[1250ships]

For those who subscribe there is a front page article in today's Wall Street Journal about minimum advertised prices. Illegal in the US for almost a century after a Supreme Court decision in 2007 it again became legal to set prices. According the to WSJ it is really impacting prices on baby goods, pet supplies, and consumer electronics. And I think we can add diecast to that list.

The story notes that online sellers are especially vulnerable. A quote:

Online retailers say some policies target them specifically. Mr. Okin of WorldHomeCenter.com says L.D. Kichler's policy applies only to advertised prices -- meaning discounting is OK as long as it isn't publicized. But online shops, by definition, publicize their prices online.

"We are being punished by [last year's Supreme Court ruling] exactly because we're more efficient than our competitors," Mr. Okin says.

The only positive note is that officials from 35 states have written to Congress asking them to pass new laws making this illegal. But no one seems very interested in action right now.

[parsig9]

Seems like newsletter discounts for "members" solves that problem but it does punish the online folks.

All the oline companies should be contacting Amazon and the like to discontinue stocking brands that attempt to fix prices.

They'll get better results that way than if they lobby Congress.

I'd love to see orders from online sellers to the MAP companies decrease by 50%. That would fix their wagon faster than a new law.


Let the market work fellas.

HM telling the shop that is buying its product how much it costs wholesale is one thing. Trying to control what they do with it and at what price is
As applies to diecast: If the online stores we depend on have a bunch of overpriced stock sitting around guess what will happen next quarter.


My last CW plane, Shamrocks, arrives this month unless prices drop.

[KG_Jag]

Originally Posted by parsig9

Seems like newsletter discounts for "members" solves that problem but it does punish the online folks.

It is clear that, under at least the Hobby Master MAP requirements imposed on internet dealers, regular customers who receive promotional emails are not "members" edible for an outside the MAP range discount "advertised" in those emails. Pete had to change his way of doing business because of this.

Cutting to the chase, dealers can sell at below the MAP price or range, on condition that no one knows about said price. At least not until they make a phone call or go through a series of extra steps on-line to uncover the real price.

A few things are clear at this point. First, the MAPs and their mandated prices/small approved price ranges are getting a great deal of push-back from posters on these boards. In light of the fact that those who post here are among the most serious and dedicated collectors of military die cast, it can be expected that those less dedicated to the hobby will be even less pleased.

Second, with the Franklin Mint already offering fire sales after implementing their MAP and Corgi dumping product at Tuesday Morning--even before implementing their MAP, sales volume will drop significantly--especially for models that are merely new liveries on older molds and most especially in this difficult economy.

[1250ships]

Originally Posted by KG_Jag

It is clear that, under at least the Hobby Master MAP requirements imposed on internet dealers, regular customers who receive promotional emails are not "members" edible for an outside the MAP range discount "advertised" in those emails. Pete had to change his way of doing business because of this.

Cutting to the chase, dealers can sell at below the MAP price or range, on condition that no one knows about said price. At least not until they make a phone call or go through a series of extra steps on-line to uncover the real price.

First I think in Hobby Master's case the policy is put in place by the US distributor, not Hobby Master. If I'm wrong I'm sure someone will set the record straight!

I can understand having a policy designed to cut off people who set up businesses to just get the models cheap and don't expect to make a profit. But Pete certainly was not in that category. And people expect to get a discount at online sellers because they are going to be paying shipping plus they loose the ability to examine the models before purchasing. Discounts on pre-orders make sense as they take some of the risk away from the dealers. Dealers get lower profits on the pre-orders but they ensure they are not stuck with inventory.

Dealers are in a tough spot because they do not want to risk the loss of a major supplier. And lets face it right now if you were a diecast dealer the loss of Hobby Master would be a big blow with so many other companies out of comission.

Originally Posted by KG_Jag

A few things are clear at this point. First, the MAPs and their mandated prices/small approved price ranges are getting a great deal of push-back from posters on these boards. In light of the fact that those who post here are among the most serious and dedicated collectors of military die cast, it can be expected that those less dedicated to the hobby will be even less pleased.

I don't think this is entirely true. I suspect the average or casual collector will have no idea about the MAP policies. These collectors are not wired into things and reading discuss boards about these things. They might notice a price increase and decide the product has become too expensive but their decision making is not going to be based on a backlash against MAPs.

