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We're getting way off the subject of MAP. But, all our lifestyles will change in a hurry when (not if) nobody in the world wants our printing press dollars anymore......Max

To attempt to get back on topic.........why is MAP less than MSRP? What's the difference???????????

So far I have not seen anyone talk about "Resale cert" for there state. Might this be that "Contrators" don't use them? Thus relying on a "Contractors discount" only? If so then your short sheeting yourself.

COGS------------MAP---MSRP

Notice there is a wider gap from COGS to MAP. Also can I ask why then when having a resale cert that some folks only give you the contrator rate and not a wholesale rate.........sorry there not the same, at least with whom I deal with. Which tells me some folks are wholesaling from a MAP price.........thus no margin.

For examples pm me......

Everyone is looking at this issue from a contractor or retailer point of view. Let's look at from the manufacturer view point. A manufacturer wants to sell all product that can be manufactured at the most money possible at the lowest cost. So the idea situation for a manufacturer would be to sell all the product that he can make directly to the end consumer. In years past the only way this could be done was for the manufacturer to setup retail stores to cover all areas in their market area. This may not make sense due to cost and this is why the distributor and retail grid evolved. So ADI did next best thing. They built a customer base of contractors and bypassed most of the chain. Keeping the contractor base and increasing it to increase sales was expensive. ADI decided that they could keep their current contractors by selling to distributors only and would pickup new contractors that the distributor already had. So why didn't this work? Distributors don't care what product they sell but they do care about how much money they can make on the products they sell and that their customers will want the products that they are selling. They are trying to get new costumers by taking them from other distributors and not bring new people to the industry because that cost more money. ADI tried to keep their distributors from selling other manufacturers product. Distributors don't want to put all their eggs in one basket so they usually carry more than one product line to attract a larger customer base. Distributors don't want to have have a large inventory so if they run out of one product they will try to sell their customer another manufacturer's product or the customer will have to wait. Then without that personnel touch ADI lost some of the loyalty that the contractors had with them. Also distributors can set what ever price and discount they want so in some cases contractors had to pay more which is the best way to loose a customer. I have addressed the issue in very general terms here because I didn't want to write a book. But the short and simple of this is the manufacturer doesn't care how much money you make as long as they can sell all the product that they can make. Yes they don't want to put you out of business unless the person that puts you out business is going to buy more then you did. So why is there MAP at all? What the manufacturer could see happening was that the industry would end up with a very few very large distributors that would give these distributors too much power over the manufacturer. Then you throw the internet into the mix and now consumers could go anywhere in the country to buy things easily. Manufacturers can't set the end price for a product by law so they had to come up with a way to try and keep some of the smaller players in business. This was the mind set behind MAP. Is MAP a good or bad thing? That depends on how you look at it. Then the question is there a better system.
Mike

Et All,

It happened WAY back in the NIXON, I am NOT a Crook era...

When Nixon did away with the gold-silver backed dollar- one was to burn the Hunt Bros outta TX but also tie oil to the dollar.

The deal way you had to buy oil with US currency and then there was the thought thatgas would be 19 cents a gallon.

By the way Nixon also figured how to make money on health care HMOs...they will NEVER cure any diease because you can't make money on cures only control.

ttfn

Dragon

I'm going to resurrect this thread, just because...........

MAP vs MSRP vs Contractor vs Dealer vs Distributor vs Stocking Distributor.

No price structure will work unless the MFG installs professionalism in their Distributors. Sh*T runs down hill and the MFG is at the bottom.

YOU MUST install the trust of good distributors who will follow the pricing set forth by you. Currently, IMHO MFG just care about getting their product out and collecting the check. If MFG are selling directly to the end consumer they are cutting us all out. Does Ford sell directly to the end consumer? Does GE?

Does your distributor know how to size a pump? A filtration system?

What standards do you have in place when selling your product to a contractor? Do you make sure that he is in the business? Or just has a business license for any occupation?

Where are all the Mom & Pop shops going? How many pond stores are in your area now? How many where there 5 years ago? How many have come and gone?

What do we need to do to make sure that our industry stays in business?

Hmmmm.....there are lots of sides to this thorny item.

