MAP pricing: Has it affected your buying habits (i.e. buying less, switching brands, etc.)?

I'll try not to get into too much a rant one way or another regarding MAP, but in full disclosure, I work in an industry where MAP is common, and as a business owner I love it. Allow me a couple sentences to explain why so that some of you can see it from the other side of the mirror from a "little guy" point of view. If you just want an answer to the OP's question, skip to the bottom.

My business is in a quasi luxury non-NEEDED industry. What I run in to literally 10 times a day is, "Well I can 'x' online for less. Can you match the price?" My answer is generally "No, I purchase through a complicated distribution chain in order to get my product in a timely and insured manner on a regular basis instead of stocking ALL of the products. You can basically buy 'x' online cheaper than I can. That particular seller has 20 warehouses across the US. They bring in massive lots or simply drop ship items. I'm a small business. I can't afford to do that."

What I can offer is excellent service, knowledge, and a warranty that people can trust. However, I simply cannot afford to make literal pennies on the dollar and support myself, my employees, pay my taxes, and maintain a physical storefront.

Quite honestly, online sales have driven business to the bottom in many ways. The low-hanging fruit of easy, quick money quickly became a discount arms race. People got used to sure cheap prices on goods and it became something that is expected. I honestly believe that most people assume that if you manufacture a good or own your own business that you are some sort of fat cat bilking the populous with your overly inflated prices. Thank God for the internet! It finally gives the consumer the prices and convenience he deserves!:rolleyes: Here's a fun fact: I run a successful business (ie I have more pennies left on the table at the end of the month than I owe). I might clear what a McDonalds Store Manager makes after you consider the time I put in to make what I make, but I love it. A small business is expensive to own and expensive to run. If your moral compass has any true baring at all, it's even harder to make a living.

Now, enter MAP. MAP does NOTHING to what I can sell my goods for should I choose to. What it does, for me in a non-knife industry, is give me a fighting chance to get a warm body through my door. I know, I know. How greedy of me. I should just work harder, cut my overhead more, maybe ask an employ if they wouldn't mind working for a little less money. That's actually an excellent idea! Maybe some of you could bring it up to your boss. I'm sure they would love to save the company a bit of money. I'm sure there are some folks overseas that could do what you do a little bit cheaper, right? It is ALL about saving money, right?;)

MAP isn't perfect. I totally get that. It seems like price fixing. However it does allow a manufacture to make sure that their brand value is protected as well. It's not like they are actually raising their prices on the dealers of their goods. Big Box Knives with their 13 warehouses may buy an Endura for say, (a totally made up) $35. Little Guy's Knife Shop may pay $45. a MAP of say $50 (once again, totally made up) doesn't cheapen the brand to "low dollar" or "cheap".

One thing that is starting to take hold in my industry instead of MAP is brick-n-mortar exclusive lines, and I think it's a fantastic idea. They have a whole line of products that don't have a MAP because they are not allowed to be sold online. They don't cost any more than typical in-store priced items, but they are the best line of products they manufacture that carry 25% longer warranties. They are geared not for price chasers but for consumers who want high quality from a local dealer.
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To answer the OPs question, MAP hasn't really affected my buying habits beyond allowing me to try something new that I probably wouldn't have blind-bought online. I have been on a ZT kick as of late. The main reason for this is that I actually got to handle one in a local sporting goods store. Paying the same price at a mom n pop as Amazon means that I could give in to instant gratification and walk out the door with my knife in hand. Is my ZT "worth" less than the $200 I spent? I dunno. For what I paid I feel that I got a good knife. I don't think a reasonable MAP is this awful thing if your quality can back up the price.
 
Some excellent points SG!
I'm in HVAC for over 40 years, my family close to 100. With the advent of the net it has made my business much tougher.
Quick example......an expansion valve costs me about $40. To install one in a typical residential system......bout $500. Tons of labor, need multiple specialty tools etc.
I tell a customer the job will cost them $500, they go on line and get the price of the valve and their heads explode.
Most feel they can decide the prices of repairs. I've had some claim I'm making way too much money on a repair.
Factor in I need to guarantee it for a year. Also, as you pointed out, is good service free??
Same thing with electrical motors. Prices are there for everyone to see.
They never factor in the diagnosis, getting the correct motor and installing it correctly.
The public can be a bitch to deal with!
Joe
 
Yes. I buy less, maybe a new knife every couple of months (as opposed to several each month) but that might be a side effect of me settling on a particular number of models and being less keen on experimenting. I also no longer own any Benchmade products, except for a mug.
 
I was at a store that had some benchmade and ZT very little spydercos . He told me he wasn't making any money on them this is before spyderco went to MAP . So I asked him for the prices on some of his benchmade and ZT he gave MAP prices so I stayed quiet for a few and he started talking about how benchmade and ZT have map and that was the price . So I told him that I bought a brand new benchmade 940-1 for $205 he said he must not be a dealer I said I don't know if he is or not but I get my benchmades from him . Next thing he said next time come to me . To bad he's to far for me .
 
FortyTwoBlades said:
Personally I think MAP is all in how it's applied. Spyderco did a good job of setting it low enough not to seriously impact consumers while preserving at least some small margin for retailers. And MAP just fixes the minimum advertised price. It doesn't mean they can't sell it to you below that--that would be price-fixing, which is illegal. It just means they can't advertise it lower. If you think a retailer would be willing to sell it for less than MAP to secure your patronage, just write them an email and see if they're willing.
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Since I know next to nothing, what he said^

Plus @ Spyderco it was simply not allowing their products to be sold for LESS than 40% off MSRP, or so I thought...

Disclaimer: I'm no Spyderco fanboy, I own one and it's a fixed Bob Lum design :D
 
FortyTwoBlades said:
Price collusion would be if the pricing was the result of discussion between two or more competitors, not a unilateral decision on the part of a single manufacturer.
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It is collusion between a manufacturer and a dealer. MAP is OK. Dictating a selling price is not.
 
Knife Outlet said:
It is collusion between a manufacturer and a dealer. MAP is OK. Dictating a selling price is not.
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Nope. It's not. I get that you don't like it, but that practice is legal. William Henry has been using a fixed sales price for a LONG time.
 
Steely_Gunz said:
I'll try not to get into too much a rant one way or another regarding MAP, but in full disclosure, I work in an industry where MAP is common, and as a business owner I love it. Allow me a couple sentences to explain why so that some of you can see it from the other side of the mirror from a "little guy" point of view.

Now, enter MAP. MAP does NOTHING to what I can sell my goods for should I choose to. What it does, for me in a non-knife industry, is give me a fighting chance to get a warm body through my door. I know, I know. How greedy of me. I should just work harder, cut my overhead more, maybe ask an employ if they wouldn't mind working for a little less money. That's actually an excellent idea! Maybe some of you could bring it up to your boss. I'm sure they would love to save the company a bit of money. I'm sure there are some folks overseas that could do what you do a little bit cheaper, right? It is ALL about saving money, right?;)

MAP isn't perfect. I totally get that. It seems like price fixing. However it does allow a manufacture to make sure that their brand value is protected as well. It's not like they are actually raising their prices on the dealers of their goods. Big Box Knives with their 13 warehouses may buy an Endura for say, (a totally made up) $35. Little Guy's Knife Shop may pay $45. a MAP of say $50 (once again, totally made up) doesn't cheapen the brand to "low dollar" or "cheap".

One thing that is starting to take hold in my industry instead of MAP is brick-n-mortar exclusive lines, and I think it's a fantastic idea. They have a whole line of products that don't have a MAP because they are not allowed to be sold online. They don't cost any more than typical in-store priced items, but they are the best line of products they manufacture that carry 25% longer warranties. They are geared not for price chasers but for consumers who want high quality from a local dealer.

To answer the OPs question, MAP hasn't really affected my buying habits beyond allowing me to try something new that I probably wouldn't have blind-bought online. I have been on a ZT kick as of late. The main reason for this is that I actually got to handle one in a local sporting goods store. Paying the same price at a mom n pop as Amazon means that I could give in to instant gratification and walk out the door with my knife in hand. Is my ZT "worth" less than the $200 I spent? I dunno. For what I paid I feel that I got a good knife. I don't think a reasonable MAP is this awful thing if your quality can back up the price.
Click to expand...
It's good to see MAP from the seller perspective. The non-online line of products is an interesting idea and one I was not familiar with. I also very much like to wander into a knife store and pay "MAP" pricing on things. Handling things inside a store has value. But what I don't like is when the brick and mortar store sells at full retail versus MAP. So, you have to pay attention to the price regardless.

Knife Outlet said:
It is collusion between a manufacturer and a dealer. MAP is OK. Dictating a selling price is not.
Click to expand...
I think MAP is okay. One of the Toyota dealers locally has gone to fixed pricing. No negotiations. This is essentially a MAP approach. I like it and at the same time this kind of pricing policy looses something "American" when it comes to widgits.

FortyTwoBlades said:
Nope. It's not. I get that you don't like it, but that practice is legal. William Henry has been using a fixed sales price for a LONG time.
Click to expand...

Guess that's one of the reasons I have never seriously considered a William Henry knife. Actually, I just look at the price and look at something else regardless of "map".
 
Knife Outlet said:
You can read about it here. https://www.ftc.gov/tips-advice/com...itrust-laws/dealings-competitors/price-fixing
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"A plain agreement among competitors to fix prices is almost always illegal, whether prices are fixed at a minimum, maximum, or within some range. Illegal price fixing occurs whenever two or more competitors agree to take actions that have the effect of raising, lowering or stabilizing the price of any product or service without any legitimate justification."

Reading that definition I'd have to say MAP is definitely price fixing, with the manufacturer being the 'leader'. In effect we have manufacturers going to different vendors and having them agree to a price fixing scheme. The dealers aren't setting up the price fixing with each other directly, but are entering into it with the manufacturer acting as the agent.

