Why is it that.....

Actually, it would be. I don't think that this is what is happening.
Manufacturers often offer retailers compensation for advertising their
products. It helps to defer the cost and incent the retailer to
include the products in regular advertising. To qualify for this
compensation, an advertisement must usually conform to the
manufacturer's rules - which often include pricing limitations. That's
why you see so many ads which say "too low to advertise" or "call for
today's price". It's not price fixing because the retailer isn't being
restricted from selling or advertising the product - they are just
being given incentives to do it according to the manufacturer's rules.
They can turn down those incentives at any time they like and pay for
100% of the cost of advertising.

Ed Bennett
[email protected]
http://www.ts-aligner.com

tommyboy wrote:
> Thanks for the explanation.
> Would I be far off in my thinking it sounds like price fixing?

It does vary from industry to industry. For example, it's quite common
in the retail computer and electronics industry to "comp" for
newspaper, magazine, and TV advertising. Surely you've seen the "Intel
Inside" at the end of a computer ad with the little logo and musical
jingle? Well, they did that so they could get "comped" by Intel. Ever
see a CDW ad that "featured" a particular brand of computers or
printers? They do that to get comped.

Manufacturers also comp stores for shelf space. Even individual sales
people get comped for pushing products. It's usually called a "SPIF"
(I think that's the right spelling. it's amazing you never see these
things in print but talk about them all the time).

I've been asked to comp resellers for placing my products in their
catalog, web site, or yearly flier. If you see a product on the cover
of a woodworking catalog you can be sure that the manufacturer paid
dearly for it. It's why you always see the latest and greatest tools
from large manufacturers but rarely (if ever) from the small guys.

Grocery stores get comped for shelf space with a premium going for "end
caps" (an elaborate display of product at the end of an asile).
Retailers have figured out how to get comped for just about everything.
Any industry where there are low margins you'll find retailers looking
for a lot of comps. And manufacturers use them to manipulate how
product is presented, advertised, and sold (including minimum
advertised price).

Ed Bennett
[email protected]
http://www.ts-aligner.com

Locutus wrote:
> <[email protected]> wrote in message
> news:[email protected]...
> > Actually, it would be. I don't think that this is what is happening.
> > Manufacturers often offer retailers compensation for advertising their
> > products.
>
> I can't comment on the woodworking supply industry, but in my industry, this
> happens very rarely.

Tom wrote:

> I realize that my marketing expertise is far below any level of bare
> competent, but I would think the manufacturer would want to sell as
> many units of the product as possible. If selling below the MAP helps
> do that and it only impacts the retailer's margin, why does the
> manufacturer object. Of course that assumes the price to the retailer
> for the product is the same in either case.
>
> In my limited understanding of the process, it doesn't make any sense.

It does make sense but it's not exactly straight forward. The
manufacturer often creates a "pricing structure" that incents resellers
to buy (and sell) more product. In other words, the more you buy the
bigger your discount. So, for the same exact item, big resellers pay
less than little resellers do. This means that big resellers can
afford to offer lower prices to their customers. The lower prices
attract more business, which means buying more product which leads to
greater discounts. This spiral of prosperity for the big reseller is
the spiral of death of the little guys. Whatever business they have
gets stolen away by the ever growing big reseller. So they dump the
product line or don't bother to sign up.

Generally, the total sum of smaller resellers is greater than any one
large reseller. They tend to reach niche markets which the large
resellers don't. And they often provide service and support that saves
the manufacturer a lot of money. So, a manufacturer has some interest
in protecting small resellers. One way to do this is to attach a
minimum advertised price clause to the comps section of the contract.
It doesn't stop the super preditory resellers but it stops most.
Another protective measure is to restrict the big reseller to certain
products. WalMart, Costco, Sam's Club, Home Depot, etc. all have
unique low cost versions of popular brand name products. The little
guys get to sell the higher priced but usually higher quality items.

Some manufacturers just don't care. One of the product lines that I
sell is a good example of this. The manufacturer offers such a huge
discount to the big reseller that their everyday retail price to the
public is *LESS* than my discount price from the manufacturer. So, I
am forced to buy from the big reseller and my price must be
significantly higher to make it worth while. Fortunately, I am selling
to a niche market that the big reseller cannot reach (woodworkers).
Even so, I'm sure that there are some people who know the big
reseller's price. They probably look at my price of the one product
line and think that I'm running a scam - charging outrageous prices for
everything I sell. They think that all resellers - big and small - buy
the product line for the same prices. Ain't so.

Ed Bennett
[email protected]
http://www.ts-aligner.com

Locutus wrote:
> "tommyboy" <[email protected]> wrote in message
> news:[email protected]...
> > So many retailers and online vendors carry Festool products and every
> > one of them sells for the same price.
> > Same with Leigh jigs and accessories.
> > Same with Akeda but in this case there's only one vendor and that
> > vendor sells the jig at a higher price than 'suggested retail'.
> > What has happened to competitive pricing on these products?
>
> It's called MAP. Minimum Advertised Pricing. Since I am involved with a
> retail company, I am quite familiar with it. We are free to sell below MAP,
> but the mfg is free to not sell us any more product.

There are incentives for retailers to do this. This is one.

Another part of the equation is tacit collusion. Everyone sells at the
same price and everyone makes more money. There is an incentive to
cheat in the short-run, but that only creates a price war and everyone
loses that game.

The last piece of the puzzle is that there is no obligation for any
manufacturer to sell anything to anyone. They cannot set the price the
retailer will charge, they can however restrict distribution for a
variety of reasons, including the need to maintain a certain image to
protect their brand name. This is not restraint of trade.

AM Wood

tommyboy wrote:
> On 2 Nov 2006 15:16:17 -0800, [email protected] wrote:
>
> >It does vary from industry to industry. For example, it's quite common
>
> Ed, if you distributed to retailers rather than selling directly to
> the consumer how would MAP be helpful/profitable to you?

See my response above. Essentially, it helps to level the playing
field between the big and small resellers with regard to what the
public sees in advertising. If I sold through resellers and wanted to
protect small dealers from large predatory ones then I would probably
refuse to comp any advertising that featured prices below a certain
point.

I think there's still some confusion about the MAP. The Sherman Act of
1890 specifically prohibits any action taken to restrict fair trade.
For details see:

http://en.wikipedia.org/wiki/Sherman_Antitrust_Act

One aspect of fair trade is the seller's right to set whatever price
they like. So, a manufacturer can't have any influence at all on the
reseller's pricing. You can't refuse to sell product to a reseller
just because you don't like their retail prices. Believe it or not,
there are darn few legal reasons for a manufacturer to refuse the sale
of product to a reseller. If a reseller meets the basic terms of sale,
the manufacturer must honor his purchase orders. Terms of sale include
things like credit worthiness, minimum quantities, payment terms,
delivery schedule, shipping methods, availability, etc.

MAP is not a price fixing technique. It's an advertising incentive.
To bring it full circle to your original question in the thread, all of
the dealers who advertise Festool products probably list the same price
because they don't want to forfeit the advertising comps. Even if
Festool had a flat pricing structure you would still see variations
because some dealers can afford lower margins than others.


Ed Bennett
[email protected]
http://www.ts-aligner.com

Tom wrote:
> Well, it wasn't actually stated in so many words that the manufacturer
> "would" cease to supply the retailer, only that it was "free to not
> sell us any more product". Not necessarily the same thing but that is
> certainly the implication.
>
> I realize that my marketing expertise is far below any level of bare
> competent, but I would think the manufacturer would want to sell as
> many units of the product as possible. If selling below the MAP helps
> do that and it only impacts the retailer's margin, why does the
> manufacturer object. Of course that assumes the price to the retailer
> for the product is the same in either case.
>
> In my limited understanding of the process, it doesn't make any sense.

Because, let's say for example that Woodcraft sells Festool at 10% less
than everyone else. That puts pressure on all the other retailers to
lower their price as well, which means lower margins for them. Means
the other retailers are less happy and might cease ordering Festool
products.

The fixed pricing means that everyone is fat and happy. The consumer is
forced to pay a premium if he really wants it.

Also, part of the whole appeal of high end stuff like Festool is
partially a status symbol.. knowing that you have "the best". If
Festool were priced at the Ryobi level, it wouldn't be as cool or sexy
to have one. Just like if a Mercedes cost as much as a Chevy, some
potential buyers wouldn't think the Mercedes was as good (even if the
quality was identical).

On Nov 2, 4:11 pm, tommyboy <[email protected]> wrote:
> So many retailers and online vendors carry Festool products and every
> one of them sells for the same price.
> Same with Leigh jigs and accessories.
> Same with Akeda but in this case there's only one vendor and that
> vendor sells the jig at a higher price than 'suggested retail'.
> What has happened to competitive pricing on these products?

Caveat: Canada issues.
In my business, I spent a lot of time, over 20 years, and money
developing the market in this area. If my main supplier decided to
allow another fabricator to start competing with me, in my area, I
would have a few choices.
a) I could drop the bottom out my price so that the upstart would have
to do the same, but without the advantages that I have. He'd be short
lived.
b) I could drop that supplier completely and let them have the new guy
allll to themselves whilst (there is that word again) I start focussing
on highlighting another one of my suppliers.
One thing I cannot do, legally, is to start selling below my cost. That
would be considered an unfair business practice.
None of my suppliers will ever dictate my retail prices. But... at some
annual get-togethers, we chat amongst the fabricators and discuss what
the market is bearing.
The Combines Investigation Act dictates clearly what a
manufacture/distributor can do in terms of price-fixing. Henceforth (do
you believe THAT word?) Festool is nowhere to be found in Canada. I,
however, have decided that Festool's prices are commensurate with the
performance their tools deliver. therefore, I have no objection to
paying their prices. Fein has a similar marketing strategy as Festool,
but a dealer would have to be nuts not to ask full-pop for their tools.
They can get it, so why not? Fein does have Canadian representation. Go
figgur. Maybe Festool is afraid of Fein?
Dunno.
Maybe they are in Cahoots? (Cahoots, Alberta... a small town....never
mind......)

r----> who wants to know, that if price fixing is illegal why ALL the
farking gas stations change prices at the same farking time? Huh? Huh?

On Nov 3, 5:27 pm, "bf" <[email protected]> wrote:
[snipped for brevity]
> Also, part of the whole appeal of high end stuff like Festool is
> partially a status symbol.. knowing that you have "the best". If
> Festool were priced at the Ryobi level, it wouldn't be as cool or sexy
> to have one. Just like if a Mercedes cost as much as a Chevy, some
> potential buyers wouldn't think the Mercedes was as good (even if the
> quality was identical).

In many cases with other brands/products you would be correct. In most
of Festool's comparisons, you'd be dead wrong. I can't speak for the
entire Festool product line, but the pieces I own are simply superb.
I'm not saying that because I own them, I own them because they are
superior. Same thing goes for Fein. A quality tools costs money.
Period.

Mercedes has made some really shitty cars in their day. DAHIKT

Nice troll, btw.


r

Locutus wrote:
> This is not true at all. Mfgs/Distributors can refuse to sell to a company
> for many reasons, image, the companies method of doing business, past
> company history, etc. I have personally experienced this in my business,
> since in my industry, there are some products not made for our industry that
> actually work quite well, however the mfg refused to sell to us because they
> did not want their products associated with our industry
> (firearms/military).

If they can work it into the terms of sale then they might have a legal
leg to stand on. It's a civil matter so you always have the right to
sue. I think that this sort of thing happens a lot. If the items are
vital to the success of your company and there is only one source and
that source has refused to sell to you then your only recourse might be
the courts. If I were them, I would be smart enough to give a better
reason. "I don't like your industry" wouldn't fly in court.

Ed Bennett
[email protected]
http://www.ts-aligner.com

tommyboy wrote:
> OK, I'm somewhat more clear as to the MAP thing.
> Now on to the final part.
> How is it that a product as popular as the Akeda jig and accessories
> are sold exclusively by a single retailer? It may be my naivete but
> I'm thinking that if I was a woodworking type retailer I'd really want
> to carry that product. How did Woodcraft get to be the 'chosen one'?
> Might they have financial interest in Akeda beyond that of a retailer?

That's an easy one. A manufacturer can only sell as much product as
they can make. If a reseller decides to purchase 100% of a
manufacturer's production capacity, then the manufacturer can cite
"availability" as the reason for rejecting purchase orders from other
resellers.

Very often this sort of arrangement is by agreement between the
manufacturer and the reseller. Consider the situation where a
manufacturer wants to work through one exclusive distributor. That
distributor is then responsible for supplying all other resellers. The
distributor obtains exclusive rights to the whole world as their
territory in exchange for agreeing to buy everything that the
manufacturer can make. Perfectly legal. The manufacturer can cite "no
available territories" as the reason for rejecting purchase orders from
other resellers.

