MAP Pricing and the Skate Industry

A hot topic at the recent BRA/IASC Roundtables at Surf Expo and ASR has been talk of a MAP or MSRP pricing strategy where online retailers are curbed from undercutting product price at the brick and mortar level. In other words, there would be a minimum advertised price online that all retailers would have to abide by. Back on February 7th, the New York Times posted an article on this very subject. http://www.nytimes.com/2010/02/08/technology/internet/08price.html The article references a 2007 Supreme Court ruling in which manufacturers were given considerable leeway in setting advertised pricing. Of course there is always the issue of enforcement and despite efforts to control pricing, there are always ways to cheat the system. Websites often replace prices with notes that say things like β€œTo see our price, add this item to your cart.” Most telling in the article was the sentence stating that “the competitiveness of the Internet has unlocked a race to the bottom β€” with everyone from large corporations to garage-based sellers ravenously discounting products, and even selling them at a loss, in an effort to capture market share and attention from search engines and comparison shopping...

Retailers Are Sending Unsold Merchandise Overseas

Could this work for specialty action sport retailers? Many retailers are going to be stuck with unwanted inventory at the end of the year and with MAP pricing and other regulations, it is hard to dump that product even on sale. Traditionally, retailers look to secondary channels such as closeout sellers, liquidators and discounters to unclog their inventory pipeline but what about looking overseas where retailers aren’t under contractual pricing obligations? The cost of these overseas deals tends to be higher for retailers, but what constitutes higher when the alternative is to sit on unwanted merchandise? If it’s a purely cash deal, then a U.S. liquidator would typically pay a wholesale price of 25 cents to the $1 for overstocked goods. But if the goods are being purchased by an foreign liquidator, then retailers often have to pay the shipping costs. However, at this point, industry experts said most merchants will incur these additional costs instead of sitting on leftovers especially when many products become obsolete after a year. Retailers also need the cash by year-end because they have to pay their suppliers and creditors for next season’s...