UKC

Why do companies with good reputations and good products feel to need to try and engage in blatant profiteering!

I am getting rather depressed at the number of companies heavily promoting their products via their own retail websites (or partner company websites) at full suggested retail price when third parties are selling them at anything up to a 30-40% discount.
Even worst is when they then offer token discounts or things like charitable donations as a promotional tool.

I am all in favour of supporting small and medium sized companies by buying direct but it seems that is always MORE expensive than buying via larger retailers who are taking their own cut out of the price.

Would it not be much better if companies either stopped trying to artificially support unrealistic SRPs and out-dated, inefficient supply chains or decided to move entirely towards a direct retail model (as per Alpkit)?

In reply to The Ex-Engineer:

At the end of the day, something is only worth what someone will pay for it. If companies can get away with selling at X+10% when they previously sold at X because there is demand, why wouldn't they?

I too like the idea of small retailers, but many are particularly poor. I micro pub recently popped up near my house and upon arrival I was greeted by fabulous beer and a win variety of interesting beers. But the bar person knew absolutely nothing about any of them. In fact, she had even tried them! Nice idea - really poor execution and sadly more the norm than the exception. We regrettably gave them 6 months before the shop goes up for lease again.

In reply to The Ex-Engineer:

Suggested/Recommended Retail Price is really just a sales gimmick (since competition law was enacted to prohibit manufacturers from discriminating against retailers who set their own prices) but if the manufacturer were to sell at less than their own SRP/RRP then they would probably contravene the law regarding unfair trading/trade description since the SRP/RRP would seem to have been set artificially high in order to mislead the customer as to the products true value. The manufacturer would also be undercutting any retailers selling at the SRP/RRP, which would probably annoy them and may lead to the retailers dropping their products.

In reply to The Ex-Engineer:


Got anybody particular in mind, Ex? Sure sounds like it.

In reply to The Ex-Engineer:






An alternative view might be why should a company lower it's prices because someone discounts their product to attract custom?

In reply to The Ex-Engineer:
It's only a rip off if you chose buy direct from the manufacturer at RRP rather than go to a cheaper retailer that the manufacturer prefers you to buy from.

I suspect the manufacturer wants a website for marketing with ecommerce to add online credibility but they use the RRP(SRP) because they're not very interested in retail. Everybody knows the RRP is usually a made up figure to make the normal retail price look good so the consumers buy from the retailers.

Hence the manufacturer can specialise in manufacturing and the retailer can specialise in retail which is what both the manufacturer and the retailer (high street and online) prefer.

In reply to The Ex-Engineer:

I've just bought a Grohe tap. Grohe say its £340. I paid £157 from Amazon, who list the RRP as £450. It's a nice tap (solid steel, brushed effect, pull out spray) but it isn't worth £450 - which is more than I've paid for my dishwasher.

Another tap I bought was similar "reduced" prices on two websites but different RRP.

I'm looking fit some new luggage and Samsonite list it at £150, Amazon at £67.

I rarely believe sale prices, even the local garden centre brings in tat from its sister stores to sell reduced at what should be the market price.

In reply to Philip:

Except when it comes to our fruity transglobal consumer tech Evil-Corp? Retail and Direct same price. How do they manage that and also pay no tax?

D

In reply to The Ex-Engineer:

I think you are forgetting a few key things.

1. The role of all businesses is to make profit.

2. A manufacturer or distributor has absolutely no way of controlling the prices its retailers sell its products. That would be price fixing which is illegal in the UK.

3. The manufacturer would be massivley undermining its retailers who choose to see at retail if they started selling at a discounted price.


4. Those retailers clearing in line products at 20-30% off rrp will not be partially popular with their suppliers as they will cause them big head aches from other retailers.

5. Selling direct is a great way to keep uncommercial products (for example those which are very popular with hardcore climbers but will never be forwarded ordered by Cotwold's buyers) in production.

Anyway there is some food for thought.

In reply to Tom Ripley Mountain Guide:



No quite true. Most business are that way, and particularly Plcs who have an obligation to their shareholders. But continuity, employment and image matter to some, ahead of short term profiteering. Don't tar all industries with the practices of retailers.


Not true. Manufacturers can refuse to supply retailers who don't toe the line, and they can control bulk discounts. Most of the bargains these days are end of line. Yes there's loads of stock, but the manufacturer has moved on.


True, but it does happen.


Yep.


Yes, I bet you can buy a tri-cam in Cotswold.

In reply to Tom Ripley Mountain Guide:

Spent the last half hour laughing at that.

In reply to Indy:


... Why?

In reply to Indy:

Don't get out much?

In reply to EddInaBox:


^^^^^^^ This.

Most bigger manufacturers/importers will prefer for you to buy from retailers, almost to the point that it can be difficult to find out who is the importer/sales agent for certain brands unless you are in the trade. Companies like Burton Mccall, First Ascent and Dalesman might not be commonly known to outdoor punters but between them they represent a good chunk of the bigger outdoor brands on sale in the UK, and probably manage the UK sales sites for their brands.

There are a few benefits to having a direct sales portal on your site without expecting to sell much through it - improved visibility in search results for that brand, reinforcing the perceived value (i.e. "this jacket is worth £400, it says so here...") and providing an interactive 'showroom' for the latest ranges.

It is not standard practice for manufacturers/importers to sell at anything less than SRP (apart from the odd warehouse-clearing sale) because you are then directly competing with YOUR customers (the retailers - we are the retailers customers really) and they will possibly get annoyed and go to another brand. If you stock Nikwax and have invested a couple of thousand quid in stock you'll get p*ssed off if they start selling it online much cheaper than you then you'll probably mark it all down and sell Grangers instead.

The prices on the brand websites (SRP etc) are the highest price you'll pay - the actual price of the item is the average of the actual prices you see on the high street/online. Not worth worrying about, but their higher listed prices aren't profiteering, just part of an established commerce chain.