Your paragraph could be read as meaning what I just wrote but I wanted to clarify it and make that distinction explicit.

Originally Posted by KG_Jag

Second, with the Franklin Mint already offering fire sales after implementing their MAP and Corgi dumping product at Tuesday Morning--even before implementing their MAP, sales volume will drop significantly--especially for models that are merely new liveries on older molds and most especially in this difficult economy.

When I toured Chino last Friday with Daran from the UK board we talked about Corgi's problems. It was interesting to get the UK perspective and he pointed out at a few things I hadn't thought about. But getting back to your point Corgi is suffering from the same thing in the UK. Collectors don't buy at retail because they know if they wait the products with be de-certed and binned and they can buy they at huge discounts. It remains to be seen if this will behavior will change but if the models are not selling the manufacturers have no choice but to liquidate stock.

Personally I learned to wait for things to go on sale. I was interested in several of the Corgi Warbirds but I figured they were the new Legands series and if I waited they'd show up at Tuesday Morning. Turned out to be a smart move on my part. Hornby might change that but if the models don't sell they will have to move them somewhere at a discount, whether at a place like Tuesday Morning or through an approved sale to dealers like Franklin Mint did.

My opinion is that MAP policies are a mistake. Sell the product to the dealers and then let them set whatever prices they want. If you as a manufacturer or distributor find a seller who is moving items for just pennies over wholesale just cut them off. Or if you don't like a specific policy a dealer has in place ask them to remove it. But this blanket policy only serves to support dealers who can't compete.

[chiefs70]

Originally Posted by 1250ships

First I think in Hobby Master's case the policy is put in place by the US distributor, not Hobby Master. If I'm wrong I'm sure someone will set the record straight!

I am quite certain you are correct. Awhile ago a member on this board was offering out of sight deals on HM aircraft. He was contacted by the distributor and told that several dealers who frequented an online forum had lodged complaints with them that they couldn't compete with the price he was offering - never mind that very few people ever actually purchased from him. As such, they told him he would either have to agree to not sell below a certain level or lose his access to HM models. He chose the latter as it wasn't worth the trouble. It appears the distributor experienced a positive response from that policy and now everyone - including the ones who protested his pricing - get to share in the pain.

Personally, I don't have an issue with the dealers who complained trying to protect their business - this is America - but I wonder if it ended up being a case of "careful what you wish for" in the end.

[KG_Jag]

Little is generally shared with the customers about the details of a MAP. Did it originate with the manufacturer and was implemented by its distributors (if the manufacturer is using a middle man)? Regardless of who came up with a particular MAP--especially in major markets--would it last long without at least the tacit support of the manufacturer? In any case it is clear that that MAP was imposed by some person or entity above the individual retail level who has the power to force it upon all the retailers on at least the national level. So the customer will likely care little about exactly who implemented the MAP.

Of course the result of a MAP--higher prices to the customer is what is important to both the customer, especially the less fanatical one. A MAP is merely a device. The consequence of the MAP is what is important.

We agree that MAPs, especially those not created to stop true product dumping and which do not allow retailers a great deal of pricing flexibility--especially with older and/or slower moving products {read: almost all MAPs} are bad for all in the medium to long run. Artificially propping up prices and decreasing the competitive options and flexibility or your retailers is almost always a bad thing and is an especially bad thing for a non-necessity during an economic downturn.

[1250ships]

I care who implemented the MAP because if it is a distributor then complaints to the factory might result in some changes. Either a revised MAP or a new distributor could result.

It is also important to keep in mind that overseas manufacturers often have little concept of the marketplace in other countries. What works in one country will fail horribly in another. Just look at the experience of Walmart in Germany for an example.

[KG_Jag]

Originally Posted by 1250ships

I care who implemented the MAP because if it is a distributor then complaints to the factory might result in some changes. Either a revised MAP or a new distributor could result.

I do too--but we are a very small number of those who buy the product.

Originally Posted by 1250ships

It is also important to keep in mind that overseas manufacturers often have little concept of the marketplace in other countries. What works in one country will fail horribly in another. Just look at the experience of Walmart in Germany for an example.

I have little doubt that an international company makes every effort to achieve a very good understanding of its major markets. Of course that doesn't guarantee that they won't trot out the next Edsel.