Price Fixing

[Moonglow]

Just came across this article:

 

Yamaha, Roland, Fender, Thomann and Music Store fined total of 21m for price-fixing

[nursers]

Hopefully this drives some longer term better behaviour.....

[Al Coda]

good find,- very interesting !

 

I always wondered why all the big online sellers in germany offered identical prices,- "Just Music" (formerly Sound & Drumland") in Berlin included.

Already long time ago insiders claimed these dealers shared the same purchasing department, group-purchased extremely large quanities and got ridiculous low prices that way,- killing smaller dealers all over the country.

 

A.C.

[ElmerJFudd]

They refuse to change their habits. Fender, Yamaha, Roland, Korg, Casio were fined in the UK in 2018 and in 2020 as well. Paying the fine appears to not be enough to deter the practice.

[wd8dky]

Almost everything has the same price at all vendors in the US too. Some offer little extras to differentiate themselves and give the impression of a "better" deal (cables, or a flash drive with extra patches). Some offer financing options which can be helpful depending upon your financial situation, but the price of a new XYZ keyboard is the same.

[ElmerJFudd]

Consumer protections in the US are⦠how does one say, rarely enforced, frequently skirted. But on occasion they go after a big fish. Like Apple and books publishers.

https://www.reuters.com/article/us-apple-ebooks-idUSBRE9690GE20130710

[AnotherScott]

In the U.S, manufacturers used to be able to set the prices that a retailer could sell their items for. That became prohibited in 1976, but manufacturers are still permitted to set a minimum advertised price (MAP). So while Yamaha, Roland, etc. can't tell a dealer what they must sell something for, they CAN tell them the lowest price they can advertise.

 

ETA: Something also prohibited in the U.S. is dealers conspiring among themselves to establish a fixed selling price.

[Moonglow]

They refuse to change their habits. Fender, Yamaha, Roland, Korg, Casio were fined in the UK in 2018 and in 2020 as well. Paying the fine appears to not be enough to deter the practice.

Wow, I did not know this happened twice before. I would think "hitting 'em in the pocketbook" would facilitate change. Suggests maintaining this practice is more profitable than paying the fines.

[Docbop]

I would think "hitting 'em in the pocketbook" would facilitate change. Suggests maintaining this practice is more profitable than paying the fines.

 

The darkside of capitalism the mega corporations view fines, settlement from accidents, and so on just a cost of doing business. When I worked at a local music store somehow they somehow became authorized Fender and Gibson dealer. In doing that Fender and Gibson controlled the discounts we could offer. Then to keep authorization these huge annual orders that include the products no one wanted to buy. Then the local big chain stores bitched about us all the time and Fender and Gibson both made life difficult for us till we finally gave up being an authorized dealer. Really sad was other local stores who were NOT authorized Fender and Gibson dealer would beat our prices.

 

Competition is good for the consumer so they fix prices and make sure the big chain stores get the stock they need and the little local stores get screwed. Look at how the days of trade-ins are over. Before you'd trade in your old gear as a way to get a better price so the store stayed within the authorized selling prices. Now trade-ins are something only the local stores do anymore, but they probably can't get the big name products you want. Whole system is rigged now.

[AnotherScott]

Now trade-ins are something only the local stores do anymore, but they probably can't get the big name products you want. Whole system is rigged now.

Guitar Center does trade-ins.

[ElmerJFudd]

International business is no walk in the park. And can"t even imagine all the pockets that need to be greased.

[Docbop]

Now trade-ins are something only the local stores do anymore, but they probably can't get the big name products you want. Whole system is rigged now.

Guitar Center does trade-ins.

 

 

Guitar Centers out here haven't done trade-ins in years. Some GC's will call them trade-ins, but they are doing their buy used gear thing which usually is a very good deal. A lot of the GC employees will tell you you can get more selling your gear yourself. Per GC managers and employees, GC searches the internet eBay, Craigslist, etc for the average used price they can find, then GC offers you 50% of that. GC must need used gear bad since a lot of new gear is hard to get, yesterday the GC by me had a cash for used gear day, usually they write you a check.

[jazzpiano88]

International business is no walk in the park. And can"t even imagine all the pockets that need to be greased.

 

Exactly. Three quarters of the world works on bribes and payoffs, and I've often wondered how US businesses work their way around this with the Foreign Corrupt Practices Act (FCPA, United States law that prohibits U.S. firms and individuals from paying bribes to foreign officials to further business deals). There must be some best practices that allow the bribes to be paid without getting prosecuted.

