Do companies ever make basses worse on purpose?

[bassguitar]

I'm glad that someone resurrected this thread because it reminds me of an often hotly debated topic i've come across in firearms forums. And I think the parallels may be similar.

In firearms forums, many people argue that large chain retailers (i.e Wal-Mart) sell firearms of lower quality than their smaller, independent competitors.

Allow me to give you some background.

There are 2 main points in this argument.
1. Many contend that both large-scale, discount retailers and small independent stores sell weapons that are identically labeled and branded. However, to keep costs down at the large store, many feel that the QC on the firearms they carry is below the level of QC on firearms sold at the smaller store. The 2 weapons will have nearly identical specs on paper, but many feel that the retailer who buys from the manufacturer in considerable bulk will be sold weapons with exhibiting a lower quality barrel or a poorer quality stock, the finish may not be completed properly or the mechanics are not properly filed and deburred.

The reason a manufacturer would do this is that no one on the retailer end of things will check for proper quality control. They simply do not have the man power to measure and test the thousands of firearms that get re-distributed to thousands of retail outlets.

And when purchasing from a large-scale retailer, you are more often than not, sold a weapon new-in-the-box and not sold the display case model that you had the opportunity to handle.

2. Many times, large retailers, as part of a dealer-recognition promotion will be allowed to sell special edition firearms with slightly different cosmetics. For the most part, the weapon will be identical to a standard production model, but differ in some minor detail like barrel or stock finish.

Now, I have seen this exact thing at GC's. GC, MF, and M123 often get basses with an "exclusive" finish. Case in point, a few years ago, GC advertised and sold a yamaha BB series bass (the old NE style) with an exclusive blue finish. This finish was not available anywhere and was not listed on Yamaha's website.

I guess, my point is, is it beneficial for some instrument (i.e guitar and bass) manufacturers to scrimp on the hardware or QC for large orders of instruments going to a major chain outlet?

Many people argue about the quality and setup of instruments found at GC and I sometimes wonder if manufacturers are "inentionally" building a slightly subpar instrument, using inferior woods, parts or QC.

Is a Fender American Standard J bass from GC different than a Fender American Standard J bass from Bass Central (or insert any smaller non-chain retailier here)?

*and a little off topic*
WTH? Guns are dumb. Walmart should not be in the business of selling guns. Nobody should for that matter.
*and back to your topic*

 

[guy n. cognito]

*and a little off topic*
WTH? Guns are dumb. Walmart should not be in the business of selling guns. Nobody should for that matter.
*and back to your topic*

Insightful. Thanks for contributing.

 

[Tactician]

Cognito - let it go mate. Some poeple will never understand that a Rolex isn't about telling time or about how cheap can you buy it.

I heard on the radio yesterday that a violinist had paid $43,000 for her instrument. A student at the school I teach at has just paid $7000 for a cello (and made in China).

Guitarists and Bassists are spoilt by the quality of instruments and what they have to pay. Get real guys - everyone else is paying much more for pro quality instruments. Thank god you guys don't play the basson or the concert harp. (Look up the prices and weep!)

 

[superblues]

*and a little off topic*
WTH? Guns are dumb. Walmart should not be in the business of selling guns. Nobody should for that matter.
*and back to your topic*

Thank you for your Off Topic opinions.
In my opinion, Wal Mart has every right to be in the business of selling guns (or guitars for that matter). I dont generally choose to shop there, but that's my choice.

Unfortunately, the point of the gun post was lost on some. I'm genuinely sorry that the first 6 sections were so painful to get through that some may have missed the parallels drawn to instrument retailing mentioned in the 7th section. I do think that the post and the questions presented therein are quite relevant.

Aren't you glad that we're all entitled to opinions?

regardless of all this...the topic at hand is about manufacturing instruments of lower quality on purpose.

There are many ways to interpret this connundrum.

I feel it should be a no-brainer that within any one company's product lineup, there may be products of differing quality. An MIM Fender is likely to be of lesser quality than an MIA Fender. An SUB is likely to be of lesser quality than a genuine SR. A Yamaha RBX170 is likely to be of lesser quality than a John Myung or John Pattitucci Signature model. I do not interpret the question this way, as attempting to answer is completely subjective in nature and speculation at best.

