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View Full Version : Will this kill Amazon and other online sellers?



Michael Weber
06-29-2007, 11:02 AM
This article from the NY Times is about the Supreme Courts decision yesterday to overturn almost 100 years of tradition and allow manufactures to set and enforce minimum prices. Looks like if your planning to buy anything online you better do it soon. This ruling will effect any discounter, online or not.
http://www.nytimes.com/2007/06/29/washington/29bizcourt.html (http://www.nytimes.com/2007/06/29/washington/29bizcourt.html)

edit... Just clicked on the link to confirm I got it correct. Took a few seconds for the article to pop up after the website appears.

David G Baker
06-29-2007, 11:13 AM
I wonder if the decision will do that much damage because some retailers raise their prices quite a bit over the manufacturers suggested retail price. The ruling could encourage a lot more importing of foreign goods as well.

Henry Cavanaugh
06-29-2007, 11:23 AM
Not understanding the Sherman Anti trust laws as it stands now. Someone like festool will only allow its dealers to sell at one price. What is actually changing?

Scott Loven
06-29-2007, 11:27 AM
They will continue to get around it by offering free shipping, free extras, catigory discounts, and/or by refusing to sell a companies merchandise if they set a minium price.
Scott

Jim Becker
06-29-2007, 11:33 AM
I do not believe this ruling is going to have a major effect as it is not pointed at individual companies who already can set minimum pricing. This ruling is relative to multiple companies "agreeing" on minimum pricing and anti-trust/collusion. Perhaps one of our woodworking attorneys will give their quick (but non-binding :) ) thoughts on this action by the court...

Bob Childress
06-29-2007, 11:36 AM
The Supreme Court decision is more likely to help certain high-end brands maintain their product niche. It is unlikely to have much impact on major consumer brands which already face stiff competition.

In our world, the decision means that Festool, for example, can safely enforce its no-discount rules for its distributors. But Festool is a very small part of the WW market. I cannot imagine DeWalt trying this because there are too many alternatives to DeWalt products for it to make sense. Plus, their dealers would raise holy heck.

Dealers get caught in the middle. On the one hand, one can argue that they should be able to set prices anywhere they wish, even at a loss, if that is their desire. On the other hand, many of us have lamented the demise of the full-service "mom and pop" hardware store. And why did they go out of business? Because discounters could undercut them on price.

The only other major tool player that might go for it is Fein.

Bob Childress
06-29-2007, 11:37 AM
I do not believe this ruling is going to have a major effect as it is not pointed at individual companies who already can set minimum pricing. This ruling is relative to multiple companies "agreeing" on minimum pricing and anti-trust/collusion. Perhaps one of our woodworking attorneys will give their quick (but non-binding :) ) thoughts on this action by the court...

I am afraid I don't agree, Jim. It is the first category that is directly addressed by the decision. The second category remains illegal as it was.

Bonnie Campbell
06-29-2007, 11:40 AM
I know when we bought our Husqavarna riding mowers they're priced at the manufactures price. And we were told not to expect to find them any lower. Businesses either sell at the manufactures price or not at all.

Jim Becker
06-29-2007, 11:41 AM
Bob, when I made my comments, it was based on news articles on the air, not the NYT article...which I have now read. Therefore, I agree, that this may have some bearing on discounters. But I also know that many manufacturers have effectively had minimum pricing rules of various kinds for a long time. They may have been "creative", but they were there.

Scott Loven
06-29-2007, 11:41 AM
Festool sets a minimum advertised price (MAP) and will not continue to sell to a company that advertises below that price. When you own something you can sell it for any price you want, no company can stop you, but they can stop selling to you if you do not follow their policy.
Scott

Bob Childress
06-29-2007, 11:42 AM
Bob, when I made my comments, it was based on news articles on the air, not the NYT article...which I have now read. Therefore, I agree, that this may have some bearing on discounters. But I also know that many manufacturers have effectively had minimum pricing rules of various kinds for a long time. They may have been "creative", but they were there.

Now you're quite right about that. :) Sony springs to mind. :D

Jim Becker
06-29-2007, 11:45 AM
Sony was one that I was thinking of...

Cliff Rohrabacher
06-29-2007, 2:30 PM
I think this was a wrong ruling.

Have you any idea how bloody much we pay for stuff???

I got a $4000.00 Texas Sizzler III, BBQ grill for $2000.00 just because the manufacturer and the retailer were having a pissing match over discounts and I got the last one that was on the floor. The maker was angry at the deep discounts the retailer was offering and was refusing to sell to them unless they bent the knee.