The dealers are entering into a plain agreement that fixes a minimum price. They are agreeing to take actions that have the effect of stabilizing the price of a product. The only justification is that they'll be cut off if they don't enter into the scheme, I don't know if that can be considered a legitimate justification or not. At best it's walking the line of price fixing.

Just to be clear, I think every company should be free to run however they see fit with very few exceptions. MAPs in the knife industry is not something that I would consider requiring one of those exceptions. If Benchmade requires their dealers to sell Griptilians for $1,000 more power to them. I'm just commenting on the definition as laid out by the FTC.
 
Cory Hess said:
"A plain agreement among competitors to fix prices is almost always illegal, whether prices are fixed at a minimum, maximum, or within some range. Illegal price fixing occurs whenever two or more competitors agree to take actions that have the effect of raising, lowering or stabilizing the price of any product or service without any legitimate justification."

Reading that definition I'd have to say MAP is definitely price fixing
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Nope, not price fixing.
It would have to be between competitors.
Like if Benchmade, Spyderco, Cold Steel, etc. all got together and had nefarious price fixing meetings.
 
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There's nothing saying that they'd have to meet with their competitors or that the agreement would have to be with their competitors. Just that two or more competitors would have to enter into the same agreement. For example, if I for some reason went to Benchmade, Spyderco, and Cold Steel and proposed that they all increase their prices by 20% under the understanding that their competitors would do likewise it'd be price fixing even though those individual companies never met with each other. This is the same exact scenario, just substitute out me meeting with the manufacturers for the manufacturers meeting with the dealers.

To be clear, I'm thinking it's the dealers that are guilty of price fixing and that the manufacturers are acting as their agents.
 
Cory Hess said:
To be clear, I'm thinking it's the dealers that are guilty of price fixing and that the manufacturers are acting as their agents.
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The dealers aren't setting the price though.
They aren't colluding with each other; in fact, it was them trying to undercut each other that led to manufacturers enacting MAP!!!

So you have a single entity setting the price; that is the opposite of competitors having an agreement.
 
Price fixing, collusion, real world example.

Gas prices go up before the long weekend. All stations change their prices at the same time to the same amount despite all being different companies competing with each other. Further this happens every long weekend establishing a pattern of behavior.
 
But they're agreeing to the set price. The FTC site doesn't say anything about who sets the price, just that if you agree to a set price you're guilty. It also doesn't say that that agreement has to be made with your competitors.

"Illegal price fixing occurs whenever two or more competitors agree to take actions that have the effect of raising, lowering or stabilizing the price of any product or service without any legitimate justification."

It just says that two or more competitors have to agree to take the actions. Nothing about who's proposing the actions or who the agreement is with. Just that two or more competitors have made the same agreement.
 
Danke42 said:
Price fixing, collusion, real world example.

Gas prices go up before the long weekend. All stations change their prices at the same time to the same amount despite all being different companies competing with each other.
Click to expand...

And they can profit because everyone with a car needs gas.
Not everyone needs another high-end knife.
I do, but not everyone does. :D
 
Cory Hess said:
But they're agreeing to the set price. The FTC site doesn't say anything about who sets the price, just that if you agree to a set price you're guilty. It also doesn't say that that agreement has to be made with your competitors.

"Illegal price fixing occurs whenever two or more competitors agree to take actions that have the effect of raising, lowering or stabilizing the price of any product or service without any legitimate justification."

It just says that two or more competitors have to agree to take the actions. Nothing about who's proposing the actions or who the agreement is with. Just that two or more competitors have made the same agreement.
Click to expand...

The knife retailer is not a competitor of the knife manufacturer.

But if you see it differently, send the FTC an email.
They probably already know and think it's fine, but hey, why not.
 
Danke42 said:
Price fixing, collusion, real world example.

Gas prices go up before the long weekend. All stations change their prices at the same time to the same amount despite all being different companies competing with each other. Further this happens every long weekend establishing a pattern of behavior.
Click to expand...

There are even more overt examples. In Wisconsin we had a big box store facing serious fines because they broke the minimum markup law. It's nothing more than government imposed price fixing.
 
Time for more ugly facts about life.

The more you buy the less you pay. That means the 90 000 lbs, gorilla's in the room like Blade HQ will pay less than the smaller brick and mortar stores who can only get a few items at a time. In theory this sounds great for the consumer but the reality is that sort of mono-culture wipes out the small players quickly and then prices go up unchecked burning the consumers. If there was just one online source for the blades there would be no option to try before you buy or if you didn't like a store's policy you couldn't vote with your wallet.

The folks who make the knives try to level the playing field so the most number of people can access the blades but the prices aren't so low the dealers go out of business (or so high nothing sells). The use MAP to prevent the big guys from manipulating the market and wiping out their smaller competitors or using your product as a sell against so that your brand is damaged and another competitor gets sales that would have gone to you.
 
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