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Based on that link that @Whitecat posted, it's pretty clear that there is price fixing going on.
The problem is that the manufacturer/distributor won't be so blatant as to tell you that they are taking away your dealership because you have advertised under the MAP. The official reason will be that your premises aren't up to scratch, or that they are rationalising their dealerships. To prove in a court that they had taken away your dealership because you advertised at a price they didn't like would be nigh on impossible, so the dealers toe the line (or put a call for best price on the website).
I'm not saying that this has gone on, or does but... *hypothetically* speaking...
If dealer 'A' buys x amount of product they get 'y' discount on trade prices. As part of that discount the "agreement" is that dealer 'A' pockets the difference in profit to recognise the significant investment in stocking.
Dealer 'B' buys (x-%age) amount of product they pay full trade price. This reflects the stocking levels and investment made by the dealer.
Customer goes into Dealer A and tries product... likes it and wants "best price" from the dealer. The dealer is down on takings so offers a discount that is significant if he buys today... customer goes away to think about it.
Customer phones dealer B and asks for a price match on product - dealer B gets disgruntled because the price quoted by dealer A is way below what dealer B can 'officially' offer the product but is equally short that month so matches and throws in a cheap Snark tuner as a sweetener.
Customer phones dealer A to see what they can do... dealer A throws toys out of pram. Whilst they match it, they then turn around to the sales person from the supplier and threaten to pull their (significant) business if something isn't done. The supplier cannot afford to lose that dealer. A sweetener deal is sorted with dealer A from the supplier to appease them.
Sales person phones Dealer B to berate them about ruining proper competition and threatens not to supply in future at the same rate unless they ensure they don't discount too much. Due to sales volumes, if they lose dealer B, it doesn't affect the bottom line sales too badly. Dealer B, is forced to tow an invisible line...
And all the while, dealer A is pushing to get ever bigger discounts in return for taking on more stock due to the booming internet sales. To the point that they can then sell stock legitimately online for less than dealer B can buy the product for at trade... and then "everybody" moans that dealer B's prices are outrageous and that when they eventually have to throw the towel in, the general consensus is that its their own fault for being greedy about pricing...
Like I say, it can be subtle... and I'm not suggesting for one moment that this goes on or any particular store/dealer/supplier etc is worse than any other for this. And whilst I'm sure some people can fill in the blanks in the above analogy to suit their own experiences/agenda, it is meant in a hypothetical way...
All I'll say is, there's a good reason why this industry has every right to be concerned about this.
I don't think it's just that. Prices have risen by a lot more than inflation over the last 2 or 3 years. To me that speaks of some kind of collusion.
Before anyone trots out Brexit, the pound is only 2 cents lower against the dollar than it was on the day of the referendum.
It is illegal for manufactuers to force dealer to maintain prices.
I actually don't have a problem with manufacturers maintaining prices.
Of course dealers colluding to fix prices is another matter, cf the toy industry.
The problem for dealers is that margins are pretty tight as it is, and so aggressive discounting will (and does) cause casualties.
I've certainly noticed that customers have been more aggressive in recent times about insisting on a discount, and otfen parade the cheapest online price they can find on their iPhones.
It would be interesting to to find out why this investigation has been initiated, and whether whoever did it had the comsumers inerests at heart.
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I think part of the problem is what @impmann said about the bigger shops getting a better rate from the manufacturer/distributor. There should be one price for all dealers.
It wasn't bigger shops getting better discounts in that case, it was actually smaller bricks and mortar shops - Yamaha was trying to help them compete by giving them bigger margins. Altruistic, but still illegal.
The issue of bricks and mortar shops competing goes much wider than the music industry. Most high streets these days seem to be full of estate agents, bookies, and charity shops because all the proper shops have shut down.
The business rate system is a massive problem. There should create designated retail zones (basically high streets) and give shops in those locations a 50% discount on business rates. I would define shop to exclude bookies and estate agents. That would help shops compete against internet retailers with big out of town warehouses. Either that, or reform the business rates system entirely - for example, replace it with a 2% tax on internet sales. That would help UK manufacturing as well as high street shops, as the manufacturers would no longer have to pay business rates.
Most small shops would struggle to buy in bulk financially, and wouldn't have the storage either.
Thats an interesting story about Yamaha - I didn't know that one.
I'm not saying it happens but I've heard stories about 'inner circle pricing' for some stores due to volumes. There are all manner of clever accounting methods that can be used to disguise this, apparently...
Retail actually attracts much higher rates than offices (!), so charging the same rates would actually be improvement.
I still think a LVT would be answer.
I expect estate agents will be in the firing line soon (shame....).
Nil Satis Nisi Optimum
If they want to offer discounts to PMT, Andertons, and Guitar Guitar, then the manufacturers will have to accept that the big boys like that will be the only ones left in 10 years time.
At the moment they are using an illegal MAP as a means of keeping margins up and dealers in business. Even with that the smaller dealers could get frozen out. If they pay less for the instrument, there is nothing to stop one of the big boys doing a "call for price" and undercut the small shopsbecause they can buy cheaper. People will buy from the big stores, and the small ones will disappear anyway.
The only way to keep a decent dealer network long term is to have one price that all registered dealers pay.
Were the big boys will win is a) when an end of line deal is offered and the supplier wishes to clear out say 1000 Strats of last years model, they will generally go to the big boys first and move all 1000 through less accounts b) like wise when new models are offered, especially at the likes of NAMM, then again the big boys are in first - ditto for special FSR and limited run models
Note I use Strat and/or Fender as a guide line - the principle is the same for Ibanez, Yamaha, Boss, Gibson - etc etc
In short a level playing field on most brands now, with a dealership program you can sign into if funds allow and of course often a protected area, so in smaller towns/regions you'll have an exclusive territory - this principle applies to most major brands now - But I assure you many times in the past this was not the case - More so when we had privately owned independent suppliers - Now most brands are distributed by their own company - PRS, Fender, Gibson, Roland etc