So they ended up not doing business any more and I got a steal.


I just bought two April Aire Dehumidifiers ( one is a 90 pint a day model and the other is a 150 pint a day unit).
I got 'em both for $2800.00 - shipped.

The local retailer (a HVAC installer) wanted $4000.00 for just one unit and there was no installation. The units are to dry a cellar ( the second for my shop) so there was not any ducting. Set it down run a bit of poly tube connect a little giant pump and plug it in.

Then I bought the two little giant pumps on FLEAAAAA-BAYYYY for $58.00 (both for that) when every retailer I found wanted $48 each.

I think the removal of pricing freedoms is a scary thing.

Cecil Arnold
06-29-2007, 4:01 PM
OMG, I completely agree with Cliff, and that's scary.:D :D :eek:

Michael Weber
06-29-2007, 4:21 PM
I think the removal of pricing freedoms is a scary thing.

This is my thinking as well. You can count on Big Business and the rich and powerful people that run them to turn this to their advantage. As control on business is removed, business because of human nature will become bigger and greedier at the cost of you know who. After all, business is just a big contest. Do we want to leave the foxes in control of the hen houses? Not me, I prefer a little control to moderate and regulate possible unbridled greed. Only the government has the power to do that. Remember energy deregulation? The older I get the less conservative I become.

Randy Denby
06-29-2007, 6:31 PM
This is my thinking as well. You can count on Big Business and the rich and powerful people that run them to turn this to their advantage. As control on business is removed, business because of human nature will become bigger and greedier at the cost of you know who. After all, business is just a big contest. Do we want to leave the foxes in control of the hen houses? Not me, I prefer a little control to moderate and regulate possible unbridled greed. Only the government has the power to do that. Remember energy deregulation? The older I get the less conservative I become.

Its all adding up to have's/ havenot's.....no mo middle class. Since we are competing with people making.....what, 20 dollars or less a week? And big business in control due to the threat of taking our jobs elsewhere, and doing it, our income is being leveled out to the lowest common denominator.... one way or the other. Government better wake up, cuz their tax base is gonna shrink.....and the money will be worth less and less

BTW, the gulf between the have 's /havenots will continue to ever expand

I've been conservative most of my life...but I think we need checks and balances no matter who is in charge.
Shoot...now I'm Po'ed and its friday night

Bill Lantry
06-29-2007, 7:39 PM
I have to agree with Randy on this one, although for different reasons (though I must say his main point is the center of the argument). The key here is "who will benefit, in the long run?" It will most certainly not be the consumers, or the middle class. And while I'm no conservative, I wish the court would stop overturning settled matters. For you legal eagles, stare decisis seems to have no meaning anymore. The next day, they gutted brown v. board of education. It's hard to know where to stand anymore.

And that's the point on this one. The whole thing was settled decades ago. Now they pull the rug out from everyone's feet, and everyone needs to do a new cost/benefit analysis. And everyone will pad a percent or two, just to be safe. Which is *exactly* how the great leap forward turned into such a failure... everyone padded a few production points, and as these went up the chain, they started to add up into *major* problems. So here we are, repeating their mistakes, and they're going to end up eating our lunch. There was a reason the anti-trust act was put in place, and there was a reason we drafted policies decades ago to support and expand the middle class. Now those are all being swept away. And it won't be amazon that suffers... it will be us.

The ironies of all this are stunning... ;)

Thanks,

Bill

Randy Denby
06-29-2007, 8:08 PM
Bill...I totally agree. And I feel its not a "conservative/ democrat issue" Its ours. We have got to get a hold of our government and get them back on track "For the people"......not "For the special interests" or ones who contribute to the campaign. This is just my opinion, and I really dont understand all the complexities of government/economics.I hope my ignorance is showing..cuz I sure dont want to be right.

I have got to go woodwork before I pop a vessel :p

John Schreiber
06-30-2007, 1:42 AM
I think this was a wrong ruling. . . .
I think the removal of pricing freedoms is a scary thing.
I agree with Cliff. Now that's scary for me.

Dennis Peacock
06-30-2007, 12:12 PM
Its all adding up to have's/ havenot's.....no mo middle class. Since we are competing with people making.....what, 20 dollars or less a week? And big business in control due to the threat of taking our jobs elsewhere, and doing it, our income is being leveled out to the lowest common denominator.... one way or the other. Government better wake up, cuz their tax base is gonna shrink.....and the money will be worth less and less

BTW, the gulf between the have 's /havenots will continue to ever expand

I've been conservative most of my life...but I think we need checks and balances no matter who is in charge.
Shoot...now I'm Po'ed and its friday night

Very well stated Randy....and I believe you are spot-on on these statements. Problem is......how can all this "stuff" be fixed?

