Supreme Court Pricing Decision - Effect on Online Sellers

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AuctionBytes Blog
News and insight focusing on
ecommerce and the online auction industry
by Ina Steiner, Editor of AuctionBytes.com

July 02, 2007

Supreme Court Pricing Decision - Effect on Online Sellers

By: Ina Steiner

Mon July 2 2007 02:23:46

The Supreme Court ruled last week that in some cases, manufacturers have the right to force retailers to minimum retail prices (price floors). Retailers have expressed concern that the ruling may make it more difficult for them, and discount retailers and online sellers may be impacted the hardest.
See full story here.

Some believe it will be harder for online sellers to acquire overstock/liquidation items from local businesses, a source of inventory for many. Let us know if you think the decision will hurt online sellers, and how.

Comments (8) | Permalink

Readers Comments

Supreme Court Pricing Decision - Effect on Online Sellers

by: Randy Smythe

Mon Jul 2 11:40:41 2007

This will affect eBay sellers who sell new product purchased directly for Manufacturers or Distributors but the surplus and liquidation business should thrive because unsold product in the primary channel has to go somewhere. Manufacturers aren't going to take it back.

I think marketplace dynamics will win out here.

Supreme Court Pricing Decision - Effect on Online Sellers

by: angelat

Mon Jul 2 16:20:57 2007

I think the whole country has gone insane. That's not a free market, by any reach.

Supreme Court Pricing Decision - Effect on Online Sellers

by: BreckLundin

Mon Jul 2 17:04:06 2007

My concern is beyond price fixing but why is the Supreme Court of our nation ruling on what is a contract matter? The purpose of the Supreme Court is to decide issues in relation to the US Constitution not in what amounts to a civil matter.

I guess because the Sherman Act was used as an argument that makes it a Supreme Court matter. Or maybe because the Supreme Court Justices are looking to further pad their portfolio as well as strengthen the control corporations have over our daily lives.

There was a time, not long ago when someone bought an item then had the right to do whatever they saw fit. Well, no according to the USSC we no longer own what we buy?

Again I see no reason this should ever have made it to the SC...if a company wishes to control distribution, fine, I can find another product. But to explicitly give them this level of influence is just beyond belief.

BTW, look at the bottles of generic meds you bought at your drug store...I will pretty much guarantee you the medication itself was produced in China but bottled over here...read the bottles, er, bags of peeled garlic at the grocery store...produced by slave labor in china (there is still one brand produced in Gilroy, CA though)...feel safer? eh, not so much I think.

Where is the SC for those issues?

Anyway, I look to see eBay start to come and BEG us sellers of antiques & collectibles again...suddenly we are looking mighty important...again.

Supreme Court Pricing Decision - Effect on Online Sellers

by: Jared Ross

Mon Jul 2 17:25:06 2007

I don't think the Supreme Court Ruling will make much of an impact. The major problem I face as a small online retailer is competition from non-authorized retailers. While manufacturers tend to do a good faith job enforcing Minimum Advertised Price (MAP) there only recourse is cut off the supply. However, if the retailer is getting the supply from a non-traditional channel such as overstock, going-out-of-business, or grey market, there is little the manufacturer can do. Manufactures are not willing to dishonor warranties for products purchased through non-authorized retailers because it casts the manufacture in a bad light, not the retailer who gave the consumer a great deal.

Supreme Court Pricing Decision - Effect on Online Sellers

by: BreckLundin

Tue Jul 3 00:57:53 2007

Jared:

I do not think you see the whole picture. eBay would likely roll over and pull any listings requested by an Mfg if that item is subject to pricing controls. Vero is a stoopidly powerful program. Now there is a USSC ruling to support this restraint of free trade.

It is gonna be a MESS in the lower courts and bankrupt many small sellers who may, in good faith, invest in a product they thought was a good deal only to find there is a HUGE cement wall preventing them from selling that item online, period.

This will also affect Amazon sellers, etc...

Supreme Court Pricing Decision - Effect on Online Sellers

by: erbs4u

Tue Jul 3 08:10:05 2007

Finally something is being done to control ebay, Sellers will soon see better relations between ebay and themselves. Ebay will even start listening to the sellers when the sellers numbers is reduced.

Won't be right away, but think when ebay has to start cutting auctions to conform, they are losing their income and so will give the sellers better incentives to sell, such as even lowering the listing fees and final value fees.

Supreme Court Pricing Decision - Effect on Online Sellers

by: Carl Buchanan

Tue Jul 3 13:17:49 2007

A manufacturer enforces price supports but not selling to retailers who choose to not follow their price guidelines. This will not stop retailers from dumping unsold products to liquidators out the back door.

Supreme Court Pricing Decision - Effect on Online Sellers

by: Frank Ross

Sat Jul 7 17:03:22 2007

On a practical level, the SC only confirmed what many Manufacturers are already doing and have been doing for some time. MAP and MRP pricing is commonplace and something you see all the time in wholesale markets. Some Manu's put up with eBay, some don't. If anything, this decision supports the fixed pricing model. That aside, it's not good business to be competing on price alone.

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