Woodcraft might have some financial interest in Akeda and therefore be
able to influence the channel strategy. Or, perhaps Akeda has their
hands full just trying to keep up with demand created by Woodcraft.
Who knows exactly what the situation is.

Ed Bennett
[email protected]
http://www.ts-aligner.com

J. Clarke wrote:

>
> Price fixing is an anticompetitive practice--it takes two to do that tango.
> Festool doesn't compete with Festool--they're free to charge whatever they
> want to for their products and to require their dealers to agree to abide by
> those prices.
>
> If, for example, Festool, Bosch, Porter Cable, and Dewalt got together and
> agreed that they'd all sell, say jigsaws, for the same price then _that_
> would be price-fixing because you wouldn't be able to get a competing
> product for a lower price.

No, the first price fixing scheme you pointed out is called vertical
price fixing. The second one is called horizontal price fixing. They
are both anticompetitive.

J. Clarke wrote:
> On Wed, 29 Nov 2006 14:00:47 -0800, gibraltorox wrote:
>
> > J. Clarke wrote:
> >
> >>
> >> Price fixing is an anticompetitive practice--it takes two to do that tango.
> >> Festool doesn't compete with Festool--they're free to charge whatever they
> >> want to for their products and to require their dealers to agree to abide by
> >> those prices.
> >>
> >> If, for example, Festool, Bosch, Porter Cable, and Dewalt got together and
> >> agreed that they'd all sell, say jigsaws, for the same price then _that_
> >> would be price-fixing because you wouldn't be able to get a competing
> >> product for a lower price.
> >
> > No, the first price fixing scheme you pointed out is called vertical
> > price fixing. The second one is called horizontal price fixing. They
> > are both anticompetitive.
>
> And vertical price fixing is lawful in the US. If you don't like it then
> take it up with the Supremes. Whining at us about it will do you no good,
> we have no power to change the law.

I don't think so. Gibraltorox is right. Manufacturers can "suggest" a
retail price to resellers, they can even incent resellers to use that
price (with advertising co-op funds, discount rates, kickbacks, or
other programs), but they cannot dictate the retail price to the
dealers (i.e. make it a term of sale). It would restrict competition
between dealers. I don't recall ever hearing about any Supreme Court
decision like this, can you cite the case?

Ed Bennett
[email protected]
http://www.ts-aligner.com

Well into my 16th year of being a manufacturer.

tommyboy wrote:
> On Thu, 2 Nov 2006 16:14:49 -0500, "Locutus"
> <[email protected]> wrote:
>
> >
> >"tommyboy" <[email protected]> wrote in message
> >news:[email protected]...
> >> So many retailers and online vendors carry Festool products and every
> >> one of them sells for the same price.
> >> Same with Leigh jigs and accessories.
> >> Same with Akeda but in this case there's only one vendor and that
> >> vendor sells the jig at a higher price than 'suggested retail'.
> >> What has happened to competitive pricing on these products?
> >
> >It's called MAP. Minimum Advertised Pricing. Since I am involved with a
> >retail company, I am quite familiar with it. We are free to sell below MAP,
> >but the mfg is free to not sell us any more product.
> >
> Thanks for the explanation.
> Would I be far off in my thinking it sounds like price fixing?

Sell for more than your competition it's gouging
Sell for less than your compeitition it's dumping
Sell for the same as your compeititon, it's price fixing

What's a businessman to do?

The retailer has a contract with the manufacturer. If they don't like
the terms, they don't have to sell the product. They are all the same
price because it's the minimum, and any retailer knows they won't sell
many units if they're priced higher than their competition for exactly
the same product.

[email protected] wrote:
> J. Clarke wrote:
> > On Wed, 29 Nov 2006 14:00:47 -0800, gibraltorox wrote:
> >
> > > J. Clarke wrote:
> > >
> > >>
> > >> Price fixing is an anticompetitive practice--it takes two to do that tango.
> > >> Festool doesn't compete with Festool--they're free to charge whatever they
> > >> want to for their products and to require their dealers to agree to abide by
> > >> those prices.
> > >>
> > >> If, for example, Festool, Bosch, Porter Cable, and Dewalt got together and
> > >> agreed that they'd all sell, say jigsaws, for the same price then _that_
> > >> would be price-fixing because you wouldn't be able to get a competing
> > >> product for a lower price.
> > >
> > > No, the first price fixing scheme you pointed out is called vertical
> > > price fixing. The second one is called horizontal price fixing. They
> > > are both anticompetitive.
> >
> > And vertical price fixing is lawful in the US. If you don't like it then
> > take it up with the Supremes. Whining at us about it will do you no good,
> > we have no power to change the law.
>
> I don't think so. Gibraltorox is right. Manufacturers can "suggest" a
> retail price to resellers, they can even incent resellers to use that
> price (with advertising co-op funds, discount rates, kickbacks, or
> other programs), but they cannot dictate the retail price to the
> dealers (i.e. make it a term of sale).

They absolutely can and do. Many golf manufacturers work exactly the
same way. If you don't like the practice, don't buy the product.

[email protected] wrote:
> J. Clarke wrote:
> > On Wed, 29 Nov 2006 14:00:47 -0800, gibraltorox wrote:
> >
> > > J. Clarke wrote:
> > >
> > >>
> > >> Price fixing is an anticompetitive practice--it takes two to do that tango.
> > >> Festool doesn't compete with Festool--they're free to charge whatever they
> > >> want to for their products and to require their dealers to agree to abide by
> > >> those prices.
> > >>
> > >> If, for example, Festool, Bosch, Porter Cable, and Dewalt got together and
> > >> agreed that they'd all sell, say jigsaws, for the same price then _that_
> > >> would be price-fixing because you wouldn't be able to get a competing
> > >> product for a lower price.
> > >
> > > No, the first price fixing scheme you pointed out is called vertical
> > > price fixing. The second one is called horizontal price fixing. They
> > > are both anticompetitive.
> >
> > And vertical price fixing is lawful in the US. If you don't like it then
> > take it up with the Supremes. Whining at us about it will do you no good,
> > we have no power to change the law.
>
> I don't think so. Gibraltorox is right. Manufacturers can "suggest" a
> retail price to resellers, they can even incent resellers to use that
> price (with advertising co-op funds, discount rates, kickbacks, or
> other programs), but they cannot dictate the retail price to the
> dealers (i.e. make it a term of sale).

