Archived posting to the Leica Users Group, 2000/01/03

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Subject: Re: [Leica]Leica price fixing? Not exactly
From: "A.H.SCHMIDT" <horsts@primus.com.au>
Date: Mon, 03 Jan 2000 20:31:48 +1100

Dan S wrote:

> This is true as far as it goes.  However, several niche manufacturers have
> worked around this rule using a creative purchasing contract with retailers.
>
> Here is how it works..
>
> A manufacturer produces a product on which they want absolute price
> stability.  (Bose speakers for example)
>
> They approach the retailer with a proposition.  We will sell you product
> XXXX.  You, Mr Retailer, may sell this product for any price you choose.
> However, if you choose to sell it for below the price contracted, we will
> CHOOSE not to sell more of these items to your chain.
>
> This backdoor "price fixing" has been the standard M.O. for BOSE, Maytag and
> recently Kitchenaid brand on certain models of dishwashers.
>
> Interestingly this practise is only employed by manufacturers who feel that
> there is NO DIRECT COMPETITION from other brands for their product. (A bit
> arrogant I think)
>
> Of course many retailers love the idea, since it takes price out of the
> equation for the customer, and typically on the highest priced goods.
>
> I am have no idea if this is how Leica is controlling the prices charged for
> their products. Considering the fact that it is unlikely that they even
> offer much Ad subsidy to their retailers,and that the price of Leica goods
> does seem pretty non negotiable, I would not rule out the possibility.

Here in Australia, if I go to ten different shops and ask for a price on Leica
equipment, be it cameras or lenses, I get 10 different prices. So I have to
assume, here is no price fixing or  manipulation at all.

Regards, Horst Schmidt