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Old 12-10-2005, 06:49 AM #1
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Is Map Illegal Or Is It Not?

In a previous thread, we asw that MAP could be bad for both the consumer and well run pb businesses and that MAp could also be bad for fields and for paintball in general. Now the question is if MAP is illegal or not.

http://www.ftc.gov/os/2000/09/musicstatement.htm

Lets look at the SMP case:

Is the Ion and SMP in a dominating position in the PB industry? I would say yes, if you dont carry the Ion as a retailer, you will get problems. Therefore MAP would be illegal. Also, according to the above link, also in a non-dominating position, MAP could be illegal. I dont see how this can continue, now almost every large manufacturer/distributor in the PB industry has MAP pricing. Soon every idiot can run a pb shop and the well run shops will have to close down eventually.

"The Commission will, of course, consider per se unlawful(2) any arrangement between a manufacturer and its dealers that includes an explicit or implied agreement on minimum price or price levels,(3) and it will henceforth consider unlawful arrangements that have the same practical effect of such an agreement without a detailed market analysis, even if adopted by a manufacturer that lacks substantial market power."
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Old 12-10-2005, 08:56 AM #2
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You need to look at the difference between establishing minimum price vs. minimum advertised price.
Yes, it would be illegal for companies to conspire to fix the price an item could sell for. But, the MAP policies only control the price stores can advertise an item for. Stores are still free to sell it for whatever price they want.
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Old 12-10-2005, 09:28 AM #3
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Well, it seems in the Music case quoted avove, they were of a different oppinion:

"Through these stricter MAP programs, the distributors hoped to stop retail price competition, take pressure off their own margins, and eventually increase their own prices. The distributors' actions were effective. Retail prices were stabilized by these MAP programs. Thereafter, each distributor raised its wholesale prices."

"The market structure in which the distributors' MAP provisions have operated also gives us reason to believe that these programs violate Section 5 of the FTC Act as practices which materially facilitate interdependent conduct. The MAP programs were implemented with an anticompetitive intent and they had significant anticompetitive effects. In addition, there was no plausible business justification for these programs."

Without doubt, the intent of MAP pricing in paintball industry is to reduce competition. This is also why MAP is so immoral and against our capitalist system that ths USA was once built from.

Last edited by iKNOW : 12-10-2005 at 09:30 AM.
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Old 12-10-2005, 10:15 AM #4
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From what I understand, MAP is basically a contract between SP and the retailer; The retailer agrees to the MAP, and SP agrees to continue doing business with them. If the retailer goes below MAP, SP can refuse to do business with them anymore, but they can't take legal action
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Old 12-10-2005, 10:31 AM #5
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In some cases, I actually like the MAP policy. A few years ago, a Tippmann Model was $119 wholesale. Some retailers were selling it for $120. $1 Profit!!!

I couldn't compete with that and not lose money on the sale. By the time you add in the credit card companies surcharge, the shipping materials, etc. I was losing several dollars on the sale of a Model 98.

Thanks to MAP, all retailers have to sell it at a certain price that still allows a little profit. There are many items I would like to sell below MAP, but the policy actually keeps retailers from constantly undercutting each other until there's no profit to be made.
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Old 12-10-2005, 12:15 PM #6
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the bottom line is no one can tell you at what price you have to sell or advertize your product at . the only thing they can leagally do is not sell to you if they try to boycott you through a distributor they are in violation of the law. so unless manufacturers stop selling to distributors and sell direct to the retailer that is the only way they can control it. m.a.p. is a joke. the paintball industrie is a joke. you have distributors competing with retailers and then flying off the handle when they can control what is going on
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Old 12-10-2005, 12:34 PM #7
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Reading that link, I think the issue was that the MAP applied to in-store advertising as well. At that point the distributors were fixing the price. The commission also takes issue with the five distributors colluding to structure pricing at an industry level. That'd be like PMI, National, Tippmann, Kingmann and JT all getting together and agreeing to a minimum price on similar markers.

MAP is nothing new. The consumer electronics, appliance, auto, and photography industries have been doing it for decades. Take a look at the Sunday fliers this weekend and you're bound to find one or two items marked "Too low to list". It becomes illegal when the distributor tells the retailer that he can't sell it below the product below a certain price. At that point, it becomes price fixing.
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Old 12-10-2005, 03:51 PM #8
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M.A.P. specifically refers to "Advertised" price. Once a customer shows intent to buy then a store can sell whatever they want at any price they want. Intent to buy from a store is just walking in their front door. Which means a store can put any price on the wall they want to. They just can't "Advertise" the price. For internet stores this "intent" is shown when a customer adds an item to their shopping cart. That's the online equivalent of walking in to the store. The web site before that is considered advertising. A fine line but that's the law. It's standard now on many web sites to require you adding an item to your cart before seeing the final price. This is perfectly legal and there is nothing a mfg can do about it other than carefully choose who to sell to in the first place.
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Old 12-10-2005, 08:04 PM #9
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I was wondering that today too. Cuz some companies will pull you off thier dealership list if you even put a "Call for Price" on your website.