[o0Ampy0o]

....Really sad was other local stores who were NOT authorized Fender and Gibson dealer would beat our prices.......Look at how the days of trade-ins are over. Before you'd trade in your old gear as a way to get a better price so the store stayed within the authorized selling prices. Now trade-ins are something only the local stores do anymore....

Typically you cannot offer the name brand warranty on your sales unless you are a factory authorized dealer.........the customer might be able to purchase a product at a lesser price but it would not be backed by the name brand warranty.........Apple offers trade in deals.

[Docbop]

....Really sad was other local stores who were NOT authorized Fender and Gibson dealer would beat our prices.......Look at how the days of trade-ins are over. Before you'd trade in your old gear as a way to get a better price so the store stayed within the authorized selling prices. Now trade-ins are something only the local stores do anymore....

Typically you cannot offer the name brand warranty on your sales unless you are a factory authorized dealer.........the customer might be able to purchase a product at a lesser price but it would not be backed by the name brand warranty.........Apple offers trade in deals.

 

 

There were ways "gray market" stores would work around the warranty issue, like filling out the warranty card for the customer with name of the authorized store they got it from. Customer never sees the name of the official store, but has a warranty if needed. A friend of mine had a small store in Hollywood and like others couldn't get the prices breaks the big stores do. He got together a handful of local music store and they would pool there orders to make them big enough to get pricing to give them a fighting chance against the chains. As the old saying goes where there's a will there's a way.

 

Apple trade-ing are joke unless your trading a iPhone, any other band phone it's better to just keep the phone and use it as an extra camera or to run app's with wifi connection. I used to upgrade my gear more often when I could trade it in and use it as a bargaining tool to get a good price. The authorized dealers where prices were controlled could give me a great trade-in to make up for not being able to go lower on the price of the instrument.

[El Lobo]

I would think "hitting 'em in the pocketbook" would facilitate change. Suggests maintaining this practice is more profitable than paying the fines.

 

The darkside of capitalism the mega corporations view fines, settlement from accidents, and so on just a cost of doing business.

Quoted for truth. This is a fact of business. It's the reason why fines, lawsuit settlements, and other punishments need to be so costly that they can put the business out of business. That's the only thing that will make businesses not treat these financial punishments as the cost of doing business. As long as something only increases the cost of keeping your cash cow alive, you'll keep on doing it even if it's immoral, illegal, or fattening. But if the punishment for something will result in killing your cash cow, you'll be sure not to do that.

[Chris Link]

Now trade-ins are something only the local stores do anymore, but they probably can't get the big name products you want. Whole system is rigged now.

Guitar Center does trade-ins.

 

 

Guitar Centers out here haven't done trade-ins in years. Some GC's will call them trade-ins, but they are doing their buy used gear thing which usually is a very good deal. A lot of the GC employees will tell you you can get more selling your gear yourself. Per GC managers and employees, GC searches the internet eBay, Craigslist, etc for the average used price they can find, then GC offers you 50% of that. GC must need used gear bad since a lot of new gear is hard to get, yesterday the GC by me had a cash for used gear day, usually they write you a check.

 

This seems not unreasonable at all. You can"t expect them to pay full value and make little or nothing. They save you the hassle of selling it yourself, dealing with scammers and lowball offers, etc.

 

You"re always free to sell it yourself if you don"t like their offer.

[Docbop]

Now trade-ins are something only the local stores do anymore, but they probably can't get the big name products you want. Whole system is rigged now.

Guitar Center does trade-ins.

 

 

Guitar Centers out here haven't done trade-ins in years. Some GC's will call them trade-ins, but they are doing their buy used gear thing which usually is a very good deal. A lot of the GC employees will tell you you can get more selling your gear yourself. Per GC managers and employees, GC searches the internet eBay, Craigslist, etc for the average used price they can find, then GC offers you 50% of that. GC must need used gear bad since a lot of new gear is hard to get, yesterday the GC by me had a cash for used gear day, usually they write you a check.

 

This seems not unreasonable at all. You can"t expect them to pay full value and make little or nothing. They save you the hassle of selling it yourself, dealing with scammers and lowball offers, etc.

 

You"re always free to sell it yourself if you don"t like their offer.

