Legal Attack on MSRP - Impact on Hikvision, Sony, Pelco, More

I am amazed that we are just getting around to this conversation in 2016!

These exact examples are what Axis has based their pricing on for ...well, ever...and yet everyone says they cannot make any money selling Axis v. everyone else...( I did notice they were not really mentioned in the article)

While this is true to a small extent, the over-inflated MSRP's of many others are never reached and lead people to falsely believe they are getting a better chance to make money.

Now, after all that I will add the disclaimer that I am not an Axis employee or proponent ( used to be but now I'm agnostic)...I just thought I would point this out because many have bad -mouthed Axis for years for their stubbornness to keep MSRP low or maybe just to keep perceived margins low???

It is important to note that Sony puts forth alot of effort to protect their MAP Policy

Map Policy

If you find a company advertising pricing online lower than Sony's MSRP, you will most likely find them on the Sony's Prohibited Account List (Sony Prohibited Accounts )

If company x is advertising pricing online lower than Sony MSRP, and you dont see them on the prohibted account list, you should let your Sony Account Manager know.

Brian, this is a good topic and a good article. The pricing issue has long been a point of frustration for integrators and end users.

Your article prompts me to make some more general comments about IPVM, perhaps out of place in this comment section, but I don't know where else to make them.

Web data is what is empowering customers these days, and user generated content (i.e. from customers) is what is injecting transparency into the picture for many business sectors.

Although there is a lot of inaccurate or grossly bad user generated content out there on the web, online price searches do tap into real transaction data. And user communities of various kinds (like IPVM) have intrinsic truth filters that keep their member generated data consistent with reality.

IPVM provides insight into "the real IP security industry". Your comparative articles on product performance are a godsend. The "specs vs. reality" data has long been an industry need, and its lack has been a frustration point for integrators and end users.

As a platform for the sharing of integrator experience and opinion, IPVM provides another empowering element that, in this information age, has long been overdue.

IPVM also provides a level of active scrutiny that manufacturers haven't been prepared for, but which in other industries has long been an industry journal tradition.

Sorry for the slightly-off-topic outburst, but your article made me do it.

One thing that is left off in this conversation that I think affects this market is the problem many products showing a price online aren't what they seem. You see a price online for a product that appears to be the same but not quite. Hikvision is probably the best example for this. You can regularly see "Hikvision" products listed on Amazon for much lower than you can buy true US versions through a distributor, yet those products don't come with Hikvision warranties, are white labeled, or have modified firmware on Chinese cameras. This of course just causes more confusion to the end consumer. For that matter, the integrator when trying to understand the reason he has to pay more to go through a distributor than if he just purchased it through a site like Amazon.

I think the biggest thing that has to be changed and marketed is the value provided by integrators knowledge of the products, on site support, warranties by manufactures, etc. Many consumers are starting to understand this value after purchasing something online then getting burned when the item fails or they need support.

Secondly, to allow integrators to compete more, the whole manufacture, distributor model needs to change and become much more streamlined and efficient. in other words, cheaper. The whole process has become very bloated and as margins continue to dip, the integrator is the one that is squeezed the hardest.

I am not sure I agree with the tenor of some of the comments compared to the actual facts of the suits mentioned. In the Michael Kors lawsuit, Kors and Company actually made up "Suggested List Prices". They did not use the MSRP offered by the manufacturer (assuming there was one).

Some of this is being blamed on what is referred to as private labeling. That is laughable to me. If you won't pay the extra 10 percent for the real McCoy it is your own fault. Value is more often than not perceived. Most of the time, you get exactly what you pay for.

While being admonished by the court and strongly urged to be more transparent, it is noteworthy that the suit against Amazon was dismissed (someone had already agreed to binding arbitration). They took their chances and lost, then when the outcome was not to their liking, they filed suit anyway. Sorry, it does not work that way. Binding means just that.