Now I interpret that the original question is asking whether a builder or factory will manufacture a specific model of bass to varying levels of QC. For example, is one specific '62 jazz bass reissue held to the same QC standards as another '62 j bass reissue from the same production run?

 

[invader3k]

I think bashing the MIM Fenders is a little unfair. I bet they're better than the average starter bass you could've gotten out of a catalog or general store 30 or 40 years ago (for a comparable price, and factoring in inflation). Yeah, they're not as good as the MIA basses (I love both of my MIA Fenders), but they're a good option for a beginning player. It's too Fender's benefit, as well as the consumer's, to have them offer a variety of instruments at different price points.

 

[dangnewt]

Here is an interesting article from Tim Hartford, "The Underground Economist" on the concept of companys intentionally making products worse for marketing reasons.

http://www.slate.com/id/2133754/

My guess is that bass manufacturers are susceptible to the practice.

 

[Pneuma]

You just don't get it. Please tell me, how do you know that prices would be lower? Is ANY retailer that you can find currently sitting on a large inventory of Sadowskys that they simply can't sell because of the price? Is Sadowsky, because of their price floor requirements of dealers, NOT selling basses? Is any retailer forced to sell Sadowskys and submit to their pricing floors? Is there any evidence whatsoever that Sad prices are prohibiting them from selling the basses they produce?

The existance of a MAP in and of itself suggests that prices would be lower if it were not in place. If they wouldn't be, why is it there? That's why it stands for minimum advertised price. That's the lowest Sad will let it's dealers advertise. I don't have to know what the demand is like, it's a built in constant based on manufactuer practice.

You seem to think that there is some magical, mystical price at which these basses will sell, and that price is lower than the current market price. Allow me to give you a clue: These basses are selling at the current market price. Based on my experience and conversations with local dealers, they are selling quite well at that. The goal of any seller of goods is to SELL ALL OF THE PRODUCT THEY CAN PRODUCE AT THE HIGHEST PRICE THE MARKET WILL PAY FOR THEIR PRODUCT! PERIOD. Who knows what reasons Sad has for pricing controls, and who cares? They make good basses, and can sell those basses at the price they choose.

Apparently, everyone in this conversation cares, or they wouldn't be reading and responding. Again, just because the basses are selling doesn't mean that the prices wouldn't be lower if the MAPs went away. You keep citing dealers turning over their inventory as proof, then let me ask... if demand is so strong, why aren't they selling for more than MAP? That's not prohibited, and if the demand is so high, why not increase the price?

I think you are confusing either your inability to afford a Sad or your unwillingness to purchase a Sad at the current pricepoint with some inequality in the supply and demand for their product. While you may be unwilling or unable to purchase a Sad at the current pricepoint, there seems to be plenty of buyers that can and do.

Sure, again, that doesn't mean that prices wouldn't be lower without the MAP. I'm simply saying that those who are buying at these prices are paying more than they should be. Anytime MAP pricing is being instituded it betrays that principle. MAPs don't give the consumers better deals, they cost them more money.

P.

 

[Pneuma]

You do not know and cannot prove that the price of Sadowsky's would be lower. The simple issue that you are ignoring is that Sadowskys (and every other bass out there) sell at a price that the market will bear.

Let me repeat the economics 101 lesson: goods sell at a price that the market will bear.

Again, then why have a MAP? If prices wouldn't be lower, what is it there for?

If Sadowsky chooses to set a lower limit on its sales price, fine - its their product, they can do how they please with it. Sadowsky does this simply because its better for their business. it is not personal and they are not trying to keep a Sadowsky out of your hands. Conversely, what they are trying to do is put a Sadowsky bass in your hands, albeit at a higher price than you really want to pay. If you really want a Sadowsky and nothing else, sooner or later, you'll pay for one.

Technically, after the dealer pays for it, it's not Sadowsky's product anymore. That's my main grumble, why does Sad have anything to do with what a dealer wants to charge.