 

Interesting you don't want to deal with lowball offers but think a major chain lowballs people is okay. I only sold my used gear to GC once and that was because I was moving and didn't have the time to deal with selling myself. Since then I haven't sold anything to GC and many times just give old gear to a young musician or an organization helps mentor young Jazz musicians.

[EscapeRocks]

 

Interesting you don't want to deal with lowball offers but think a major chain lowballs people is okay. I only sold my used gear to GC once and that was because I was moving and didn't have the time to deal with selling myself. Since then I haven't sold anything to GC and many times just give old gear to a young musician or an organization helps mentor young Jazz musicians.

 

Is a retail chain not supposed to be able to make any money on a trade-in when they have to resell it?

 

Sure, if I sold a used widget to a private party I may get XXXX dollars.

If I sold/traded that same widget to a store that will resell it, I am going to get XXXX minus the margin they need to be able to sell it at current used value.

 

Determining and agreeing on that margin is up to the person trading n and the establishment taking the trade. My local GC, with which I have a very long time relationship, is very good and fair. I go in with a certain figure in my head, and they almost always give that to me.

Plus, I only pay tax on the difference between what I've traded and what I'm buying.

 

To answer your question about lowballing: Yes, it's okay. You don't have to accept it. I look at it like this. We get an inquiry from a festival show to contract my band. They ask what our rate is. I do a little research on the festival, and give them what I call our "usual fee" for that kind of show (length, production provided, distance, etc..)

The figure I give them is what we'd like to get, within reason, with me knowing I will negotiate down to a specific point. No sense in leaving good money on the table. It always works n our favor.

 

I do the same thing when trading or selling gear. I know what' I'd like, I know what is too low, and I know what is reasonable. We usually always meet somewhere in that range. There have been two times GC couldn't do what I felt was the low end of reasonable.

My guy tried, but couldn't get there. No hard feelings. It's business, not personal.

[ElmerJFudd]

Usually when selling gear, you"ll be able to negotiate a better price if you are buying gear as well. The dealer has more flexibility when he"s taking on less risk. If he knows he"s making X on the new piece he can afford to give you a bit more on sale of your old piece.

[Delaware Dave]

I'm surprised about Thomann based on the prices I see on their site and comparing those prices to US distributors. In the US, all major distributors are about the same price so there is where I can see price fixing; but Thomann is consistently much less so I'm scratching my head a little bit with them being mentioned.

[o0Ampy0o]

...They save you the hassle of selling it yourself, dealing with scammers and lowball offers, etc.

 

You"re always free to sell it yourself if you don"t like their offer.

 

Interesting you don't want to deal with lowball offers but think a major chain lowballs people is okay. I only sold my used gear to GC once and that was because I was moving and didn't have the time to deal with selling myself. Since then I haven't sold anything to GC and many times just give old gear to a young musician or an organization helps mentor young Jazz musicians.

I think you misunderstood his point. He is not saying one is OK while one is not when they are both the same thing. He is saying that if you are going to deal with it at all don't bother waiting and also exposing yourself to other nonsense like scammers, the extra time, etc. involved in selling it yourself. In a way it is like those turn over your guns / no questions asked programs. They will take it off your hands In this case at least they pay something for your "gun." You could have to pay them like taking stuff to a dump. Or worse it could end up on the side of some secluded road like an old mattress or chair. It isn't for everyone. YOU decide which is the best option (hopefully it is not the side of some road). Your choice is not going to be everyone's choice.

[Chris Link]

 

Interesting you don't want to deal with lowball offers but think a major chain lowballs people is okay. I only sold my used gear to GC once and that was because I was moving and didn't have the time to deal with selling myself. Since then I haven't sold anything to GC and many times just give old gear to a young musician or an organization helps mentor young Jazz musicians.

 

I think you inadvertently made my point. You needed to sell in a hurry because you were moving and didn"t want the hassle to sell it yourself. It was worth it to you to sell quickly and frictionlessly.

 

Donating gear to your local school, church, arts organization etc. can work out pretty well. I was in the middle of moving and donated my S90 to the music program that my kids were in for high school. What I got for a charitable donation was worth a good portion of what I could have sold it for, but hassle-free.

 

The amusing part of this was the director telling me the kids complaining about how heavy it was (especially with a heavy road case)! Sheesh. These are 15-18 year old high school kids!