If I were going to start a new company manufacturing pond kits or pumps, I would get the best web site I could afford and sell directly to whomever....for that is how the trend is going....and it is speeding up. With hand held web surfing, it will get more so.

That does not mean I'd try to sell at cost.....everyone has to make a profit.......unless they are a rich philanthropist!

Aquascape got away from direct sales.....EasyPro went to direct sales. Who knows, I suspect Aquascapes market share will
continue to decline.

Good marketing is better for profits than good products, by the way. (Remember Aquascape vs Pondsweep?)

Unless a bricks and mortar location has a product nobody else has, they are always going to be at a disadvantage when it comes to price, so they have to figure out "service" or some other niche to make that model work.

Max Phelps

Ok, I did some net surfing today in the rain. LOL.

I found violations of map on several products on several websites. The only products I could really check on are the ones in which I knew what the MAP price should have been.

Violations for the following products were found

EasyPro Pond Products
Atlantic Watergardens
Emperor Aquatic
Shinmaywa


Some were so bold as to put their prices $.02 lower than MAP to $1.00 below MAP.

Interesting findings.

Do you think any Dist or Mfg is going to look at ALL the websites that host there product? Think not........Do they care? Think not........

They just sold $10,000 worth of product to "Joe" blow Koi dealer thats his problem if he can't/don't make money......they got there's. If something cost you $75......MSRP is $100 and MAP is 20% off of MSRP, so someone sells it for $79.00.....guess there thought is sell it for $78.00, which means you sell more right? So you will be back for another $10,000...right? Which means they got there's again...right?

Roflmao..........one Dist suggested this:
Oh don't forget to list that item with free shipping that will boost your sales!

Here is one more sales pitch:



The internet isn't it great! I love it when I can get a better price on an item @ "retail" then I can from my Dist @ wholesale.....This is a true story, was able to buy(Ebay)a W.Lim pump 10.00 cheaper then my wholesale price.....drum roll......and free shipping and out of state so no sales tax!

Whats wrong with this picture?

Gloria,
Just for the heck of it I googled ShinMaywa pumps and looked at the first 10 sites that came up selling the 3300 gph pump. I compared the price there to MAP on this pump of $245.00. I found that half the sites were about MAP and one site above MSRP. But I also found that half the sites were below MAP. Three of the sites were less then $1.50 lower then MAP but the lowest site was 10.6% lower then MAP and the other was just a little higher then this one. But I can't expect a manufacturer to go looking for people breaking MAP. I am not sure of what a manufacturer can do about MAP. Yes MAP can be made the same as MSRP. But that would only work if all manufacturers did the same and if they did then I would guess that that could be considered price fixing.

Mike and everyone else that is interested, this is the results of my findings today.

Atlantic Water Gardens had 5 sites violating MAP. Three of the websites violated other manufacturer's MAP pricing also.

Emperor Aquatics only found one website that violated MAP.

Fielding Pump/Shinmaywa found 11 websites in violation with one site violating other manufacturer's MAP pricing.

Easy Pro Pond Products found 5 sites with one site violating other manufacturer's MAP pricing.

I have made PDF files of webpages that show the pricing that is below MAP. I have gone back and highlited each of the violated prices along with the website where I found the violation.

I know it is way to hard for the manufacturer to visit each and every website looking for violations however when they are brought to their attention, I EXPECT them to handle the situation in a professional manner. Many of these violators are under MAP by less than a DOLLAR. But if you sent MAP at $245.00 you can not allow $244.98 to be advertised.

I will keep looking for violators and would appreciate it if you find one to email me the link and I will add it to my stack of violators.

Gee...might it be to hard to just get rid of MAP? It just creats a bidding war among the retailers........internet surfer's and buyer's can/will use that as a tool to keep getting cheaper.

Thus creating this type of ad hype:

110% low price guarantee on every item!
"We have the lowest prices guaranteed"
If you find our item at a lower price on another retail site, we will refund 110% of the difference between our price and the lower one.

And if every retailer would post MSRP and stick to it then it would come down to:

Dealer closest
customer service

As everyone would be the same cost any where in the system...not just the cheapest. The only thing MAP works for or helps our the MFG....whats in it for us.

