product the consumer is willing to pay always outranks MAP or SRP regardless of the evil empire pushing it. Think CRK or CPK versus Benchmade/Spyderco. Clearly suggested retail and MAP on the latter can be ludicrous compared to what the knives are really worth (and selling for). In the former case (if there even is MAP/SRP), the prices are close to the value and what you're getting for the price. This is the same reason the secondhand market CRK's are almost full price or higher, yet on the whole excluding sprints the latter brands are 25-50% off already used (or almost what they were worth in the first place).
Just because someone takes a $100 knife and says you can advertise it for sale less than $200, doesn't raise the value for the consumer and they find the discounts regardless when the $100 knife is priced credibly (discounted to what the price should have been).
MAP/SRP strategies only really work to protect brands and products (mostly high end and or luxury quality brands) that have inherent value to a loyal consumer as well as the manufacturer. They are used to ensure rogue operators don't randomly dilute brand value, but instead adhere and maintain brand messaging. These brands generally reward dealers with advertising or other money to cover dealer costs as a perk for supporting these strategies or take it away from rogue operators.
Mass market (Mid-Low end brands) product SRP/MAP strategies just insult the consumer by pretending something is more valuable to pay for manufacturer supply chain infrastructure costs. Department store national branded merchandise have done this for years yet one can still buy clothes in a department store cheaper than the materials, construction, labor, and transportation would appear to cost.
As a buyer of mid-high end stuff, I haven't found MAP to affect me really at all and buy a good portion of my non-clothing toys from the 2nd hand market (Cars, Motorcycles, Guns/Knives, Computers, etc..). Spyderco Sprint PM2 pricing seems to be my only nemesis with annoyingly inconsistent pricing almost randomly set by dealers carrying exclusives or just a national release. Never know if the new release is $115, $145, $190, $225, or whatever. I won't loose sleep but annoying regardless.
Just because someone takes a $100 knife and says you can advertise it for sale less than $200, doesn't raise the value for the consumer and they find the discounts regardless when the $100 knife is priced credibly (discounted to what the price should have been).
MAP/SRP strategies only really work to protect brands and products (mostly high end and or luxury quality brands) that have inherent value to a loyal consumer as well as the manufacturer. They are used to ensure rogue operators don't randomly dilute brand value, but instead adhere and maintain brand messaging. These brands generally reward dealers with advertising or other money to cover dealer costs as a perk for supporting these strategies or take it away from rogue operators.
Mass market (Mid-Low end brands) product SRP/MAP strategies just insult the consumer by pretending something is more valuable to pay for manufacturer supply chain infrastructure costs. Department store national branded merchandise have done this for years yet one can still buy clothes in a department store cheaper than the materials, construction, labor, and transportation would appear to cost.
As a buyer of mid-high end stuff, I haven't found MAP to affect me really at all and buy a good portion of my non-clothing toys from the 2nd hand market (Cars, Motorcycles, Guns/Knives, Computers, etc..). Spyderco Sprint PM2 pricing seems to be my only nemesis with annoyingly inconsistent pricing almost randomly set by dealers carrying exclusives or just a national release. Never know if the new release is $115, $145, $190, $225, or whatever. I won't loose sleep but annoying regardless.
- Joined
- Nov 20, 2005
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- 19,385
The effectiveness of MAPP pricing depends on dealers not selling below the advertised price and eliminates the good old boy stuff. I think some companies set their MAP policy too high and there should be wiggle room for enterprising retailers to set price. I don't buy or sell knives on the secondary market. Protection of the secondary market means nothing to me. Do you see the secondary gun market protected? Nope. I would be very comfortable eliminating MAPP or setting a lower MAP standard. MAPP does not guarantee a dealer gets the price cheaper either as I understand it.
- Joined
- May 29, 2004
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Can we continue talking about the real elephant in the room, ridiculously inflated MSRP? What's the point, other than trying to scam the consumer into thinking they're getting a "deal"? Which then leads to MAP prices based on a "discount" from a ludicrous number that nobody will ever pay. This has always pissed me off, from way back in the Cold Steel Special Projects mail order days
You know, I hadn't, for whatever reason, really thought about that aspect. Very good point.Can we continue talking about the real elephant in the room, ridiculously inflated MSRP? What's the point, other than trying to scam the consumer into thinking they're getting a "deal"? Which then leads to MAP prices based on a "discount" from a ludicrous number that nobody will ever pay. This has always pissed me off, from way back in the Cold Steel Special Projects mail order days
I love Spyderco and don't mean to single them out, but the MSRP on the Paysan is $800. Holy cow, nobody is paying that, making any discount based on it meaningless.
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MSRP used to be how a dealer was able to make a profit. Most consumers want a deal. No, scratch that, most consumers want to BELIEVE they got a deal. MSRP was a good way to offer a product at a lower advertised price. A good rule of thumb in my industry is that MSRP is 100% over dealer cost. It would go something like this: A particular item we sold would cost the dealer buying from distribution say, $20. MSRP would be $39.99. I could mark it up 1.6, make $12 and the consumer felt as if they saved $8. MRSP has always been a marketing/sales tool. The Manufacturer, up until MAPP, generally didnt care what you sold it for. We never followed the game. Some things we marked up 100% because they sold at that. Some things we were lucky to make an extra 10%. It just depended.
No, it isn’t.
While “MAP” often doesn’t dictate *selling* price, it sometimes does. There are goods manufacturers that enforce minimum pricing will dump dealers who discount their goods below a prescribed level.
This isn’t a felony. In fact, it isn’t illegal at all. “Price fixing” is when *competitors* conspire to set pricing.
Back on topic, I have no strong feelings about MAP pricing one way or the other.
- Joined
- Jun 16, 2003
- Messages
- 20,207
Indeed, reality may not match reality. Price fixing is a federal felony. A REAL IDIOT MIGHT TRY TO ENFORCE A SALES PRICE STANDARD, LEAVING HIMSELF IN THE HANDS OF THE WITNESS TO HIS CRIMINAL CONDUCT.
knifeswapper
Knife Peddler
- Joined
- Sep 3, 2004
- Messages
- 3,301
I could argue the exact opposite. MAPP favors the big boys. They have 20 employees and a large building to maintain; thus they have to gather larger margins to cover the overhead. The little one man shop's can be successful with much lower margins due to much lower overhead. But by implementing MAP, the factory is promising the big boy that they will not let them be undersold by the small shop. It is funny how many times it is sold as "protection for the brick and mortar"; but it is protection for the stores big enough to have a commercial presence and advertising dollars. Many of which you have to ring a doorbell to have them come let you in because foot traffic is nearly non-existent today.
Map is great unless the brand are being idiots about it, such as giving out wholesale discounts to bigger organizations, that pretty much destroys all their credibility for me. If there is a map so that everything remains fair, then the wholesale price should remain the same for everyone whether you buy 1,000 knives or 10. it reveals their true agenda, which is not brand value.
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- May 9, 2002
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- 12,692
I dont know about the knife industry, but in mine, the manufacturer really dissuades you from buying direct. Distribution is their target customer. Whatever front end/back in volume deals do not matter to me, because even though I am a relatively "big guy" that buys $1,000,000+ worth of product from the distributor each year, the manufacturer with MAPP won't let me advertise an ABC widget for less than $1000. I can sell it for whatever I want, but I can't advertise the price online or in print for under $1000. Whether I make $900 or $9 is up to what margins I need to cover and what pricing I can negotiate from the distributor. The manufacturer really doesn't care what MY price is as long as I don't try to advertise it for under $1000.