They absolutely can and do. Many golf manufacturers work exactly the
same way. If you don't like the practice, don't buy the product.

J. Clarke wrote:

> Look up "State Oil vs. Khan". Ruled that it was legal for oil companies
> to set maximum prices for their products. That was in late 1997.

Setting a maximum price is not the same as setting a fixed price (or a
minimum price). I can see how the court would rule that this does not
restrict competition!

Ed Bennett
[email protected]
http://www.ts-aligner.com

Larry Bud wrote:
> They absolutely can and do. Many golf manufacturers work exactly the
> same way. If you don't like the practice, don't buy the product.

I'm guessing that you misunderstand the terms of sale. It is illegal
to tell a retailer that they must agree to a specific resale price.
That is not a valid reason to refuse a purchase order.

Ed Bennett
[email protected]
http://www.ts-aligner.com

Lew Hodgett wrote:
> As a seller, you can refuse to sell to a specific industry, but if you
> offer to sell to one member of that industry, then you must offer to
> sell to all members of that industry with the same terms and
> conditions applying.

I know that you must offer the same terms and conditions to everyone
you sell to, but I wasn't aware that you could exclude specific
industries. A previous poster complained that they couldn't get
specific items because the manufacturer didn't want to sell into their
industry (military). It seems like it would be pretty difficult to
manage such a thing given the overlap in so many industries. What if I
sold my product to an industrial supplier that sold product to a
particular industry? Would that qualify or could I just tell all
buyers in that industry that they must get it from this supplier?

Ed Bennett
[email protected]
http://www.ts-aligner.com

CW wrote:
> That's price fixing and is quite illegal. If you worked that right, you
> could have gotten that car for free.

The only way that it wouldn't be price fixing is if the dealerships
were all owned by the same company.

Ed Bennett
[email protected]
http://www.ts-aligner.com

Robatoy wrote:
> On Nov 3, 5:27 pm, "bf" <[email protected]> wrote:
> [snipped for brevity]
> > Also, part of the whole appeal of high end stuff like Festool is
> > partially a status symbol.. knowing that you have "the best". If
> > Festool were priced at the Ryobi level, it wouldn't be as cool or sexy
> > to have one. Just like if a Mercedes cost as much as a Chevy, some
> > potential buyers wouldn't think the Mercedes was as good (even if the
> > quality was identical).
>
> In many cases with other brands/products you would be correct. In most
> of Festool's comparisons, you'd be dead wrong. I can't speak for the
> entire Festool product line, but the pieces I own are simply superb.
> I'm not saying that because I own them, I own them because they are
> superior. Same thing goes for Fein. A quality tools costs money.
> Period.
>
> Mercedes has made some really shitty cars in their day. DAHIKT
>
> Nice troll, btw.

Dude, it wasn't a troll. I'm not saying Fine or Festool isn't worth the
price. I don't own one, but I'm sure it's good quality. I'm just saying
that part of maintaining brand image is the price. It's not a slam on
the tools. Geez. Note I said "PART OF THE APPEAL" is the brand. I know
someone who brought a Delta unisaw. He hardly ever uses it, but loves
taking people down to his basement to show it off. To him, it's like an
antique car he likes to show off. He gets enjoyment and pride out of
it, and can afford it, so it's no big deal.

"tommyboy" <[email protected]> wrote in message
news:[email protected]...
> So many retailers and online vendors carry Festool products and every
> one of them sells for the same price.
> Same with Leigh jigs and accessories.
> Same with Akeda but in this case there's only one vendor and that
> vendor sells the jig at a higher price than 'suggested retail'.
> What has happened to competitive pricing on these products?

It's called MAP. Minimum Advertised Pricing. Since I am involved with a
retail company, I am quite familiar with it. We are free to sell below MAP,
but the mfg is free to not sell us any more product.

"tommyboy" <[email protected]> wrote in message
news:[email protected]...
> On Thu, 2 Nov 2006 16:14:49 -0500, "Locutus"
> <[email protected]> wrote:
>
>>
>>"tommyboy" <[email protected]> wrote in message
>>news:[email protected]...
>>> So many retailers and online vendors carry Festool products and every
>>> one of them sells for the same price.
>>> Same with Leigh jigs and accessories.
>>> Same with Akeda but in this case there's only one vendor and that
>>> vendor sells the jig at a higher price than 'suggested retail'.
>>> What has happened to competitive pricing on these products?
>>
>>It's called MAP. Minimum Advertised Pricing. Since I am involved with a
>>retail company, I am quite familiar with it. We are free to sell below
>>MAP,
>>but the mfg is free to not sell us any more product.
>>
> Thanks for the explanation.
> Would I be far off in my thinking it sounds like price fixing?


shhhhhhhhhhhhhhhhhh!!!! ;)

<[email protected]> wrote in message
news:[email protected]...
> Actually, it would be. I don't think that this is what is happening.
> Manufacturers often offer retailers compensation for advertising their
> products.

I can't comment on the woodworking supply industry, but in my industry, this
happens very rarely.

<[email protected]> wrote in message
news:[email protected]...
>
> See my response above. Essentially, it helps to level the playing
> field between the big and small resellers with regard to what the
> public sees in advertising. If I sold through resellers and wanted to
> protect small dealers from large predatory ones then I would probably
> refuse to comp any advertising that featured prices below a certain
> point.
>
> I think there's still some confusion about the MAP. The Sherman Act of
> 1890 specifically prohibits any action taken to restrict fair trade.
> For details see:
>
> http://en.wikipedia.org/wiki/Sherman_Antitrust_Act
>

This does not prevent a company from setting price policies. This prevents
companies from conluding to fix prices.

> Believe it or not,
> there are darn few legal reasons for a manufacturer to refuse the sale
> of product to a reseller. If a reseller meets the basic terms of sale,
> the manufacturer must honor his purchase orders. Terms of sale include
> things like credit worthiness, minimum quantities, payment terms,
> delivery schedule, shipping methods, availability, etc.
>

This is not true at all. Mfgs/Distributors can refuse to sell to a company
for many reasons, image, the companies method of doing business, past
company history, etc. I have personally experienced this in my business,
since in my industry, there are some products not made for our industry that
actually work quite well, however the mfg refused to sell to us because they
did not want their products associated with our industry
(firearms/military).

tommyboy wrote:

> I'm not certain these guys have similar marketing strategies since I
> see the price of the Fein Turbo III ranging from $338. to $399.
> whereas the price of the Festool Rotex 125 FEQ is $350. at any Festool
> dealer.