Ken Fitzgerald
06-30-2007, 12:42 PM
This thread is getting political.....but it deserves to be said.....

When the people want changes...it'll change but it also means all people have to be a little less selfish......that includes everyone from big business to overpaid workers and everyone in between.....It's a change that needs to be made in our society at large.....

The word reasonable has seemed to have become lost from the American language...what's a reasonable price for something....what's a reasonable pay for a job....top job and bottom job.......what's a reasonable expectation for a product's liablility.....what's a reasonable expection of professional liability......Reasonable.........You don't hear it used often enough.....

JMHO.......

Greg Crawford
07-01-2007, 10:47 AM
The older I get the less conservative I become.

I’m a little different. The older I get the more Libertarian I become. I would personally enjoy the government getting out of more areas. In a true free market economy, competition and quality will make or break a business, not government intervention (does anyone remember the Chrysler bail-out?). Studebaker made a great car, but didn’t compete, and went out of business. Why weren’t they bailed out? Remember wage and price freezes? I can’t think of anything positive that came from that.

Now, take a look at the Japanese cars. They were hardly available in the 70’s, but they increased their quality and offered better gas mileage the big 3, and secured a huge share of the US auto market. Where would the auto industry be today if the feds had stepped in and stopped the Japanese competition? Another area is computers. As technology gets better, the prices actually fall. If a company isn’t on it’s toes, it will cease to exist. I seem to remember a company named Packard Bell.

As for woodworking tools, I don’t see that there will be much change. Even if Black and Decker (B&D, Porter Cable, DeWalt, Delta) wanted to mandate higher prices, Skil or someone else could then jump in with better pricing and take a large share of that particular market. Quality is also a huge factor in ww tools. How many people would pay the same price for a Shop Vac or Ridgid vacuum as they would for a Festool or Fein? If the price was equal, almost everyone would go with the higher quality unit. There’s also the undeniable law of supply and demand. If there is a high demand for a product, the price can be set higher. When the price is high, more manufacturers see a lucrative market and jump into the fray. As the supply increases, price competition comes in to play to get more products sold than the competition. If prices drop too low, nobody makes any money, and companies leave that market for something more profitable. Even China and the (old) USSR couldn’t get around this area of human nature for very long.

This is a long way of my saying that I don’t think consumers will see too much of a change from this decision. One benefit is that maybe the Walton family will no longer have so much power over their suppliers, and won’t be able to run so many small businesses into the ground. Of course, the consumer is the real culprit even in this area. How many people will continue to support a family-owned variety store if they can save $2 by going Wal-Mart?

Bonnie Campbell
07-01-2007, 10:58 AM
I'm one of the weird people..... I WILL pay more for things at a locally owned store. Service and quality matter. Trouble is finding that service and quality. Even top companies have lowered their quality standards. It's gotten to the point you don't know what is worth the price anymore. Really, price setting by companies will increase sales by local outlets. Buying husqavarna you aren't going to run to Walmart and get it for less, so buy it from a locally owned mom and pop store.... which usually offers better warranty service anyway.

Henry Cavanaugh
07-02-2007, 9:07 AM
Remember Telecommunication deregulation when ATT long distance was .25 per minute. What do we pay now?

Greg Peterson
07-04-2007, 11:22 AM
I've avoided the OT forum for a long time. First trip down here. It is refreshing to see how civil the disagreements are here as SMC. How nice it would be were that true of other places on the web.

The company I work for is one of the last locally/privately owned, independent warehouse distributors in our market. The national corporations have systematically bought out our competition and closed down their operations. They would buy the company I work for in a heart beat, and just as quickly close the doors and liquidate the inventory. They don't want competition. I tell our customers that we don't want all of their business, just some of it. There's enough to go around, and as long as there is competition in the market, we all win.

Now then as to the OP. This ruling is sympathetic to corporate interests.

Free market economy's are a great thing. But they are also have a tendency to evolve, and while technically they remain free, they strive to remove fair from the equation.

I doubt anyone would classify China or Japan as fair economy's, even though they are free economy's.

Unchecked capitalism is like a two year old that doesn't know how to share. There is historic evidence that proves that capitalism left unchecked will adversely impact consumers. All to often greed enters into the board room, and reason exits.

