Court case could have far reaching affect on internet retailers
I am not very involved in the retail side of internet marketing, but I know many of my readers are.
A court case in 1911, Dr. Miles Medical Co. v. John D. Park & Sons Co., prevented manufacturers from forcing a retailer from selling a product at a minimum price. The case is now under challenge.
If this case were overturned it would allow manufacturers to cut out retailers who sell their products under a given price. Currently, if a manufacturer does this they can be liable for large sums of money. The case here involves a retailer who was awarded $1.2 million after the manufacturer cut them out for having a temporary sale.
From the Charleston Daily Mail —
“Basically, they want to get rid of discounters, particularly Internet discounters,” Cooper said. He added that if manufacturers’ actions must be challenged on a case-by-case basis, “the burden becomes immense.”
Retail is a really tough game, especially for affiliates. Between returns and dropped cookies and not always getting paid for upsells (yes one retailer I tested told me I only got paid for items on the landing page, not anything else that ended up in the basket!) plus retailers showing different prices depending on if it is an affiliate link or not….Lots of issues that made me avoid almost everything where I got a percentage of the sale….
Comment by Diorex — March 27, 2007 @ 5:52 pm
This wont change much but it will make it EASIER for manufactures to drop retailers but it’s not like it’s not happening already. One example that comes to mind is Rubicon Express (4×4/off-road parts). Their documents basically say you can NOT “offer” their products for sale for less than their asking price (MSRP). They don’t say you can’t sell for under MSRP just you can NOT promote for under their price. I’ve know people who have been dropped from them by promoting lower prices on their website.
Another example is magazine clearing houses have a required selling price if you sell for under the price they tell you then you risk an audit. If they audit you (3rd party) and find you selling under the required rate they will drop you. Not only can you not promote magazines under their required prices you have to prove the sale, deposit and transaction method to them.
Comment by ToddW — March 27, 2007 @ 6:31 pm
Andrew – I’d love for more information regarding this court case. I’d like to present it to some companies who require you to sell for what they ask and see what they have to say
Comment by ToddW — March 27, 2007 @ 6:33 pm
Note: My magazine example may be invalid since it’s “drop shipping” and you are not reselling a product you already purchased and have in stock.
Comment by ToddW — March 27, 2007 @ 6:38 pm
Yeah Todd, magazine subscriptions fall under a different set of rules since you are selling a service (subscription) vs selling products. There are a lot of problems in the magazine industry though, as big players continue to sell under authorized prices while small players can be quickly terminated for trying to compete with them.
Comment by rpanella — March 27, 2007 @ 7:36 pm
I would question your intrepretation of the law as in my experience this price fixing is hugely rampant. The majority of manufacturers & wholesalers I work with have minimum prices. I find it hard to believe so many would be doing something illegal.
Comment by Chris Beasley — March 28, 2007 @ 9:58 am
Then again I read that article and what do you know… it seems it is illegal.
Good thing I ignore those pricing constraints half the time anyways.
Comment by Chris Beasley — March 28, 2007 @ 10:01 am
Yeah, this was news to me. The suprising part is the original court case is nearly 100 years old!
Comment by Andrew — March 29, 2007 @ 1:31 am
hey,really there is a scope to earn more money in the internet based business.one should have proper awareness regarding internet marketing, result oriented strategy and taking wise decisions at right time is so important for any business success.similar…..internet marketing
Comment by Liz Barton — March 29, 2007 @ 4:42 am