Online reading on Ebay's fight against the MSRP
I found some excellent reading online about ebay and their effort to fight manufacturers' setting and enforcing Manufacturer's Suggest Retail Prices (the MSRP which is also known as the Manufacturer's Advertised Price or MAP).
Here are links to fascinating articles and blogs about manufacturers, discounters, ebay, the enforcers, and the law:
In the Wall Street Journal: Discounters, Monitors Face Battle on Minimum Pricing
Randy Smythe: eBay Lobbies to Stop Price Fixing: Update!
RBH in ebayinkblog: eBay Ink in Washington D.C. for AAI Press Conference
June 27, 2007 NY Times article about the Leegin/Supreme Court ruling: Century-Old Ban Lifted on Minimum Retail Pricing
The more items that are sold on ebay, the more revenue that ebay makes from Final Value Fees. When ebay sellers can offer items cheaper than can be found elsewhere, then more people buy. That sounds good for the consumer. Right? Hmmmmm. Maybe. Maybe not.
Lower prices can be good but it isn't all as simple or necessarily as good as it sounds for everyone. For businesses to remain in business, they need to make enough profit to cover their expenses and enough profit to make their effort worthwhile. If manufacturers aren't able to control the prices at which their goods are sold, their goods can be devalued by distributors who seek to undercut each other to the point where eventually the manufacturers would need to cut wholesale prices and on down it goes until there is nothing left. No profit. No manufacturer. No goods.
Sellers won't continue to try to sell a product if they can't make money at it. Not even on ebay. No one is that dedicated or that stupid.
This is similar to the effect that a big discounter like a WalMart can have on the financial viability of small businesses that are located nearby. The end result is less variety of goods and less competition because smaller businesses with a wide variety of offerings and services can't compete on price alone.
Ebay calls the manufacturer's enforcement of the MSRP "price fixing". However, it might be ebay that wishes to "fix" the prices so that ebay can reap more profit at the expense of other companies. Could it be that it is more about one big company that wishes to push its own agenda down the throats of other companies than it is about a company that is truly concerned about the wellbeing of consumers and "price fixing"?
Since we are antiques dealers the issues raised in these court cases don't impact us as much as they affect sellers of new things. We don't buy and sell new items. However, we do sell on ebay and the way that ebay markets the site can affect sales for all sellers regardless of whether their inventory is new or anitque. Ebay's recent decision to market itself as the place to get the best deal in the sense of the lowest price is an approach that runs counter to how antiques dealers and antiques auctioneers market themselves and their offerings. Those who are in the antiques business don't seek to offer everything at the lowest price. We are in a competitive business where we actively compete to acquire great things for our customers. We offer great items at fair prices based on the quality of what we have for sale.
After over a decade of buying and selling on ebay in a way that once upon a time fit well with our business goals, antiques dealers find themselves involved in a relationship with an ebay that is now trying to reinvent itself as the universe's Walmart. What a surprise!
Ginny's Links:
Virginia Caputo Photography
Ginny & Jim's eBay Store: Imajgin Antiques Photography Books
The Lancaster County Art Association
The LCAA's Squidoo Page
Here are links to fascinating articles and blogs about manufacturers, discounters, ebay, the enforcers, and the law:
In the Wall Street Journal: Discounters, Monitors Face Battle on Minimum Pricing
Randy Smythe: eBay Lobbies to Stop Price Fixing: Update!
RBH in ebayinkblog: eBay Ink in Washington D.C. for AAI Press Conference
June 27, 2007 NY Times article about the Leegin/Supreme Court ruling: Century-Old Ban Lifted on Minimum Retail Pricing
The more items that are sold on ebay, the more revenue that ebay makes from Final Value Fees. When ebay sellers can offer items cheaper than can be found elsewhere, then more people buy. That sounds good for the consumer. Right? Hmmmmm. Maybe. Maybe not.
Lower prices can be good but it isn't all as simple or necessarily as good as it sounds for everyone. For businesses to remain in business, they need to make enough profit to cover their expenses and enough profit to make their effort worthwhile. If manufacturers aren't able to control the prices at which their goods are sold, their goods can be devalued by distributors who seek to undercut each other to the point where eventually the manufacturers would need to cut wholesale prices and on down it goes until there is nothing left. No profit. No manufacturer. No goods.
Sellers won't continue to try to sell a product if they can't make money at it. Not even on ebay. No one is that dedicated or that stupid.
This is similar to the effect that a big discounter like a WalMart can have on the financial viability of small businesses that are located nearby. The end result is less variety of goods and less competition because smaller businesses with a wide variety of offerings and services can't compete on price alone.
Ebay calls the manufacturer's enforcement of the MSRP "price fixing". However, it might be ebay that wishes to "fix" the prices so that ebay can reap more profit at the expense of other companies. Could it be that it is more about one big company that wishes to push its own agenda down the throats of other companies than it is about a company that is truly concerned about the wellbeing of consumers and "price fixing"?
Since we are antiques dealers the issues raised in these court cases don't impact us as much as they affect sellers of new things. We don't buy and sell new items. However, we do sell on ebay and the way that ebay markets the site can affect sales for all sellers regardless of whether their inventory is new or anitque. Ebay's recent decision to market itself as the place to get the best deal in the sense of the lowest price is an approach that runs counter to how antiques dealers and antiques auctioneers market themselves and their offerings. Those who are in the antiques business don't seek to offer everything at the lowest price. We are in a competitive business where we actively compete to acquire great things for our customers. We offer great items at fair prices based on the quality of what we have for sale.
After over a decade of buying and selling on ebay in a way that once upon a time fit well with our business goals, antiques dealers find themselves involved in a relationship with an ebay that is now trying to reinvent itself as the universe's Walmart. What a surprise!
Ginny's Links:
Virginia Caputo Photography
Ginny & Jim's eBay Store: Imajgin Antiques Photography Books
The Lancaster County Art Association
The LCAA's Squidoo Page
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