eBay..”Price Fixing”, Doris And a Pound Of Peanuts?
Hi Ed WeBBers,
Well,the Office of Fair Trading is investigating local bus companies.
Why?
They’re investigating ‘price fixing’ in relation to local bus services.
Price fixing is big business – in fact, everyone from Argos to milk retailers have been busted for it.
Ed….does this mean that all staff at Argos and every milkman in the country will be arrested?
No…Doris, because the prime minister shops there and he likes milk on his coco puffs in the morning!
ONE DAY…
anyroad..
It occurs any time a business tries to ‘fix’ a price (as you might expect) – and that can mean ‘forcing’ retailers to sell at a Certain price without discounting, to even collaborating with your competitors to agree to sell at a
Certain price to your marketplace.
There are actually some exemptions to this including eBay?
I’m not sure about how eBay traders would fit into this.
I’ve never heard of a price-fixing case in relation to eBay sellers.
Although there may be one somewhere.
Think about it…you and your competitor are selling the same product. You ‘own’ the market.
You both agree to raise your price £5 a unit.
You are still cheaper than any retailer but are
both now making more money as a result.
Only problem is that it’s illegal to do this.
But does it still go on?
Well, it may not be ‘agreed’, but very often sellers will kind of ‘mentally agree’ (without explicitly stating) that they are going to keep prices at a certain level.
They will do this by both hitting a ‘floor’ price – with neither party going below this price. I’m sure you’ve experienced or seen such a scenario, although I’m not sure this could be classified as ‘price fixing’…
Anyway…
….what if you go up against a seller who is selling the same product as you – who just keeps chopping the price down so there is no profit left?
What do you do then?
Well, there ARE things you can do – including stopping selling that product altogether!
But that’s not always practical.
First thing you can try is listing in a ‘different’ way – a different listing approach, or even a new category.
Gets you out of their way.
You can also try packaging up the product – Offering two in a pack, for example, or offering
your product along with some other ‘stuff’.
You can also try to source your own label version of the product, which may throw
a spanner in your competitor’s works…
Either approach can be valid – or use all of them together.
A relentless ‘price cutting competitor’ doesn’t have to be the end of your market – although you may need a bit more savvy to maintain your margins.
DUN DUN DAH.. Stuntman time..
“Whilst running through Tescos wearing nothing but a rosette pinned to my bow-tie stating 10% off everything at Asda, i have to then to outrun the police chasing me in a riot van with big sticks and rather large looking dogs with even bigger sticks wanting to lock their jaws on me, as i sing “When Irish eyes are Smiling passing an a mean looking irishman whos just had his wife tell him shes leaving him for a crash test dummy”!
I`ll survive no messing..
URMMMM!!!
WEY HEY, don`t miss my next escape route through the annals of my mind when i will be looking at the new Software that simply blows the socks of hardwork when it comes to article marketing so stay more tuned than Doris with a pound of peanuts and a Mel Gibson movie!
BUT for now you luvly peeps you tis TTFN….Ed.
MY Ed WeBBers ARE PRICELESS!
Ed
Mandy Allen
Barry Wells
Kathy Dobson
Rob Corrigan
John McNally
Steve
Jacinta Dean
George Nieves
Barry
Susan Owen-Thursf...
Cragar
Ann Martinez
Ann O Leary
JohnB
Hi Ed, Hey Doris
I’m sure this happens all time online. Is it the same thing when you have resell rights on a product and they put a notice on saying “do not sell for less than $27 for example. Is this the same kind of thing?
Not sure about peanuts
cheers
Steve
Hi Steve,
Its only the same if two or more people agree on a price point for the same product in the same market so they don`t compete with each other, they more or less take an equal share of buyers and in turn profits!
So basicially its an arrangement between sellers to control that marketplace on price, but its illegal because it can affect non complient sellers sales not in the agreement in that same market and usually it`s unannounced !
Cheers for your comment Steve….Ed.
Good advice Ed. I wouldn’t compete with anyone else soley on price. I prefer to offer high quality to my customers, and this invevitably suffers when the focus is on price.
John
Hi John,
Yeh i agree, too many people do this and stop thinking about what the customer wants!
TTFN…Ed.
Some interesting thoughts there, John. I had never thought of price fixing in relation to internet products and even less in relation to how I might price what I sell. Something to remember.
regards
Harriet
Hi Harriet,
To be honset, it can be hard to spot online however it does go on quite frequent in offline businesses!
Take care ….Ed.
Ed
A thought provoking article which highlights some issues that have been around in the offline world for some time.
As you say the key is to offer ‘added value’ so that your product, regardless of its price position, is the best overall offer in the marketplace.
I think its something that will creep into online sales, certainly in terms of resale rights products.
Speak soon
Tom