In reading the actual details of most of these suits, these retailers are using the phrase "list price" as opposed to "MSRP". There is a distinct legal difference in my opinion. Manufacturers are and should be allowed to set their retail prices at any level they want. My opinion only, but if the ads read "MSRP", the lawsuits would have no merit - at all. The market will determine the actual selling price anyway. It always has. Everyone acts so shocked and surprised to find out that MSRP is often not the price that is paid - news flash, more often than not, it never has been. Millions of cars have been sold at auto dealerships for decades whilst haggling over the price or what will or won't be included. (i.e. I will pay that price for that refrigerator only if you can deliver it today).

There is not a shred of argument in any of this reading that manufacturers are to blame. It is the resellers or retailers that are conducting the monkey business, and amazingly enough, the bulk of the complaints are against on-line retailers; the very godsends that are supposed to be leveling the playing field for everyone!!

Is it me or is our society moving away from the concept of salesmanship? I sometimes get the feeling reading some of the remarks that many will only be satisfied if/when items are uniformly priced across the board, and that price has to be honored no matter the market. That is a completely unreasonable expectation on its face for like a zillion reasons and it is certainly not the capitalism I studied in school.

I don't run an online business yet. But I can tell you that we, not the manufacturer, warranty our products. We warranty our labor. We service our equipment and we keep inventory on the shelves to minimize customer downtime. Uptime is not a marketing statement here. We actually do that. If a product fails in the field, we have to go out, install loaner equipment or new equipment depending upon the warranty period. THEN we may or may not ship it to the manufacturer for repair. We also pay for the shipping back and forth, the handling, the record keeping and so on. The on-line folks, with all due respect (and accurately pointed out at least in this forum), don't do any of that.

If the customer does not care about any of that, there is a market for him. God Bless him/her. Go buy it online. But please stop complaining about the way I do business. No one forces you into my door. We may be offering some of the same things as an online retailer but the fact is that my business model is actually very different than theirs. And yes, do not buy it from an online source and complain when I won't install it for you on the cheap because you realized you can't.

I have to say I don't agree with the bulk of what I have read by the Times article. Long before the internet, my father used to shop for groceries. He would buy meat at one place, canned goods at another and so on. I would sometimes kid him about it. "You are wasting gas driving all over town to save 20 cents." That became much more relevant when gas prices topped a dollar a gallon. But the point is a great many people shopped that way (and some still do). They did their homework and did not call their lawyers when the local A & P or Sears store charged more than a competitor. Many of these lawsuits seem to be just another example of people complaining because they did not do their homework or sometimes they just jump on the bandwagon of yet another class-action payday (for the lawyers or course).

I see a conflict with this ruling under The Sherman Antitrust Act. It is illegal for a Manufacturer to dictate the sales price to a Distributor or a re-seller.

In 1911, the United States Supreme Court declared that an agreement between a manufacturer and its distributor on the prices to be charged by the distributor – known as resale price maintenance or vertical price-fixing – was automatically unlawful under the antitrust laws.

The only thing a Manufacturer is able to do is to have a Minimum Advertised Price Policy. For those that sell through Distributors chasing down violators is almost a full time job.

Mark,

Well stated. It's all about perceived value. If a customer does not see value in what I have to offer, at the price I am offering it for, then they won't buy from me, if they do, then they will. Plain and simple. If they choose to pay more because they see value in the added services I offer, it does not make them a "sucker" or me an unethical businessman. It is personal preference, and I am catering to their need. Granted, the market will fluctuate, and the quantity of end users who value what I have to offer may shrink, but as long as there are some out there, and there always will be, and I can find them, and it's a enough to pay my bills and make a profit, I will be in business and my customers will be satisfied. I think too often on this forum we assume all end users have the same needs and only value cost.

Update from NY Times: Amazon is Quietly Eliminating List Prices. The Times shows a number of examples of changes, however there is no confirmation from Amazon that this is being done universally.

That said, if Amazon continues with removing list prices, it could be a sign of further pressure on misusing extraordinarily high MSRPs as a sales tactic.

It is my understanding that a manufacturer can not dictate the price that a re-seller sells it's product. They can only enforce a MAP policy. In the Michael Kor's case did the fact that they have their own stores, and sell direct to the end-user, have any effect on this ruling?