Sounds like the "Access Toyota" pricing.

All the Toyota dealers in a geographical area get together and set
no-haggle prices on the cars.

They then refuse to budge on the price, because they know that all the
dealers within a 500 mile radius all have the same prices.

That said, I wanted my Matrix enough to pay the price.

Chris

<[email protected]> wrote in message
news:[email protected]...
<snip>
> Ed Bennett
> [email protected]
> http://www.ts-aligner.com
>

Nice explanation Ed.

Akeda's website states that they are under new ownership. Dealer list
is under development.

Renata

On Fri, 03 Nov 2006 19:59:23 GMT, B A R R Y <[email protected]>
wrote:

>Nova wrote:
>
>>
>> Akeda's web site lists their jigs as being available at:
>>
>> Austin Hardwoods
>> Highland Hardware
>> Rockler
>> Woodsmith
>> The Woodworking Shows
>
>Try to buy one. <G> This past summer,I tried all but the shows and
>Austin Hardwoods. Woodcraft at least listed it as out of stock. My
>luck finding an Akeda actually drove me to the point of posting a
>question here on the 'wreck inquiring if the product was still
>available. A friendly Woodcraft employee answered my post, but by that
>time I had already purchased a Leigh from Highland.
>
>I was really interested in the Akeda, but my the search set off my
>"future orphan tool" alert, tipping me into the D4R.

"B A R R Y" <[email protected]> wrote in message
news:[email protected]...
> Nova wrote:
>
>>
>> Akeda's web site lists their jigs as being available at:
>>
>> Austin Hardwoods
>> Highland Hardware Rockler
>> Woodsmith
>> The Woodworking Shows
>
> Try to buy one. <G> This past summer,I tried all but the shows and
> Austin Hardwoods. Woodcraft at least listed it as out of stock. My luck
> finding an Akeda actually drove me to the point of posting a question here
> on the 'wreck inquiring if the product was still available. A friendly
> Woodcraft employee answered my post, but by that time I had already
> purchased a Leigh from Highland.
>
> I was really interested in the Akeda, but my the search set off my "future
> orphan tool" alert, tipping me into the D4R.

FWIW, I really like my Akeda. I do remember not so long ago, they had a fire
or explosion or something to that effect and production was shut down for
quite some time. Could be that's why you didn't find one.

<Tom Veatch> wrote in message
news:[email protected]...
> On Thu, 02 Nov 2006 22:18:44 GMT, tommyboy <[email protected]> wrote:
>
>>On 2 Nov 2006 14:09:28 -0800, [email protected] wrote:
>>
>>Or they can sell below the MAP.....
>>in which case the manufacturer ceases supplying the retailer.
>>Now we get into restraint of trade.
>>Sounds like a helluva tangled web.
>
> Well, it wasn't actually stated in so many words that the manufacturer
> "would" cease to supply the retailer, only that it was "free to not
> sell us any more product". Not necessarily the same thing but that is
> certainly the implication.
>
> I realize that my marketing expertise is far below any level of bare
> competent, but I would think the manufacturer would want to sell as
> many units of the product as possible. If selling below the MAP helps
> do that and it only impacts the retailer's margin, why does the
> manufacturer object. Of course that assumes the price to the retailer
> for the product is the same in either case.
>
> In my limited understanding of the process, it doesn't make any sense.

It some retailers start selling a certain product at little margin, it can
and does discourage other retailers who can't operate at those margins from
carrying the product. If they can't be competitive on price, there is no
reason for them to stock the product, therefor overall sales to the
wholesaler go down.

"Edwin Pawlowski" wrote in message

> Good explanation. Sometimes, more business is not a good thing. Look how
> increased volume bankrupted Vlasic Pickles.

Often success can be a bad thing.

Many a small record company has folded after a regional hit because they had
to borrow the money to satisfy the demand for the product, and being small,
the record distributors have them last on the list to get paid from store
sales, after the big boys get theirs ... generally months after the loan is
due and the interest has piled up.

Exact same thing for a small oil company/operator. Everyone wants to drill
and complete an oil/gas well but the minute you do is when the expensive
problems start ... from legal and environmental, to marketing.

IOW, sometimes all you get out of a "successful" business venture is
bragging rights. DAMHIKT.

--
www.e-woodshop.net
Last update: 10/29/06

tommyboy wrote:

> Would I be far off in my thinking it sounds like price fixing?

You can SELL it for whatever you want. You just can't advertise the
lower price. The electronics industry often puts "CALL" for a price
listing.

Some Garmin GPS dealers have websites that won't display the sale price
until you put it in the cart, others have email autoresponders.

Wanna' see manufacturers who are tough on discounters? Look into Apple
Computer or Bose. I don't think woodworking vendors have the volume to
go through the gyrations electronics vendors have to make the games
worthwhile, so they simply comply.

Tim Taylor wrote:

>
> FWIW, I really like my Akeda. I do remember not so long ago, they had a fire
> or explosion or something to that effect and production was shut down for
> quite some time. Could be that's why you didn't find one.
>
>

The fire was in the early part of 2004. See an August 2004 Canadian
Woodworker article referring to the fire. It's about half way down the
page under "New Products". :

http://www.canadianwoodworking.com/Newsletters/2004/August.html

--
Jack Novak
Buffalo, NY - USA
[email protected]

Quite true but it appears that was not the case here. Sounds more likely
that the guy got screwed on the price of a car and is trying to justify it.

<[email protected]> wrote in message
news:[email protected]...
>
> CW wrote:
> > That's price fixing and is quite illegal. If you worked that right, you
> > could have gotten that car for free.
>
> The only way that it wouldn't be price fixing is if the dealerships
> were all owned by the same company.
>
> Ed Bennett
> [email protected]
> http://www.ts-aligner.com
>

<[email protected]> wrote in message
>
> It does make sense but it's not exactly straight forward. The
> manufacturer often creates a "pricing structure" that incents resellers
> to buy (and sell) more product. In other words, the more you buy the
> bigger your discount. So, for the same exact item, big resellers pay
> less than little resellers do. This means that big resellers can
> afford to offer lower prices to their customers. The lower prices
> attract more business, which means buying more product which leads to
> greater discounts. This spiral of prosperity for the big reseller is
> the spiral of death of the little guys. Whatever business they have
> gets stolen away by the ever growing big reseller. So they dump the
> product line or don't bother to sign up.

