We as the manufacturer of product X, require our distributors to sell our product at our list price – neither higher nor lower. Is this common practice? Is this considered price fixing?
We only have a couple distributors and our product is in a very niche market. Product is sold mostly B2B sales.
I recently read that Walmart is reducing the price of Ipad and Iphones and I thought all the retailers were supposed to sell at the same price. Is it illegal if say Apple required Walmart and BestBuy to sell Ipads at an exact price?
Categorized | Affiliate Marketing 101
Is This Considered Price Fixing – When Manufacturer Requires All Their Distributors To Sell At The Same Price?
Posted on December 17, 2012.
Wal-Mart bargains for slightly lower wholesale prices for products..that is why they can knock a little off the price, because they contract with the company to buy at $xxx and sell at $xxx… Most manufacturers will require a specific price..but can offer concessions to someone like WM because of the quantity they will contract to buy.
Price fixing is when multiple sellers all get the same product (like gasoline) and agree among themselves to excessively mark up the price and stick to it to reap maximum profits while not losing money due to competitive pricing wars. In general, price fixing is illegal. In the instance of gas, this is regulated by the multi-national group called Opec, and determined by the supply/demand equation, including cost of production and transport…
Anyway, if only one company makes a specific product…then they set the suggested retail price. Price fixing would occur if WM, Best Buy, and all other distributers selling it conspired to inflate the price and reap the extra profits without disclosure to the manufacturer. In this case, they would all get sued by feds, and by the manufacturer for breach of contract…then even consumers could file a class action suit…costing the fixers all the money they profited and much more.