Bottom line: the benefits of the price floor clearly outweigh not having a price floor. economically, they must be justified in having the price floor. it is driving up their profits or they would have gotten rid of it.

Benefits who? It doesn't benefit the consumer much unless they agree with a lot of other things.

how are they eliminating competiton by "artifically" raising prices? it seems to me they are inviting competiton. if you can afford a Sadowsky, you can afford anything less expensive than a Sadowsky. Plenty of room for an upstart competitor to come in and try to undercut a potential Sadowsky sale. If you can only afford an SX, you CANNOT afford a typical Sadowsky and are clearly not in the buying market for one. not much room for competition here.

I'm not talking about other manufacturers' competition. I'm talking about the retail competition among dealers.

sure you may have ethical issues with Sadowsky's practices, but economically, what they are doing is on sound footing.

Right, but economically, a monopoly makes a lot of sense too. So does price fixing among competitors, and oil cartels. But they all elminate some of the effectiveness of a market.

P.

 

[Pneuma]

A big point is being missed:

You have no idea what wholesale price Sadowsky is charging its dealers.

This is important because an assumption is being made that all similar goods have similar markups -- and that's not necessarily the case.

Let's look at two basses selling for $1500 -- One Fender, one Sadowsky.

Fender might "retail" that bass at $2000 and wholesale it at $1000. Sadowsky has the $1500 retail and wholesales it at $1200.

The Fender might look like a better deal at the dealer level, but in reality, the dealer's really making less money on the Sad.

Now, let's get to the MAP: While it's true that the MAP "fixes" a price, it's also an assurance to the select dealers that in TRADE for taking a smaller markup, Sad will fix the prices so the dealers won't have to take a bath at retail. It's a contract of sorts because both parties benefit.

The above scenario is wholly fictitious in case anyone might be interested. It's for illustrative purposes only. I don't know jack about Fender's or Sad's wholesale structures.

And this is exactly why MAPs are around. I completely understand why a company would want that. Here's my problem with it:

What if I'm a dealer that operates on slim margins? I undercut my competitors pricing to gain high volume sales. This large economy helps my customers who don't want to pay for "benefits" that come from a local small dealer because they feel competent in caring for their own instrument, and dealing with the manufacturer directly on any warranty claims. Those who are willing to take this responsibility are rewarded by savings on the front end.

With MAPs, this is not possible. There's no incentive for efficiency.

Removing a MAP doesn't mean that dealers would have to drop their prices or margins, it just allows those who would to do so. It gives people the option of selecting how much service they want to pay for.

P.

 

[Stuggi]

Here it go: Once upon a time, Fender ALL Fenders were MIA!

Now all of a sudden, we get Fenders made in mexico which are cheaper with inferior wood, inferior pick ups and inferior tuners, weak sheilding, while the american made fenders are $1500!!!!!!

I know some production lines should have certain features and some should not, but I think a few things should be standard across the freakin' board!

1) The tuners

2) The bridge

3) Sheilding

This is the core fundemental aspects of being a musician playing an instrument. Youwant the damn thing to stay in tune, you want perfect your techniques without having the strings fall to the fret board because of a wimpy bridge, and you want the freakin' thing to be silent!

I mean come on, how hard is this?!!!!!

G&L uses the same pickup's in their Korean Tribute Models and the MIA ones. The Tribute bridges are about the same as the the MIA ones, except that they are cast and then milled, as opposed to the MIA's that are milled out of a solid chunk of brass. Doesn't really matter if it's cast properly, and I can't tell any difference. As far as the shielding goes it's superb, then they do use humbuckers.

But then again my G&L Tribute cost 900 €, a MIA Jazz cost about 1200 € in the same store. The "real" G&L's is about 1500€ upwards here in Finland

 

[guy n. cognito]

The existance of a MAP in and of itself suggests that prices would be lower if it were not in place. If they wouldn't be, why is it there? That's why it stands for minimum advertised price. That's the lowest Sad will let it's dealers advertise. I don't have to know what the demand is like, it's a built in constant based on manufactuer practice.