Good explanation. Sometimes, more business is not a good thing. Look how
increased volume bankrupted Vlasic Pickles.
http://www.fastcompany.com/online/77/walmart.html

"B A R R Y" <[email protected]> wrote in message
news:[email protected]...
> Tim Taylor wrote:
>>
>> FWIW, I really like my Akeda.
>
> I've not heard of anyone who doesn't, which is what drove my interest. It
> always fares well in reviews, too.
>
>>I do remember not so long ago, they had a fire or explosion or something
>>to that effect and production was shut down for quite some time.
>
> You'd think they'd at least put that on their web site.

Good point! I never thought about that. One of the guys at my local
Woodcraft told me about it.

Tim Taylor wrote:
>
> FWIW, I really like my Akeda.

I've not heard of anyone who doesn't, which is what drove my interest.
It always fares well in reviews, too.

>I do remember not so long ago, they had a fire
> or explosion or something to that effect and production was shut down for
> quite some time.

You'd think they'd at least put that on their web site.

tommyboy wrote:

> OK, I'm somewhat more clear as to the MAP thing.
> Now on to the final part.
> How is it that a product as popular as the Akeda jig and accessories
> are sold exclusively by a single retailer? It may be my naivete but
> I'm thinking that if I was a woodworking type retailer I'd really want
> to carry that product. How did Woodcraft get to be the 'chosen one'?
> Might they have financial interest in Akeda beyond that of a retailer?

Akeda's web site lists their jigs as being available at:

Austin Hardwoods
Highland Hardware
Rockler
Woodsmith
The Woodworking Shows

It doesn't even mention Woodcraft.

http://www.akeda.com/where_usa.html

--
Jack Novak
Buffalo, NY - USA
[email protected]

tommyboy <[email protected]> wrote in news:pvumk2db6eegunlsc5c4brh9kf3s6jg2h5@
4ax.com:

> On Thu, 02 Nov 2006 21:11:05 GMT, tommyboy <[email protected]> wrote:
>
>>So many retailers and online vendors carry Festool products and every
>>one of them sells for the same price.
>>Same with Leigh jigs and accessories.
>>Same with Akeda but in this case there's only one vendor and that
>>vendor sells the jig at a higher price than 'suggested retail'.
>>What has happened to competitive pricing on these products?
>
> OK, I'm somewhat more clear as to the MAP thing.
> Now on to the final part.
> How is it that a product as popular as the Akeda jig and accessories
> are sold exclusively by a single retailer? It may be my naivete but
> I'm thinking that if I was a woodworking type retailer I'd really want
> to carry that product. How did Woodcraft get to be the 'chosen one'?
> Might they have financial interest in Akeda beyond that of a retailer?
>

For a while, the Akeda was sold at woodworking shows as well, and at a
pretty good price, relative to Woodcraft. In the consolidation of
Delta/Porter-Cable, that group of traveling gypsies got shut down.

Akeda is a pretty small company that is doing well to have gotten their
product to market, and to continue to sell the tool, in spite of the
challenges they have faced. I have one of their jigs, and think it a
pretty good piece of work.

But they are just trying to get/keep going in a competitive space. I
wouldn't look for conspiracies.

Patriarch

"Tim Taylor" <[email protected]> wrote in
news:[email protected]:

>
> "B A R R Y" <[email protected]> wrote in message
> news:[email protected]...
>> Nova wrote:
>>
>>>
>>> Akeda's web site lists their jigs as being available at:
>>>
>>> Austin Hardwoods
>>> Highland Hardware Rockler
>>> Woodsmith
>>> The Woodworking Shows
>>
>> Try to buy one. <G> This past summer,I tried all but the shows and
>> Austin Hardwoods. Woodcraft at least listed it as out of stock. My
>> luck finding an Akeda actually drove me to the point of posting a
>> question here on the 'wreck inquiring if the product was still
>> available. A friendly Woodcraft employee answered my post, but by
>> that time I had already purchased a Leigh from Highland.
>>
>> I was really interested in the Akeda, but my the search set off my
>> "future orphan tool" alert, tipping me into the D4R.
>
> FWIW, I really like my Akeda. I do remember not so long ago, they had
> a fire or explosion or something to that effect and production was
> shut down for quite some time. Could be that's why you didn't find
> one.
>
>

The fire was in a neighboring company in their building, and caused THEM
problems in the fighting of the fire, and restoration of the services to
the building. But that's been 2 -3 years ago. They've been back in
business since then. They sent me a part I needed, no charge, 18 months
ago, and were 'back to normal' then, supposedly.

I saw them at the woodshow at least a year ago...

Patriarch

On Fri, 03 Nov 2006 18:28:06 GMT, Nova <[email protected]> wrote:

>tommyboy wrote:
>
>> OK, I'm somewhat more clear as to the MAP thing.
>> Now on to the final part.
>> How is it that a product as popular as the Akeda jig and accessories
>> are sold exclusively by a single retailer? It may be my naivete but
>> I'm thinking that if I was a woodworking type retailer I'd really want
>> to carry that product. How did Woodcraft get to be the 'chosen one'?
>> Might they have financial interest in Akeda beyond that of a retailer?
>
>Akeda's web site lists their jigs as being available at:
>
>Austin Hardwoods
>Highland Hardware
>Rockler
>Woodsmith
>The Woodworking Shows
>
>It doesn't even mention Woodcraft.
>
>http://www.akeda.com/where_usa.html

Kinda makes you scratch your head when the website offers inaccurate
info as to where their product can be purchased.

<[email protected]> wrote in message
news:[email protected]...
>
> CW wrote:
> > That's price fixing and is quite illegal. If you worked that right, you
> > could have gotten that car for free.
>
> The only way that it wouldn't be price fixing is if the dealerships
> were all owned by the same company.
>
> Ed Bennett
> [email protected]
> http://www.ts-aligner.com
>

On Thu, 02 Nov 2006 22:18:44 GMT, tommyboy <[email protected]> wrote:

>On 2 Nov 2006 14:09:28 -0800, [email protected] wrote:
>
>Or they can sell below the MAP.....
>in which case the manufacturer ceases supplying the retailer.
>Now we get into restraint of trade.
>Sounds like a helluva tangled web.

