Is HiFi a fixed price cartel?

[KeithT]

As part of my process of looking at new (AV) speakers, I've been doing some web searching on a couple of ranges that I'm considering. There are dozens of retailers that stock them, all at exactly (to the penny) the same price. Interestingly almsot all employ the same PR blurb that features on the manufacturers web pages for those ranges.

So; whilst I understand that the dealers want to/have to make a margin/profit, have the manufacturers set them a fixed price from which they cannot budge? And if they do, do they lose their rights to sell said products?

If you consider the high street in general, you can find identical products at different shops at different prices, though often not massively different. So why should HiFi be different?

 

[Deliriumbassist]

As far as I'm aware, cartelism is done on a horizontal footing- that is, if retailers get together and agree on a fixed price (price fixing) amongst other things. If this is done vertically (the manufacturer setting, say, a minimum retail selling price), then this is fine, because retailers technically can charge above that MRSP.

Of course I may be wrong, this is just my understanding.

 

[Frank Harvey]

Interestingly almsot all employ the same PR blurb that features on the manufacturers web pages for those ranges.

Most dealers will copy and paste from the manufacturer's blurb to their own website to save time. Do you know how long it takes to get a site like ours up and running, and to maintain? You'd have to have a pretty small website or product range to be able to hand write all the descriptions yourself. There's some dealers that don't even bother doing that - they just copy and paste links to the manufacturer's website!

 

[Frank Harvey]

As far as I'm aware, cartelism is done on a horizontal footing- that is, if retailers get together and agree on a fixed price (price fixing) amongst other things.

Believe me, there's no way in hell a bunch of retailers could agree on anything, especially a price between them! Bunch of pirates, the lot of them :rofl:

 

[MUSICRAFT]

Most dealers will copy and paste from the manufacturer's blurb to their own website to save time. Do you know how long it takes to get a site like ours up and running, and to maintain? You'd have to have a pretty small website or product range to be able to hand write all the descriptions yourself. There's some dealers that don't even bother doing that - they just copy and paste links to the manufacturer's website!

Very easy to be :type: when others are spending money.

 

[Frank Harvey]

Thats why we employ someone to just to create the profiles for the products on our website. It is mostly copying and pasting, as well as filling in other details here and there, but it's still a full time job for a product range like ours.

 

[ROTH AV]

Manufacturers can't fix a price - it's illegal.

Retailers can't fix a price between them - it's illegal.

If prices are similar between retailers, I'd assume its because they are all running businesses that need to make a specific minimum margin to keep the doors open.

Maybe the reason the prices are so very close / the same between hifi retailers is that the specialist hifi retail market is so tiny - it's not a commodity category - it's a 'luxury' category which means limited distribution/ very few retailers (which therefore means a high level of expertise and customer service) - you'll proably see exactly the same pricing between Aston Martin dealers if you are looking to purchase a new Rapide.

By the way - when dealing with the larger retailers in the UK, to even mention a 'suggested retail price' when presenting a new product to them for ranging consideration can result in an immediate and severe dressing down. In one retail organisation in particular I'm aware of someone being kicked out mid-presentation for making such a schoolboy error. All we can give is an approximate 'guide' and then it's up to them what they sell a product for.

Finally, I'd like to take this opportunity to confirm that Roth AV will NOT be releasing any 'limited edition' Union Flag products this summer. We don't believe that our customers are so daft.

 

[Lee H]

In a word, no.

 

[Anonymous]

Prices are fixed by manufacturers... Not officially but they are... Some manufacturers allow only 10% discounts, some nothing... It's not official because it's illegal... but if you not obey - account on stop and next year manufacturer or disributor will not extend dealer agreement...

 

[alchemist 1]

As far as I'm aware, cartelism is done on a horizontal footing- that is, if retailers get together and agree on a fixed price (price fixing) amongst other things.

Believe me, there's no way in hell a bunch of retailers could agree on anything, especially a price between them! Bunch of pirates, the lot of them :rofl:

'' Where's the rum?''

 

[jaxwired]

Prices are fixed by manufacturers... Not officially but they are... Some manufacturers allow only 10% discounts, some nothing... It's not official because it's illegal... but if you not obey - account on stop and next year manufacturer or disributor will not extend dealer agreement...

Spot on.

 

[TheHomeCinemaCentre]

If that was close to the truth it would great while it lasted. What you see are market forces in action. Prices are at the most fluid I can ever remember and this is without a doubt the best time to buy. Product performance is at an all time high and the entry point to real performance is lower than ever.

 

[MUSICRAFT]

Thats why we employ someone to just to create the profiles for the products on our website. It is mostly copying and pasting, as well as filling in other details here and there, but it's still a full time job for a product range like ours.

? I think you should to try again.

 

[bigblue235]

? I think you should to try again.

Que?

 

[peterkin1010]

Its an argument almost as old as the industry itself. I used to work in the HiFi trade, I'm free of its shackles so I can speak freely and with some knowledge on the subject. In a word...NO. My ex employer would usually stick to the going rate on most things. This would occasionally go right out the window when the situation demanded it eg Sale, reacting to a competitors advertised price, a big sale from a customer .They NEVER operated a Price-match policy which is gimmicky, is unfair to those not down to a price and encourages greed and avarice in people. Certain manufacturers would not sell to certain fly-by-night wide boy type dealers who essentially were the predecessors of the Internet. A lot of the time HiFi needs to be demonstrated to obtain an idea as to how it sounds. It isn't just like buying baked beans from Tesco. And in order to do that a dealer has to have a half-decent dem room, a range of demonstration stock in,trained sales staff to be able to demonstrate equipment and of course a half decent stockholding. The tendency amongst a significant minority of people is to go the dealer who is prepared to invest in the brand book a demonstration,attend the demonstration, listen to the set up (I had one idiot straight off the street wanting to use a subwoofer in a HiFi 2 Channel set-up at 11:45 listening intently for and complaining about distortion in a £150 sub after I told him twice I had a dem at 12 booked. He obviously expected me to keep a pre-arranged potential £3K+ customer waiting),make a comparison,milk the staff for every bit of knowledge then either demand a price match off an Internet site which makes the transaction worthless or go clickety-click on the Internet because it was cheaper. Manufacturers, distributors and dealers are keen to restrict this sort of abuse for obvious reasons.Why the hell should the salesman blow all his time and effort to work for that Internet site who has done NOTHING to deserve the business apart from provide a lower price? So no there isn't a cartel but the industry has to protect itself and I fully support it.

 

[peterkin1010]

Finally, I'd like to take this opportunity to confirm that Roth AV will NOT be releasing any 'limited edition' Union Flag products this summer. We don't believe that our customers are so daft.

AWWWW! And here was me wanting a pair of Roth Oli 40's in a Union Jack colour scheme..

 

[shafesk]

Well well, almost everything nowadays comes with a conspiracy theory. I don't think hi-fi is a fixed price cartel. In the case of hi-fi dealers who have sell through real shops...they make a lot less profit than you actually think. 2 hifi shops in the same area stocking the same thing and having a similarly fitted shop are obviously likely to have very similar prices. As far as hi-fi companies are concerned, I think its their hardwork, expenditure on research and development and eagerness to keep up with the times that has produced high quality products at competitive prices. I am not a hi-fi dealer, but most of them are much friendlier than your average retail store and we often develop a personal relationship with them...its not about sell sell sell with a good number of them.