JMHO.

Curt Harms
07-04-2007, 8:09 PM
Remember Telecommunication deregulation when ATT long distance was .25 per minute. What do we pay now?
Made any calls using a hotel phone?:eek::) $1/min or more.

Jim Becker
07-04-2007, 9:58 PM
Made any calls using a hotel phone?:eek::) $1/min or more.

Nobody makes calls from a hotel phone anymore...well, I guess a few do. With such a high percentage of travelers having wireless phones, it's actually forcing many hotels to re-think their strategy. For example, while you can't get "free" Internet access at many top-line hotels like you can at the more value priced properties, those same top-end hotels are now bundling in unlimited phone use including domestic long distance for the same $10 charge they have for high-speed Internet.

I still use my wireless phone...:p...I know who's cooties are on it! :D

Curt Harms
07-05-2007, 12:26 PM
Nobody makes calls from a hotel phone anymore...well, I guess a few do. With such a high percentage of travelers having wireless phones, it's actually forcing many hotels to re-think their strategy. For example, while you can't get "free" Internet access at many top-line hotels like you can at the more value priced properties, those same top-end hotels are now bundling in unlimited phone use including domestic long distance for the same $10 charge they have for high-speed Internet.

I still use my wireless phone...:p...I know who's cooties are on it! :D

I use my cell phone too unless I forget the bloody charger and need to have a good battery for calls the next day. The airport wireless shop had boosters for a lot of phone models but not mine.:(. I didn't know about the internet/phone bundle, something to keep in mind.

Curt

Michael Weber
07-05-2007, 9:31 PM
[quote=

Unchecked capitalism is like a two year old that doesn't know how to share. There is historic evidence that proves that capitalism left unchecked will adversely impact consumers. All to often greed enters into the board room, and reason exits. JMHO.[/quote]

Greg, that was very well put. I loved the "Unchecked capitalism" quote. :D :D :D Was that original to you?

Greg Peterson
07-06-2007, 1:44 PM
Not sure if you are being sarcastic or not. That's one of the faults with online forums.

Many folks bristle at the notion of 'checked' or 'regulated' capitalism. Yet just today we have news from China that yet another government regulator has been sentenced to death for taking bribes. He failed to enforce the rules in the food and drug agency. Another official was sentenced to death a month or two ago within the same agency for the same offense. His failure to oversee the regulations resulted in poisoned pet food being exported to the US. If the Chinese government didn't regulate the manufacture of food, the manufacturers could put anything into their products and the consumers would have to take it as a matter of faith that they are getting what they paid for.


The free market economy is amoral. And in a purely theoretical, academic application, the consumer benefits. Unfortunately, what looks good on paper doesn't always hold up well in the real world. The producers that participate in a free market economy have an incentive to gain market share. Their goals are diametrically opposed to the consumers goals. Just look at the oil or media companies massive consolidation that has taken place in recent years. Synergy was a popular euphemism at one time used to describe the necessity or benefits to consumers. Monopoly was another term used about a century ago. And it seems that we are slowly returning to those times.

As for the OP, I'm not sure how the ruling will affect Amazon. I'm sure that if anyone was qualified to indicate specifically how the ruling would affect Amazon, they would probably be privy to privileged company information. But I doubt Amazon really knows either. But I'll bet you they're addressing the matter.

Again, just my humble opinion. Others see it differently. I'm no more right or wrong than anyone else.

Michael Weber
07-06-2007, 3:44 PM
[quote=Greg Peterson;616504]Not sure if you are being sarcastic or not. That's one of the faults with online forums.

No sarcasm intended. Just admire your ability to express yourself.

Greg Peterson
07-06-2007, 4:06 PM
Thanks. Most folks here at SMC are eloquent, articulate and civil. If I, in the act of expressing my opinions, do not diminish the standards, then I have done well. I'll readily agree that I do not consistently meet the mark. But I do try.

As I stated previously, experience has led me to the conclusion that eloquent, articulate and civil expressions are attributes not commonly found in online forums. Other site(s) I have participated in had a definite bias one way or the other, and dissenting opinions are often ridiculed, belittled and generally treated as disrespectfully as one can without breaking the forums rules. However, in some instances, rules are applied somewhat capriciously as well as selectively. In summary, if you are not part of the vocal minority cabal, you are in a world of hurt and most unwelcome.

That's why I find this particular woodworking forum to be so refreshing and useful. One can expect to be treated with civility, regardless their opinion. Even if you talk about SawStop of DC.