Apparently, everyone in this conversation cares, or they wouldn't be reading and responding. Again, just because the basses are selling doesn't mean that the prices wouldn't be lower if the MAPs went away. You keep citing dealers turning over their inventory as proof, then let me ask... if demand is so strong, why aren't they selling for more than MAP? That's not prohibited, and if the demand is so high, why not increase the price?



Sure, again, that doesn't mean that prices wouldn't be lower without the MAP. I'm simply saying that those who are buying at these prices are paying more than they should be. Anytime MAP pricing is being instituded it betrays that principle. MAPs don't give the consumers better deals, they cost them more money.

P.

Let me ask you this: If I give you 15 widgets and you can sell those widget for $15 apiece, would you CHOOSE to sell them for $10? Better yet, if everyone is selling widgets at $15, would you choose to sell them at $20? If you answer yes to either question, then let me suggest that you never open your own retail business.

The reason that dealers don't sell Sadowskys for more than the MAP is that the market is at a certain level of equilibrium. Buyers believe they are paying a fair price, and sellers are selling all of their inventory. Which dealer is going to be the first to start selling OVER retail? If my dealer tried to sell a Metro for $2600, when I could buy it from another dealer for $2200, then I would simply buy it from the second dealer. My dealer's sales would dry up. Competition keeps the dealers from asking more for these basses than the general market. Besides, are we sure that Sad will even allow their dealers to mark up the basses beyond the stated sales price?

Back on topic: Have you spoken with any retailer that have issues with Sadowsky MAP? Have you met any dealers that refuse to sell Sadowsky basses because of the MAP? You seem to think it is a huge issue, but Sads are still selling and inventories seem low. I know you want to be convinced that the bass buying public is being screwed because Sadowsky insists that their basses not be sold at a discount, but antecdotal information would seem to prove otherwise.

This bit of logic keeps escaping you: RETAILERS(OR MANUFACTURERS, OR WHOLESALERS) WANT TO SELL ALL OF THE GOODS IN THEIR INVENTORY FOR AS MUCH MONEY AS THE MARKET WILL BEAR. Personally, I have yet to meet a retailer (and I know several) who are selling luxury goods that would CHOOSE to sell those goods for less. Let me give you some examples: The first you've already heard. A local dealer here in town is a Sadowsky retailer. He can sell EVERY single Sadowsky he get in stock in a very short period of time. He has told me directly that he would never discount a Sadowsky for a potential buyer, because he can always find a buyer that will pay retail. He has never even mentioned a SAD map to me, because it isn't an issue for him. The second example is another local dealer who carries Mesa Boogie. He informes me that they have MAP for all of their goods as well. He also tells me that he sells his Mesa gear very quickly. Bass amps tend to sell within 60 days, and guitar amps go quicker than that. Now, if a buyer tries to negotiate the asking price for a Mesa, he will tell them that "Mesa won't let me discount that price." In reality, he tells me that he would never discount the price, because he will sell them anyway.

There is a different mentality when selling luxury goods (a $2,200 bass is, indeed, a luxury good.) In addition to selling the merchandise, you are selling prestige, exclusivity, uniqueness, etc. You want your end users to feel like they own something special. Price isn't always the object with a luxury product. Some companies that sell luxury goods refuse to offer them at a discount or "on sale" for marketing reasons more than anything else. You may not like it, or agree with it, but if they can sell their goods at their prices, then all is right with the world.

 

[guy n. cognito]

And this is exactly why MAPs are around. I completely understand why a company would want that. Here's my problem with it:

What if I'm a dealer that operates on slim margins? I undercut my competitors pricing to gain high volume sales. This large economy helps my customers who don't want to pay for "benefits" that come from a local small dealer because they feel competent in caring for their own instrument, and dealing with the manufacturer directly on any warranty claims. Those who are willing to take this responsibility are rewarded by savings on the front end.

With MAPs, this is not possible. There's no incentive for efficiency.

Removing a MAP doesn't mean that dealers would have to drop their prices or margins, it just allows those who would to do so. It gives people the option of selecting how much service they want to pay for.

P.