But guess to simple

I don't do much at all in retail/internet sales. But we all run into the low ball price guys in the construction side as well. While there is no MAP in that and price fixing is illegal, I still ask my competition outright what they are charging for different ponds, waterfalls etc. And I tell them up front that if they are charging more, I want to be sure that I am making every bit as much as they are on a job. And if cheaper, they need to stop leaving $$ on the table. We all need more business right now, and the customers are trying to tell us what they are supposed to pay.

I have walked away from one pool installation and one pond this year because they wanted it much cheaper than I was willing to do it for. I don't know if they got someone else or not... but we all have to look at EXPOSURE. For every pond/pool/waterfall we install or do repair on, we OWN that item for a good while. And our reputation owns it even longer.

A fellow by the name of Ewing in Charlotte, NC told me in 1982 when I entered the pool business, "Max, if you don't charge properly for what you do, you will work yourself to death and go broke. Or you can go broke sitting at home drinking coca-cola, watching TV and it is a lot more comfortable."

Scenario... pond 'A' should sell for $10K plus or minus. You can sell it for $8K with a $3K profit or $10K with a $5K profit:

10 ponds at $3K profit = $30,000
5 ponds at $5K profit = $25,000 PLUS some good leisure time worth a heck of a lot more than $5K. No rushing jobs to get to the other one... time be sure all i's are dotted and t's crossed. Also 5 less ponds for call backs, etc.

If you sell it for $8,000- you have taken 20% off the retail price... But you have taken 40% out of your profits. This is if you use a 50% margin. If your margins are running at 40%, then you discount your pond by 20%, you have just reduced your profit by a full 50%.

One more thing I am not sure of... is there a difference between a full 50% and a regular 50%? Something to think about.

Mark,
The problem Mark is there is a big flaw in your logic. If some will not follow MAP then what makes think that they will follow MSRP. The problem is we all shop for the lowest price to some degree. Before the internet we would either drive or call stores to get the lowest price. What we would find is that the prices would be fairly close because we were dealing with brick and mortar stores that all had overheads that were close. Now comes the internet and with a few clicks of the mouse we can shop the world. This has allowed dealers into the market that don't have stores or the overhead and allows them to sell it cheaper. Also these dealers don't have the name as known stores so they end up trying to buy business with price.

I like the way you're talking here Texas Max. Recently I was bidding on a job not a mile from my home and I really wanted the project. Heck who am I kidding, I really needed the project. I was informed by the homeowner I was bidding against two of my competitors, the home was going to be featured in an architectural magazine, the economy is rough and he needed a good price blah, blah, blah.

As I said, I really wanted (needed) the job, but outside of that, this project was in my BACKYARD so my pride really wanted this project too. I gave a bid that was much too low, to the point it hurt to even breath it across my lips during my second meeting with the homeowner. THANKFULLY, he tells me, "WOW that is so much more expensive than your competitors, are you sure you can't do it for cheaper?"

I picked up my pride and went home with a 6 pack of coke to watch tv..............

Of course those of you who know me, I didn't go home to watch TV & I DON'T drink Coke The fact of the matter is; I'm so thankful I was not awarded that job for what I ridiculously quoted. And to think someone else did it much cheaper.

This is a bit off of the MAP topic but not to far. As a contractor myself, I don't believe the violation of MAP is hurting the contractors as bad as you're making it out to be. The contractors make much of their profits off labor.

Small distributors that can't ante up with big $ orders to acquire bigger buying discounts suffer and the retailer is the one suffering the most. If you are 100% retail you are in big trouble. In fact I can't think of a 100% retail pond shop that is still alive today.

If you are a Retailer fighting the internet pricing I wouldn't hold your breath for the MAP Police to rescue your business. You will have to take different steps to keep your lights on in the building.

To have a psychical brick and mortar pond specialty location you will need to combine as many of these items as possible to survive. Retail, wholesale, distribution, manufacturer, contractor, internet sales.

Retail, wholesale, internet
Manufacturer, distributor, Retail
Retail, Wholesale, Contractor

Think about it, make a choice and most importantly move on it quickly!

God Speed,

The Pond Digger