Minimum Price – The Complications
“The minimum price was quite obscure in the past but with the arena of online retailing having become popular manufacturers have begun to think seriously about minimum price plans. ”
Many a time there is a discord between producers and sellers as regarding the price fixation. Such is the level of this disagreement that the producers are only able to decide upon a retail price.
The minimum price was quite obscure in the past but with the arena of online retailing having become popular manufacturers have begun to think seriously about minimum price plans.
Actually, when the products are sold online the operating costs are reduced quite a lot. The producers therefore take resort to minimum price policies because they do not want the online vendors to weaken the traditional retailers of their products.
But this thing is not often palatable to online retailers who cry of a conspiracy against them. They also say that in market competition such restrictive minimum price policies should not be adhered to.
Moreover, online retailers also complain of the ambiguity and unfair practices that are followed by certain deceitful retailers. These dishonest retailers sell products even below the minimum fixed price and thus are able to lure more customers. Underdeveloped cyber laws and the indistinctness involved in online buying often go in their favor.
Certain retailers who sell below the decided minimum price claim (even publicly) that they have not broken any law. Actually, certain incentives and reductions that were not meant for the public previously are given by these online retailers. So, technically they do not reduce the minimum price but are able to get a competitive advantage.
Retailers who are new to the trade or are afraid of such knacks or simply don’t want to indulge in them suffer considerable losses. It’s the duty of the producers to ensure fair sale of their products when they have decided the minimum price.
But, as goes human nature, the manufacturers are not much concerned about these anomalies as what matters most to them is their profit. They are in the win-win position as their products are sold all the more.
The need of the hour is adherence to a strict code of conduct by the manufactures that prohibits them from dealing with those persons who sell below the minimum decided price.
Author - DeeKay
Tags - Finance, Economy
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