Just wondering becuz somebody seems to be selling G7's for awfully cheap. And I thought that if you sold under the MAP you would get your dealership taken away
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Old 12-11-2005, 07:10 PM #10
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I think that the company you're talking about is doing a closeout sale as they decided to quit the pb bussiness. I'd do the same thing if partners I worked with screwed me over the way it happened to these guys...
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Old 12-12-2005, 02:02 AM #11
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Collusion and price fixing are very different from MAP.

I'm sure most agree that MAP benefits dealers. If paintball was a purely competitive industry, dealers would not turn any economic profits over time. MAP pricing circumvents such open market realities via an adoption of a pseudo-price ceiling. All the sudden, we have dealers turning profits! If MAP didn't exist, the industry would crumble. A price war would break out until dealers were selling their goods at pennies above cost. Such a market offers no stability.

I don't understand why iKNOW argues that MAP pricing hurts well-run, established paintball stores. If it wasn't for MAP, anyone could go on eBay and purchase new markers for pennies above cost. To compete, stores must lower their prices as well. Both online and brick and mortar lose. Who do you think will survive the price war? Online stores don't have a fraction of the overhead. Bye bye local paintball store.

You do have a valid point that MAP hurts consumers. Price ceilings distort free market economics and result in a lesser quantity of goods sold and increased prices to the consumer. However, MAP pricing builds established businesses and stores. Moreover, it allows newcomers to compete. Not a bad thing in my eyes. After all, what would paintball be like without the local fields and stores?

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Old 12-12-2005, 06:29 PM #12
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Quote:
Cuz some companies will pull you off thier dealership list if you even put a "Call for Price" on your website.
They can't stop selling to an established dealer just because they don't like how they're getting around MAP pricing. As long as the dealer is in good standing in every other way they can't pull a dealer ship for only this reason. (Legally) Now they could go ahead and pull an account and then you'd have to sue to get them to sell to you again and maybe it wouldn't be worth the time/$. But, if it went to court...
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Old 12-13-2005, 02:24 PM #13
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You say SMP is trying to control the market so we can raise our whoelsale prices later when it stabilizes? We dropped our whoelsale prices on markers the beginning on 2005. Ours are not going up at all. We do it so that the retailers can make money on our product. This helps the stores make money. If they make money, then they stay in business. If they stay in business, they create more players. More players = growth in the industry. Growth is bad?
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Old 12-13-2005, 02:59 PM #14
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Old 12-21-2005, 08:48 AM #15
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So if smartparts emails me and says "change your price on the ion" what if I just say NO! not that I did or anyhting im just wondering
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Old 12-21-2005, 09:13 AM #16
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Quote:
Originally Posted by jojo14
So if smartparts emails me and says "change your price on the ion" what if I just say NO! not that I did or anyhting im just wondering

The next sound you'd hear is your SP Dealer account going bye bye.
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Old 12-21-2005, 11:11 AM #17
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Quote:
Originally Posted by DasBaldDog
The next sound you'd hear is your SP Dealer account going bye bye.
I do not have an account with them, nor with any one popular enough for them to know who supplies me. hmmmmm i cant decide.
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Old 12-21-2005, 11:13 AM #18
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Old 12-21-2005, 11:23 AM #19
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We can track by serial nmber where our guns go. FYI.
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Old 12-21-2005, 12:00 PM #20
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[quote=Sean@smartpartswest]We can track by serial nmber where our guns go. FYI.[/QUOT]

Im not trying to be an ***, I just want to be sure of some things before I let someone that I have no assosiation with controll my store. And you can not track my products if I will not allow you in my store using the terms of use feature and the private policy laws. (not saying that I will or have, but it is an option)
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Old 12-21-2005, 12:10 PM #21
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[quote=jojo14]
Quote:
Originally Posted by Sean@smartpartswest
We can track by serial nmber where our guns go. FYI.[/QUOT]

Im not trying to be an ***, I just want to be sure of some things before I let someone that I have no assosiation with controll my store. And you can not track my products if I will not allow you in my store using the terms of use feature and the private policy laws.

What Sean is saying... that even if you did not receive the product straight from SP, you are honor bound to follow the same rules as everyone else.

Now while I am not sure about the legal implications involved with you violating that same honor code, I'm sure the company you DID receive the guns from will not appreciate you getting their Dealer account taken away.

You, as an unspecified end retailer, having no direct contract with SP (but rather with the wholesaler whom you acquired the product from) are not bound by any recquirement from SP to sell the guns at MAP... but I'm sure the wholesaler who provided you with the product mentioned it, and they DO have an agreement with SP which will be terminated the second that they, or any of their end retailers (ie You) violate that policy.

Now if this is simply about trying to throw off the inherent restrictions of the system... feel free to see how much longer you will be a part of the system.


It should be noted that SP enforced MAP on it's own private stores (AAPP Pro-Shop) and the stores with whom SP has been best buddies with for years (Punishers)...

I also want to take the time to Mention that SP is not the only paintball company that enforces MAP... Dye, WDP, Empire... all have a MAP policy (as far as I am aware).
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