Do you think that Sadowsky, or any other luxury brand, wants to be sold by these "high volume, low prices" types of dealers? It would dimish their brand. Furthermore, these types of retailers tend to demand discounts from the manufacturer. Why would Sad sell goods to these types of retailers, when they seem to be able to sell every bass they produce at higher prices? Do you think the Sadowsky name would have as much prestige if they were available at every Sam Good and Guitar Center in town? Of course not.

Luxury good manufacturers are often picky about their distribution channels for the reasons I stated above. They typically want their goods sold by professionals to discerning clients, not by acne-faced clerks to bargain shoppers.

I'll say again: If SAD can sell every bass they make at current prices, what incentive do they have to lower those prices? If retailers can sell Sadowsky basses at current prices, why would they want to sell them at lower prices?

You want to bargain shop a Sadowsky. That is not possible. It is clearly not the brand to best fit your needs.

 

[superblues]

Benefits who? It doesn't benefit the consumer much unless they agree with a lot of other things.
.

I really appreciate your idealism with respect to this issue. but i politely disagree with your point of view. it does make a lot of sense for a retailer to sell a particular product at a cheaper price than a competiting retailer can sell that particular product. Clearly, the lower priced retailer is likely to sell more product. But that doesnt necessarily translate to greater profits. The second retailer will have to make up for the smaller margins with increased sales volume or increased sales on other items. This is basically how large chain stores operate. The goal of any comapny (retail, wholesale, manufacture or otherwise) is to profit more than the competitors.

If carrying Sadowsky will help a retailer increase their profits enough to justify MAPs or any other requirements from the manufacturer, the retailer will gladly stock Sadowskys.

and don't take this personally, but the retailer only cares about the consumer's money and nothing more. any retailer who tells you otherwise is not entirely honest. businesses only value providing customer service because customer service leads to word of mouth sales, repeat customers, and the like. customer service is only in place to increase profits.

 

[Tactician]

Crikey - does anyone here have some core expertise about the subject? I'm not a marketing expert, I'm an ex-salesperson that gave it all up 4 years ago and now plays bass and guitar full time. Anyone else want to come forward as a real Marketing / Maufacturing / Cost analyst? Because we're just going round in circles here.

I have in my time hung out with some pretty good gurus at this sort of thing though - so here goes. My friends always said -

1. What business are you in? (Not necessarily what you make but what people are buying beyond the product - clue; Kodak are in the memories business)
2. Who are the must haves? (Who are the target market, what are the segments?)
3. How do you pursuade them to buy your product? (Marketing - a) you can differentiate, b) you can appeal to niches or c) you can go for cost leadership - but you can only do one of these three for a given customer)
4. To deliver 1,2 & 3 what do we have to be good at?

All the plans, tactics, strategies, segmentation, price-points, quality, supply and demand issues you're discussing all come from those basic 4 questions.

Now you can analyse who's who and why they're doing what they're doing. Can we stop now - my heads hurting. That's why I gave up all this marketing, pricing, customer worrying and started playing again - so I could let others do all the stressy worrying.

 

[Pneuma]

Let me ask you this: If I give you 15 widgets and you can sell those widget for $15 apiece, would you CHOOSE to sell them for $10? Better yet, if everyone is selling widgets at $15, would you choose to sell them at $20? If you answer yes to either question, then let me suggest that you never open your own retail business.

I wouldn't, but that is not the issue. The issue is, who decides what the price is? Should it be the retailer, or the person the retailer bought them from?

The reason that dealers don't sell Sadowskys for more than the MAP is that the market is at a certain level of equilibrium. Buyers believe they are paying a fair price, and sellers are selling all of their inventory. Which dealer is going to be the first to start selling OVER retail? If my dealer tried to sell a Metro for $2600, when I could buy it from another dealer for $2200, then I would simply buy it from the second dealer. My dealer's sales would dry up. Competition keeps the dealers from asking more for these basses than the general market. Besides, are we sure that Sad will even allow their dealers to mark up the basses beyond the stated sales price?

You're making my point for me here. That's how I know that prices would be lower without the MAP. Without it, there wouldn't be the barrier to lower prices.