Well, it wasn't actually stated in so many words that the manufacturer
"would" cease to supply the retailer, only that it was "free to not
sell us any more product". Not necessarily the same thing but that is
certainly the implication.

I realize that my marketing expertise is far below any level of bare
competent, but I would think the manufacturer would want to sell as
many units of the product as possible. If selling below the MAP helps
do that and it only impacts the retailer's margin, why does the
manufacturer object. Of course that assumes the price to the retailer
for the product is the same in either case.

In my limited understanding of the process, it doesn't make any sense.

On 2 Nov 2006 14:09:28 -0800, [email protected] wrote:

>Actually, it would be. I don't think that this is what is happening.
>Manufacturers often offer retailers compensation for advertising their
>products. It helps to defer the cost and incent the retailer to
>include the products in regular advertising. To qualify for this
>compensation, an advertisement must usually conform to the
>manufacturer's rules - which often include pricing limitations. That's
>why you see so many ads which say "too low to advertise" or "call for
>today's price". It's not price fixing because the retailer isn't being
>restricted from selling or advertising the product - they are just
>being given incentives to do it according to the manufacturer's rules.
>They can turn down those incentives at any time they like and pay for
>100% of the cost of advertising.
>
Or they can sell below the MAP.....
in which case the manufacturer ceases supplying the retailer.
Now we get into restraint of trade.
Sounds like a helluva tangled web.

"tommyboy" <[email protected]> wrote in message
news:[email protected]...
> On Thu, 2 Nov 2006 16:14:49 -0500, "Locutus"
> <[email protected]> wrote:
>
>>
>>"tommyboy" <[email protected]> wrote in message
>>news:[email protected]...
>>> So many retailers and online vendors carry Festool products and every
>>> one of them sells for the same price.
>>> Same with Leigh jigs and accessories.
>>> Same with Akeda but in this case there's only one vendor and that
>>> vendor sells the jig at a higher price than 'suggested retail'.
>>> What has happened to competitive pricing on these products?
>>
>>It's called MAP. Minimum Advertised Pricing. Since I am involved with a
>>retail company, I am quite familiar with it. We are free to sell below
>>MAP,
>>but the mfg is free to not sell us any more product.
>>
> Thanks for the explanation.
> Would I be far off in my thinking it sounds like price fixing?

Price fixing is an anticompetitive practice--it takes two to do that tango.
Festool doesn't compete with Festool--they're free to charge whatever they
want to for their products and to require their dealers to agree to abide by
those prices.

If, for example, Festool, Bosch, Porter Cable, and Dewalt got together and
agreed that they'd all sell, say jigsaws, for the same price then _that_
would be price-fixing because you wouldn't be able to get a competing
product for a lower price.

On Wed, 29 Nov 2006 14:00:47 -0800, gibraltorox wrote:

> J. Clarke wrote:
>
>>
>> Price fixing is an anticompetitive practice--it takes two to do that tango.
>> Festool doesn't compete with Festool--they're free to charge whatever they
>> want to for their products and to require their dealers to agree to abide by
>> those prices.
>>
>> If, for example, Festool, Bosch, Porter Cable, and Dewalt got together and
>> agreed that they'd all sell, say jigsaws, for the same price then _that_
>> would be price-fixing because you wouldn't be able to get a competing
>> product for a lower price.
>
> No, the first price fixing scheme you pointed out is called vertical
> price fixing. The second one is called horizontal price fixing. They
> are both anticompetitive.

And vertical price fixing is lawful in the US. If you don't like it then
take it up with the Supremes. Whining at us about it will do you no good,
we have no power to change the law.

--

--John

to email, dial "usenet" and validate

(was jclarke at eye bee em dot net)

On Wed, 29 Nov 2006 21:47:05 -0500, John wrote:

> On 29 Nov 2006 23:00:06 GMT, "J. Clarke" <[email protected]> wrote:
>
>>On Wed, 29 Nov 2006 14:00:47 -0800, gibraltorox wrote:
>>
>>And vertical price fixing is lawful in the US. If you don't like it
>>then take it up with the Supremes. Whining at us about it will do you
>>no good, we have no power to change the law.
>
> Some years ago, manufacturers imposed a policy called "fair trade
> pricing" (an ironic term if ever there was one) in which they dictated
> the price at which their products could be sold at retail. I'm pretty
> sure this practice was ruled illegal; I haven't seen in used in probably
> 10 years or so. Isn't this the same thing you're calling vertical price
> fixing?

Look up "State Oil vs. Khan". Ruled that it was legal for oil companies
to set maximum prices for their products. That was in late 1997.



--
--John
to email, dial "usenet" and validate
(was jclarke at eye bee em dot net)

On Thu, 2 Nov 2006 16:14:49 -0500, "Locutus"
<[email protected]> wrote:

>
>"tommyboy" <[email protected]> wrote in message
>news:[email protected]...
>> So many retailers and online vendors carry Festool products and every
>> one of them sells for the same price.
>> Same with Leigh jigs and accessories.
>> Same with Akeda but in this case there's only one vendor and that
>> vendor sells the jig at a higher price than 'suggested retail'.
>> What has happened to competitive pricing on these products?
>
>It's called MAP. Minimum Advertised Pricing. Since I am involved with a
>retail company, I am quite familiar with it. We are free to sell below MAP,
>but the mfg is free to not sell us any more product.
>
Thanks for the explanation.
Would I be far off in my thinking it sounds like price fixing?

On 2 Nov 2006 15:16:17 -0800, [email protected] wrote:

>It does vary from industry to industry. For example, it's quite common

Ed, if you distributed to retailers rather than selling directly to
the consumer how would MAP be helpful/profitable to you?

On 3 Nov 2006 14:42:36 -0800, "Robatoy" <[email protected]> wrote:

>Fein has a similar marketing strategy as Festool
>but a dealer would have to be nuts not to ask full-pop for their tools.
>They can get it, so why not? Fein does have Canadian representation. Go
>figgur. Maybe Festool is afraid of Fein?
> Dunno.

I'm not certain these guys have similar marketing strategies since I
see the price of the Fein Turbo III ranging from $338. to $399.
whereas the price of the Festool Rotex 125 FEQ is $350. at any Festool
dealer.

tommyboy wrote:
> So many retailers and online vendors carry Festool products and every
> one of them sells for the same price.
> Same with Leigh jigs and accessories.
> Same with Akeda but in this case there's only one vendor and that
> vendor sells the jig at a higher price than 'suggested retail'.
> What has happened to competitive pricing on these products?

