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Mon Feb 19, 2007 5:35 am  |
| snowstar wrote: |
| what does "resale price maintenance" mean? isn't it legal for the manufacturer to have a retail price and not allow any discounts? |
Manufacturers (in Australia at the least) have what's called RRP (recommended retail price). That is they can recommend to the resellers of the market value of their products.
But once the retailers buy the goods then they own the goods. And how retailers market the goods shouldn't and can't be controlled by the manufacturers.
Resale price maintenance just means price fixing and Jurlique did this by pressure, witholding/delaying stocks already paid for and threatening to close down accounts. Jurlique doesn't sell on consignment basis to retailers, at least to the small retailers. So if you're a small retailer and you've paid $x amount of dollars in stocks but the stocks fail to arrive then you'd be losing money because you have nothing to sell and in addition to that you'd still be losing more money on overheads that the sale of stocks would have covered. Not to mention the interest foregone on the money that was used to pay for the stocks. And when the manufacturer still finds ways of delaying or withholding stocks then you'd either cave in to the pressure or close the account and sell something else.
I can only imagine the time and money spent on, not just the logistics, but the staff training and restocking of shelves will have quite an impact on the business. So you can see why it would be an unfair practice by Jurlique especially if they don't provide any means of support to their retailers to help them promote and sell the product. |
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