Back on topic: Have you spoken with any retailer that have issues with Sadowsky MAP? Have you met any dealers that refuse to sell Sadowsky basses because of the MAP? You seem to think it is a huge issue, but Sads are still selling and inventories seem low. I know you want to be convinced that the bass buying public is being screwed because Sadowsky insists that their basses not be sold at a discount, but antecdotal information would seem to prove otherwise.[/qutoe]

Nope, never said it was a big deal. I'm enjoying the conversation. I only brought it up in a one sentence side comment. Everyone else kept running with it, so why drop the subject? It's fun.

This bit of logic keeps escaping you: RETAILERS(OR MANUFACTURERS, OR WHOLESALERS) WANT TO SELL ALL OF THE GOODS IN THEIR INVENTORY FOR AS MUCH MONEY AS THE MARKET WILL BEAR. Personally, I have yet to meet a retailer (and I know several) who are selling luxury goods that would CHOOSE to sell those goods for less. Let me give you some examples: The first you've already heard. A local dealer here in town is a Sadowsky retailer. He can sell EVERY single Sadowsky he get in stock in a very short period of time. He has told me directly that he would never discount a Sadowsky for a potential buyer, because he can always find a buyer that will pay retail. He has never even mentioned a SAD map to me, because it isn't an issue for him.

It hasn't escaped me at all. You seem to have skipped over a great deal of what I'm saying. They don't want to lower prices, but if they were allowed control over pricing, prices would go down. It just happens due to competition. Right now, they don't have to lower prices because they have the lowest price. Everyone has the same price, so they don't have any price competition. There is no pressure. That's the problem. Why should he have to lower prices? The buyer can't get a better deal anywhere else. It's price fixing.

There is a different mentality when selling luxury goods (a $2,200 bass is, indeed, a luxury good.) In addition to selling the merchandise, you are selling prestige, exclusivity, uniqueness, etc. You want your end users to feel like they own something special. Price isn't always the object with a luxury product. Some companies that sell luxury goods refuse to offer them at a discount or "on sale" for marketing reasons more than anything else. You may not like it, or agree with it, but if they can sell their goods at their prices, then all is right with the world.

Eh, maybe, but I think you're attributing the term "luxury good" more specifically than it's intended to be. Luxury good is simply a label for certain demand/income interactions. They don't have to sell anything but the object itself. It's simply that they are non-essential items that people buy more of when they have more money. I'd say that there are plenty of people who'd love a Sadowsky even if they only cost $1200 for a NYC. It wouldn't deteriorate the value of the brand at all in most people's minds.

P.

 

[Pneuma]

Do you think that Sadowsky, or any other luxury brand, wants to be sold by these "high volume, low prices" types of dealers? It would dimish their brand. Furthermore, these types of retailers tend to demand discounts from the manufacturer. Why would Sad sell goods to these types of retailers, when they seem to be able to sell every bass they produce at higher prices? Do you think the Sadowsky name would have as much prestige if they were available at every Sam Good and Guitar Center in town? Of course not.

I, personally, don't care about all that. It simply enforces my point that Sadowskys are artificially over-valued.

Luxury good manufacturers are often picky about their distribution channels for the reasons I stated above. They typically want their goods sold by professionals to discerning clients, not by acne-faced clerks to bargain shoppers.

I haven't said a thing about their retailers being bad, or inferior. I'm simply talking about who is controlling the prices.

I'll say again: If SAD can sell every bass they make at current prices, what incentive do they have to lower those prices? If retailers can sell Sadowsky basses at current prices, why would they want to sell them at lower prices?

You want to bargain shop a Sadowsky. That is not possible. It is clearly not the brand to best fit your needs.

I'm not shopping Sad, but thanks for the insight. You keep on giving me more and more evidence that I'm right. People are paying more for Sads than they would without MAP pricing. They may not care, but it's still true.

P.

 

[Pneuma]

I really appreciate your idealism with respect to this issue. but i politely disagree with your point of view. it does make a lot of sense for a retailer to sell a particular product at a cheaper price than a competiting retailer can sell that particular product. Clearly, the lower priced retailer is likely to sell more product. But that doesnt necessarily translate to greater profits. The second retailer will have to make up for the smaller margins with increased sales volume or increased sales on other items. This is basically how large chain stores operate. The goal of any comapny (retail, wholesale, manufacture or otherwise) is to profit more than the competitors.

