Marketing Issue [RE-wrenches]

[John Berdner]

Wrenches:

Having manufacturers set pricing is illegal.
This is restraint of trade and manufactures can not do it.
What a manufacturer can do is develop a list price and then not allow
authorized retailers not to advertise at other than the list price.
This is what Apple did for years and many companies still do today.  

This is also a double edged sword since you then have to have an
authorized installer program.  The benefits of the program are the stick
to go along with the limitations on advertising prices, etc.  Without a
program there is no stick.  When we asked our customers about such a
program a year or so ago the majority of opinion was against.  When I
inquired a month or so ago only a few people expressed an opinion (which
was in support).  

Much of our industry still operates through distributors and they are
free to sell to anyone they like. Once we as a manufacturer sell a
product to a distributor, we can not dictate who they sell it to or for
how much. AS manufactures, we can get into huge urinating contests over
copyrights etc. but this is always after the fact and doesn't really
solve the problem. 

If you have any questions or if I may be of any further assistance,
please do not hesitate to contact me.

Best Regards,

John Berdner

SMA America, Inc.
12438-C Loma Rica Road
Grass Valley, CA  95945
530.273.4595 - Tel
530.274.7271 - Fax



-----Original Message-----
From: David Palumbo, Independent Power & Light [mailto:ipl at sover.net] 
Sent: Friday, May 16, 2003 07:07 AM
To: RE-wrenches at topica.com
Subject: RE: Marketing Issue [RE-wrenches]




Joe Schwartz, Home Power Wrote:
<<I have to question the reasoning behind keeping Home Power out of the
hands of potential customers in an effort to shelter them from a
couple of pages of discount pricing. These days, most people buying
PV in the U.S. have computers, and access to an endless supply of
cheap RE gear if they want it.>>

People who shop the internet for the lowest prices are not my customers.
I'm
talking about people who are my customer base that are already in my
shop.
When they see inverters in your ads costing $450 less than the list
price I
am charging them they do get upset, it is only human nature and I can't
blame them for their reaction. Same thing with PV modules sold at near
cost.
Years of experience in dealing with people in retail sales has formed my
decision on this subject. I will not carry Home Mag unless the wholesale
pricing ads are eliminated. It is purely a rational business decision on
my
part.

<<The bottom line is that the only folks that can ultimately control
discount pricing, if they choose to, are
the manufacturers.>>

I believe HP could reject these ads if they wanted to. For example they
do
not have to print ads from Budweiser or Marlboro if they don't want to.
And
they don't have to print pornographic pictures that an advertiser might
want
to include in advertising copy. And they do not have to allow discount
pricing in the ads they accept for publishing. Just because something is
on
the internet does not mean it is OK for you to publish it in your
magazine.

Sincerely,
Dave Palumbo

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