Gregor said:
DeformedTree said:
Having standardized prices is a good thing as was mentioned by others, race to the bottom pricing isn't good for anyone, and thus why so many companies have shifted to this model.
Good for
all, except for the customers.
This kind of price fixing is illegal in many countries for exactly that reason.
It's not price fixing. If Festool called up Mafell and other members of the Track Saw Manufactures Association of Earth and decided on a price they would all charge for track saws, that would be price fixing. This sort of action is taken seriously in most all countries including countries like the US.
Festool makes the products and says it cost X amount. There is no price fixing when the maker of it decides the price on their own. That's what every product made has. One company can not "price fix" by itself.
A company like Festool does not have to sell thru 3rd parties. They could just sell them all themselves and the price would be the price just like it is now. They give others the ability to sell Festool products and in exchange those re-sellers agree to the price.
When you don't control the price across the board you get all forms of problem, mainly scammers. People go "price hunting" find some shop with a price much lower than the rest, so they buy from it and think they are getting a deal. Maybe the product will ship, maybe they never see it, or maybe random charges end up on credit card that can't be explained, or hidden fees. Have a problem, oops that website doesn't exist anymore, where did they go. And will the people who got taken say "I made a mistake and didn't buy from a reputable shop?" No, they will go online and curse the manufacture. Having the price be the same means everyone is on the same page, people buy from where they feel is reputable, or maybe they liked the staff, or they buy from the local store since the online place is no cheaper and it means they can have the product that day and not pay shipping.
Beyond scammers, it becomes the race to the bottom. Product cost 1000 USD. Someone decides they can cut it to 990 USD. Suddenly other retailers find no one is buying because people cared that much about 10 bucks (same people who drive cross town to save 2 cents on gas and thing they are "saving"). So now everyone drops 10 bucks. Then a different shop drops 15 bucks...... Cycle continues. Now it becomes who blinks first. How many places can cut margin and still keep the lights on due to a silly war a few dollars at a time. Shop after Shop bails, consumers get mad at loss of retailers they liked. This keeps going until there is one left standing, which is almost certainly going to be the one that started the largest, so someplace like Amazon wins, and then once the last competitor is gone after the price hit 700 bucks, they turn around and the price goes to 1200 USD. This has been going on in business since forever. But now as direct sales from manufactures has become a much more practical thing in the internet age there is a way for companies to change this. The Manufacture->Distributor->Wholesaler->Retailer->Customer model with no skipping steps and each adding their own markup business model is dead. Endless companies still work this way, they just don't realize how soon/quick a new player is going to go Manufacture->Customer and blow up the world they knew. Set pricing means both or any variation of these models can co-exist.
Apple gave the market stability, companies who sold stuff below cost and would make it up in volume went away. If you want to end up with 1 retailer for all things in the future (Buy-N-Large as the Movie Wall-E had) then having shops drive the price and create destructive price wars, then sure, don't have pricing like Festool does. People don't want to live thru a Wall-Mart style destruction cycle, not in their town, not online. Sure they are cheap when they are new and growing, but once everyone else is dead they charge what ever they want.
Consumers like consistent pricing.