Yup, and there are a lot of businesses that thrive on that concept.

If carrying Sadowsky will help a retailer increase their profits enough to justify MAPs or any other requirements from the manufacturer, the retailer will gladly stock Sadowskys.

I couldn't agree more.

and don't take this personally, but the retailer only cares about the consumer's money and nothing more. any retailer who tells you otherwise is not entirely honest. businesses only value providing customer service because customer service leads to word of mouth sales, repeat customers, and the like. customer service is only in place to increase profits.

Exactly. I think everyone here seems to think I'm a dealer advocate. I'm not. I'm a consumer advocate. I'm not wanting to remove MAPs because I think it'll help the little guy dealer. I think it would help the guy who's buying the bass, in the short run AND the long run. Why should the buyer pay a little local shop more for service that he might not intend on using? I think more price choices = better. That way, if the buyer wants to pay more for the local treatment and service, fine. If not, fine. There's an option for both. With MAPs, there is no option.

Small dealers LOVE MAPs, I'm sure. It guarantees their profit margin. They don't have to be efficient to compete with internet or volume retailers.

P.

 

[guy n. cognito]

I, personally, don't care about all that. It simply enforces my point that Sadowskys are artificially over-valued.



.

If Sads were "overvalued", people wouldn't buy them. They would be sitting on the shelves. They aren't. The price has been set, and people are happily paying it. Supply and demand for the product are in equilibrium, despite the dreaded MAP. Sad has no incentive to allow lower prices, and neither do the dealers. Why? Again, because they are able to sell all of their inventory at current prices. The buyers don't need any help, because this is a luxury good. People buy it if they can afford it, and they don't if they can't. Put another way, if buyer's needed help, then the goods wouldn't be selling. But they are selling. Nothing is broken with this system. Many, many products are sold without giving buyers "options." The only time this need to be changed is when the item doesn't sell.

Feel free to break this down and respond sentence by sentence if that helps you. You just don't grasp these simple concepts, and I'm done trying to explain it to you. Good luck to you.

 

[Pneuma]

If Sads were "overvalued", people wouldn't buy them. They would be sitting on the shelves. They aren't. The price has been set, and people are happily paying it. Supply and demand for the product are in equilibrium, despite the dreaded MAP. Sad has no incentive to allow lower prices, and neither do the dealers. Why? Again, because they are able to sell all of their inventory at current prices. The buyers don't need any help, because this is a luxury good. People buy it if they can afford it, and they don't if they can't. Put another way, if buyer's needed help, then the goods wouldn't be selling. But they are selling. Nothing is broken with this system. Many, many products are sold without giving buyers "options." The only time this need to be changed is when the item doesn't sell.

Feel free to break this down and respond sentence by sentence if that helps you. You just don't grasp these simple concepts, and I'm done trying to explain it to you. Good luck to you.

And for all I've missed, still, my main point is always avoided. If MAPs don't hold prices above a certain point, then what are they for? If prices won't go down without the MAP, why do they use them?

You tell me. It seems rather obvious to me.

P.

 

[Tactician]

Without MAP prices would go down as stores would compete on price for the business.

But distribution would then polarise to those able to buy at a better price and then pass that on to customers. That mean fewer outlets as those too small to get the better price pull out of stocking the product. Then pressure goes onto the manufacturer to give even lower prices as the bigger stores realise they are becoming that manufacturers only route to market. Something has to give and usually it's quality of product, customer service, reduced range or a new even cheaper range.

Most top end manufacturers keep a set of controlling T&Cs on their supply chain to keep prices at a level that reflects the quality of the product. (Only the desparate ones don't). And as Cog says, these products sell at that high price - so what's the problem?

If I were selling high-end basses I'd definately apply strict pricing controls to my retail outlet clients. But they also have a free choice; to work my way, or supply another product. The trick is getting customers who want my basses to go into the stores and ask for them and buy them whatever the price. If you can do that everyone wants to deal with you as it's easy to stock and sell the product.