Can't comment on anything but Festool.

Local representative, notice I didn't say dealer, here in SoCal has a
display but no inventory for sale..

Orders are placed with dealer who places them on Festool.

Equipment is shipped from Festool warehouse in Las Vegas.

Not sure when the money and the hardware change hands, but it borders
on an agent/manufacturer relationship which is quite legal.

Lew

That's price fixing and is quite illegal. If you worked that right, you
could have gotten that car for free.

"Chris Friesen" <[email protected]> wrote in message
news:[email protected]...
>
> Sounds like the "Access Toyota" pricing.
>
> All the Toyota dealers in a geographical area get together and set
> no-haggle prices on the cars.
>
> They then refuse to budge on the price, because they know that all the
> dealers within a 500 mile radius all have the same prices.
>
> That said, I wanted my Matrix enough to pay the price.
>
> Chris

On 3 Nov 2006 14:27:12 -0800, "bf" <[email protected]> wrote:

>
>Also, part of the whole appeal of high end stuff like Festool is
>partially a status symbol.. knowing that you have "the best".

I own NO Festools.

I used a Festool jigsaw a few weeks back, which was a replacement for
a 20 year old Bosch. I'd buy it in a minute if I needed to replace my
Bosch.

It's more than status...

On 29 Nov 2006 23:00:06 GMT, "J. Clarke" <[email protected]> wrote:

>On Wed, 29 Nov 2006 14:00:47 -0800, gibraltorox wrote:
>
>And vertical price fixing is lawful in the US. If you don't like it then
>take it up with the Supremes. Whining at us about it will do you no good,
>we have no power to change the law.

Some years ago, manufacturers imposed a policy called "fair trade pricing" (an
ironic term if ever there was one) in which they dictated the price at which
their products could be sold at retail. I'm pretty sure this practice was ruled
illegal; I haven't seen in used in probably 10 years or so. Isn't this the same
thing you're calling vertical price fixing?


To reply by e-mail, use jcarlson631 at yahoo dot com

John

On Thu, 02 Nov 2006 21:11:05 GMT, tommyboy <[email protected]> wrote:

>So many retailers and online vendors carry Festool products and every
>one of them sells for the same price.
>Same with Leigh jigs and accessories.
>Same with Akeda but in this case there's only one vendor and that
>vendor sells the jig at a higher price than 'suggested retail'.
>What has happened to competitive pricing on these products?

OK, I'm somewhat more clear as to the MAP thing.
Now on to the final part.
How is it that a product as popular as the Akeda jig and accessories
are sold exclusively by a single retailer? It may be my naivete but
I'm thinking that if I was a woodworking type retailer I'd really want
to carry that product. How did Woodcraft get to be the 'chosen one'?
Might they have financial interest in Akeda beyond that of a retailer?

On Thu, 02 Nov 2006 17:26:14 -0600, Tom Veatch wrote:

>On Thu, 02 Nov 2006 22:18:44 GMT, tommyboy <[email protected]> wrote:
>
>>On 2 Nov 2006 14:09:28 -0800, [email protected] wrote:
>>
>>Or they can sell below the MAP.....
>>in which case the manufacturer ceases supplying the retailer.
>>Now we get into restraint of trade.
>>Sounds like a helluva tangled web.
>
>Well, it wasn't actually stated in so many words that the manufacturer
>"would" cease to supply the retailer, only that it was "free to not
>sell us any more product". Not necessarily the same thing but that is
>certainly the implication.
>
>I realize that my marketing expertise is far below any level of bare
>competent, but I would think the manufacturer would want to sell as
>many units of the product as possible. If selling below the MAP helps
>do that and it only impacts the retailer's margin, why does the
>manufacturer object. Of course that assumes the price to the retailer
>for the product is the same in either case.
>
>In my limited understanding of the process, it doesn't make any sense.

I'll take a shot at this. MAP means all retailers pay the same
wholesale price for the item and sell at the same retail price. This
setup seems to offer some protection to the 'mom and pop' operations.
The Borg down the street or the non brick and mortar internet giant is
brought down to a level playing field. Implication here is that if
wholesale varies according to volume, the retailer now can demend
lower pricing or discontinue selling the product, putting the
manufacturer at the retailer's mercy. Sound logical?

Nova wrote:

>
> Akeda's web site lists their jigs as being available at:
>
> Austin Hardwoods
> Highland Hardware
> Rockler
> Woodsmith
> The Woodworking Shows

Try to buy one. <G> This past summer,I tried all but the shows and
Austin Hardwoods. Woodcraft at least listed it as out of stock. My
luck finding an Akeda actually drove me to the point of posting a
question here on the 'wreck inquiring if the product was still
available. A friendly Woodcraft employee answered my post, but by that
time I had already purchased a Leigh from Highland.

I was really interested in the Akeda, but my the search set off my
"future orphan tool" alert, tipping me into the D4R.

[email protected] wrote:

> I'm guessing that you misunderstand the terms of sale. It is illegal
> to tell a retailer that they must agree to a specific resale price.
> That is not a valid reason to refuse a purchase order.

Absolutely.

Back in the 58-61 time frame, executives from several of the
electrical industry manufacturers had some unpaid vacation time at the
graybar hotel courtesy of the US government after being convicted of
price fixing.

As a seller, you can refuse to sell to a specific industry, but if you
offer to sell to one member of that industry, then you must offer to
sell to all members of that industry with the same terms and
conditions applying.


Lew

"Nova" <[email protected]> wrote in message
news:HbO2h.51$sw6.3@trndny08...
> Tim Taylor wrote:
>
>>
>> FWIW, I really like my Akeda. I do remember not so long ago, they had a
>> fire or explosion or something to that effect and production was shut
>> down for quite some time. Could be that's why you didn't find one.
>
> The fire was in the early part of 2004. See an August 2004 Canadian
> Woodworker article referring to the fire. It's about half way down the
> page under "New Products". :
>
> http://www.canadianwoodworking.com/Newsletters/2004/August.html
>
> --
> Jack Novak
> Buffalo, NY - USA
> [email protected]

Man, has it been that long? It don't seem like 2 years ago, almost 3, but I
guess it was.