Manufacturers Attack Discount Sellers with Cubicle-Dwelling Enforcers

The Wall Street Journal investigated the mafia-like tactics of major electronics manufacturers in maintaining higher pricing. Makers like Panasonic, Samsung, and Klipsch hire offices of internet tough guys to track down discount sellers and punish those filthy capitalists for sullying their brand perception with affordable prices.

Manufacturers typically set a minimum advertised price, or MAP, that they require authorized sellers to maintain. But online retailers, including Buy.com and even poor, beleaguered CircuitCity.com, often sell products at a discount, and manufacturers believe that steep discounting hurts their brand integrity. These upset gadgetmakers have begun hiring enforcement agencies, like Phoenix’s NetEnforcers, to scour the internet for cheap deals and tattle on authorized dealers. Retribution is usually just a warning letter in this case, asking the seller to bring the prices up to the MAP with the veiled threat that lifting the price is important to maintaining a good relationship. Occasionally, an authorized seller in violation of an MAP will have their contract yanked, stopping them from selling that manufacturer’s goods.

See the original article at Gizmodo

Related posts: