Garmin Price Fixing Post from other newsgroup

[TripodBill]

Subject: Re: Garmin too big for their britches? (Fixed Pricing)
From: (TripodBill)
Date: 7/14/2004 12:09 AM Central Standard Time
Message-id: >

Many readers appropriately picked up on one of the most important issues in my
earlier post: Minimum Retail Price Policy (i.e., controls). For those that are
still interested in the subject and are of the "pilot persuasion" here's an
update of what you can expect at the Oshkosh show this year. You may recall
from my previous post that I relayed information from a friend RE: Garmin's new
price policy on the GPSMAP 296 at SunNFun. Well, if you are headed to EAA's
Oshkosh show this year, there is good and bad news. Good news: The older GPSMAP
196 will be cheaper this year at about $795. More Good news: There will be new
low-end handhelds in B&W and color to replace the aging GPS III Pilot and
GPSMAP 295. The new handhelds will both be in the GPSMAP 76 form factor. (Not
sure if that's a great design for yoke mounting, but I'll leave that to pilots
to decide.) Bad news? ALL MODELS will now be under the Minimum Retail Price
Policy, meaning no dealer at the show will be competing with another dealer.
Buy from whoever you like, 'cause they can't sell it to you any cheaper. Any
dealer that screws up and offers free shipping, a package deal, or discounted
accessory will be canceled by Garmin. Garmin has now fixed prices on all their
aviation products. It will be just a matter of time before they do the same in
the automotive, outdoor and marine product lines. Happy shopping!

-Bill

(for more info, see sci.geo.satellite-nav newsgroup)

[GaryP]

(TripodBill) wrote in message >...
> Subject: Re: Garmin too big for their britches? (Fixed Pricing)
> From: (TripodBill)
> Date: 7/14/2004 12:09 AM Central Standard Time
> Message-id: >
>
> Many readers appropriately picked up on one of the most important issues in my
> earlier post: Minimum Retail Price Policy (i.e., controls). For those that are
[snip]
> accessory will be canceled by Garmin. Garmin has now fixed prices on all their
> aviation products. It will be just a matter of time before they do the same in
> the automotive, outdoor and marine product lines. Happy shopping!
>
> -Bill
>
> (for more info, see sci.geo.satellite-nav newsgroup)

"He who builds a better mouse trap...." This is the basis of our free
enterprise system. If you don't like it then don't buy Garmin. Right
now they (Garmin) are enjoying the fruit of having the right products
at the right time and clearly there are many people willing (key word
here) to pay Garmin's price for them. I certainly don't like the
lack of competative choice for a GNS430 or GPSMap 296 but there is
nothing that you or I can do other than spend our money elsewhere.

I had hope when UPS Technologies released their GNX80 that it would spur
a round of competative price reductions in the Garmin line. However
Garmin quickly eliminated that threat and bought UPS Technologies.


GaryP

[Jay]

Didn't the CD manufacturers get into hot water for setting what
amounted to a Minimum Retail Price Policy? I seem to remember getting
a class action check for some pitiful amount of money as a result of
that. As I remember they were convicted of giving advertising money
to retailers that agreed to the fixed minimum price.

I don't understand why Garmin would want to do this though. Maybe
somebody more familiar with anti-trust issues can give the economic
reason for these types of arrangements. I'd think they would want the
money collected by the distributers to approach zero (from
competition), leaving the potential of higher wholesale prices for
them.


(GaryP) wrote in message >...
> (TripodBill) wrote in message >...
> > Subject: Re: Garmin too big for their britches? (Fixed Pricing)
> > From: (TripodBill)
> > Date: 7/14/2004 12:09 AM Central Standard Time
> > Message-id: >
> >
> > Many readers appropriately picked up on one of the most important issues in my
> > earlier post: Minimum Retail Price Policy (i.e., controls). For those that are
> [snip]
> > accessory will be canceled by Garmin. Garmin has now fixed prices on all their
> > aviation products. It will be just a matter of time before they do the same in
> > the automotive, outdoor and marine product lines. Happy shopping!
> >
> > -Bill
> >
> > (for more info, see sci.geo.satellite-nav newsgroup)
>
> "He who builds a better mouse trap...." This is the basis of our free
> enterprise system. If you don't like it then don't buy Garmin. Right
> now they (Garmin) are enjoying the fruit of having the right products
> at the right time and clearly there are many people willing (key word
> here) to pay Garmin's price for them. I certainly don't like the
> lack of competative choice for a GNS430 or GPSMap 296 but there is
> nothing that you or I can do other than spend our money elsewhere.
>
> I had hope when UPS Technologies released their GNX80 that it would spur
> a round of competative price reductions in the Garmin line. However
> Garmin quickly eliminated that threat and bought UPS Technologies.
>
>
> GaryP

[GaryP]

(Jay) wrote in message >...
> Didn't the CD manufacturers get into hot water for setting what
> amounted to a Minimum Retail Price Policy?

When an entire industry fixes prices that is illegal. But we are
talking about 1 manufacturer setting prices, their prices.
I am sorry but there is nothing wrong with that. Now if Garmin,
Bendix King, Lowrance and whomever all met in a smoke filled room
and set minimum prices for all GPS equipment that would be a different
story.

The notion of filing a class action law suit against Garmin for
establishing a minimum retail price on their products is silly.
No one forces a shop to sell Garmin. A shop chooses to do so willingly
and in order to become an authorized retailer agrees to Garmin's
retail policies. But it is still only Garmin setting prices on Garmin
products. Now Garmin can increase prices up until they exclude enough
of the market to cause a drop in overall sales and therefore loose
profits. Still their choice! Right now there are enough people
willing to buy Garmin products at Garmin's current retail prices to
keep there production line busy. Until another company comes along
with as good of a product or better to challenge Garmin it is not
going to change. Garmin is in the business to make money not friends.

Gary P

[jls]

"GaryP" > wrote in message
om...
> (Jay) wrote in message
>...
> > Didn't the CD manufacturers get into hot water for setting what
> > amounted to a Minimum Retail Price Policy?
>
> When an entire industry fixes prices that is illegal. But we are
> talking about 1 manufacturer setting prices, their prices.
> I am sorry but there is nothing wrong with that. Now if Garmin,
> Bendix King, Lowrance and whomever all met in a smoke filled room
> and set minimum prices for all GPS equipment that would be a different
> story.
>
> The notion of filing a class action law suit against Garmin for
> establishing a minimum retail price on their products is silly.
> No one forces a shop to sell Garmin. A shop chooses to do so willingly
> and in order to become an authorized retailer agrees to Garmin's
> retail policies. But it is still only Garmin setting prices on Garmin
> products. Now Garmin can increase prices up until they exclude enough
> of the market to cause a drop in overall sales and therefore loose
> profits. Still their choice! Right now there are enough people
> willing to buy Garmin products at Garmin's current retail prices to
> keep there production line busy. Until another company comes along
> with as good of a product or better to challenge Garmin it is not
> going to change. Garmin is in the business to make money not friends.
>
> Gary P

Well, I think you're correct: Garmin selling to retailers and requiring
them to set minimum retail prices as a condition of selling to them is not a
violation of the Sherman Act. It's not a violation either for us who
consider the practice to be sleazy to shun Garmin like it is a skunk either.

[jls]

"GaryP" > wrote in message
om...
> (Jay) wrote in message
>...
> > Didn't the CD manufacturers get into hot water for setting what
> > amounted to a Minimum Retail Price Policy?
>
> When an entire industry fixes prices that is illegal. But we are
> talking about 1 manufacturer setting prices, their prices.
> I am sorry but there is nothing wrong with that. Now if Garmin,
> Bendix King, Lowrance and whomever all met in a smoke filled room
> and set minimum prices for all GPS equipment that would be a different
> story.
>
> The notion of filing a class action law suit against Garmin for
> establishing a minimum retail price on their products is silly.
> No one forces a shop to sell Garmin. A shop chooses to do so willingly
> and in order to become an authorized retailer agrees to Garmin's
> retail policies. But it is still only Garmin setting prices on Garmin
> products. Now Garmin can increase prices up until they exclude enough
> of the market to cause a drop in overall sales and therefore loose
> profits. Still their choice! Right now there are enough people
> willing to buy Garmin products at Garmin's current retail prices to
> keep there production line busy. Until another company comes along
> with as good of a product or better to challenge Garmin it is not
> going to change. Garmin is in the business to make money not friends.
>
> Gary P

Well, I think you're correct: Garmin selling to retailers and requiring
them to set minimum retail prices as a condition of selling to them is not a
violation of the Sherman Act. It's not a violation either for us who
consider the practice to be sleazy to shun Garmin like it is a skunk either.

[GaryP]

" jls" > wrote in message >...
> Well, I think you're correct: Garmin selling to retailers and requiring
> them to set minimum retail prices as a condition of selling to them is not a
> violation of the Sherman Act. It's not a violation either for us who
> consider the practice to be sleazy to shun Garmin like it is a skunk either.

Absolutely! But if only a few of us shun Garmin it will have little or no
effect on their policy. As I said earlier too bad UPS Technologies ceased
to exist as an alternative to Garmin. Until a viable competitor comes along
Garmin will continue to reap the profits of their success and mandate
uniform minimum pricing from their dealers.

GaryP

[Jay]

I have a Garmin product myself, and its a really a piece of kit, but
my question is what are the reasons that make it advantagious for a
company to set this type of pricing policy?


(GaryP) wrote in message >...
> " jls" > wrote in message >...
> > Well, I think you're correct: Garmin selling to retailers and requiring
> > them to set minimum retail prices as a condition of selling to them is not a
> > violation of the Sherman Act. It's not a violation either for us who
> > consider the practice to be sleazy to shun Garmin like it is a skunk either.
>
> Absolutely! But if only a few of us shun Garmin it will have little or no
> effect on their policy. As I said earlier too bad UPS Technologies ceased
> to exist as an alternative to Garmin. Until a viable competitor comes along
> Garmin will continue to reap the profits of their success and mandate
> uniform minimum pricing from their dealers.
>
> GaryP

[Reality Check 101]

> Jay > wrote:

> I have a Garmin product myself, and its a really a piece of kit, but
> my question is what are the reasons that make it advantagious for a
> company to set this type of pricing policy?

Instead of OSHKOSH ( spread out over many many square miles )
lets say you went to a trade show in an arena.

There is the Garmin booth and as you walked around you realized that
there were also a dozen Garmin dealers with their own smaller booths
spread out throughout the arena.

Now Garmin is selling the hot XYZ unit for $1000 but the small print
says that dealers may sell for less.

Your frugal and want to save a buck so what do you do.

You start walking and talking.

Now after you've gone to all or most of the independent dealers and
weaseled ten bucks off this one, and then played him against another
dealer for another fifteen bucks, and then munched a hot dog as you
bargained for even more money off from the third, sixth, ninth,
fifteenth, dealer, etc., getting sore feet in the process and starting
to hear the occaissional dealer tell you to F OFF because they are sick
of you and a couple hundred others playing that game, what are you
going to do.

Well sooner of later common sense and those tired feet of yours are
going to tell you that you've gotten the best deal possible and it's
time to cut bait and put your money where your mouth is.

And if you finally get that absolutely spectacular deal for lets say
$875 and while gloating to your friends about how it was worth all that
time and energy, someone else slides by and shows you their receipt for
the same product for lets say $845 perhaps from the very same person
you bought your unit from, what are you going to do.

I'll tell you what your going to do..... The same as everybody else in
the same boat is gonna do.

YOU ARE GOING TO GO AND BITCH AT GARMIN.

Now I don't know what city you live in but if there is more than one
McDonalds, KFC, Safeway, Piggly Wiggly, Qwikie Mart,.... do you ever
notice that they all sell their products for the same price in the same
market area.

Try going to a 7-11 and offer the owner 50 cents less for a pack of
smokes or you will go to another 7-11 and see what they say.

This is why all of those food vendors at OSHKOSH are brought together
for a little chat from the organizers and are reminded that under their
vendors agreement with OSHKOSH that there is to be consistency in
the pricing of common items like, water, corn dogs cheeseburger, etc.

You might not like paying 4 bucks for a jug of water but you would like
it a lot less if you found someone a half mile away selling it for 2.

So if nothing else you know that when you walk around OSHKOSH
and your feet are sore, the kids are bitching, and your thirsty, that
since various vendors are selling an identical product, that at least
they all are selling it at an identical price.

[Rich S.]

"Reality Check 101" > wrote in message
...
> snip
> So if nothing else you know that when you walk around OSHKOSH
> and your feet are sore, the kids are bitching, and your thirsty, that
> since various vendors are selling an identical product, that at least
> they all are selling it at an identical price.

Makes you want to reach out and embrace Lenin, doesn't it?

Rich "To each according. . . " S.

[Gig Giacona]

Mainly to protect thier dealers..


"Jay" > wrote in message
om...
> I have a Garmin product myself, and its a really a piece of kit, but
> my question is what are the reasons that make it advantagious for a
> company to set this type of pricing policy?
>
>
> (GaryP) wrote in message
>...
> > " jls" > wrote in message
>...
> > > Well, I think you're correct: Garmin selling to retailers and
requiring
> > > them to set minimum retail prices as a condition of selling to them is
not a
> > > violation of the Sherman Act. It's not a violation either for us who
> > > consider the practice to be sleazy to shun Garmin like it is a skunk
either.
> >
> > Absolutely! But if only a few of us shun Garmin it will have little or
no
> > effect on their policy. As I said earlier too bad UPS Technologies
ceased
> > to exist as an alternative to Garmin. Until a viable competitor comes
along
> > Garmin will continue to reap the profits of their success and mandate
> > uniform minimum pricing from their dealers.
> >
> > GaryP

[B2431]

>From: "Rich S."
>Date: 7/20/2004 4:24 PM Central Daylight Time
>Message-id: >
>
>"Reality Check 101" > wrote in message
...
>> snip
>> So if nothing else you know that when you walk around OSHKOSH
>> and your feet are sore, the kids are bitching, and your thirsty, that
>> since various vendors are selling an identical product, that at least
>> they all are selling it at an identical price.
>
>Makes you want to reach out and embrace Lenin, doesn't it?
>
>Rich "To each according. . . " S.

Chapman shot Lenin a few years ago.

Dan, U.S. Air Force, retired

[Rich S.]

"B2431" > wrote in message
...
>
> Chapman shot Lenin a few years ago.

Well gosh Dan - couldn't you come up with an appropriate Lenin/Lennon quote?

Rich "You don't bring me flowers, any more" S.

[B2431]

>
>Date: 7/20/2004 7:20 PM Central Daylight Time
>Message-id: >
>
>"B2431" > wrote in message
...
>>
>> Chapman shot Lenin a few years ago.
>
>Well gosh Dan - couldn't you come up with an appropriate Lenin/Lennon quote?
>
>Rich "You don't bring me flowers, any more" S.

What, and and expend energy? Geeze, you are a demanding cuss.

"Religion is the opiate of the masses, wanna get stoned?" - Groucho Lenin, one
of the Lenin sisters.

Dan "I get my flours at the grocer's" U.S. Air Force, retired

[GaryP]

"Rich S." > wrote in message >...
> Well gosh Dan - couldn't you come up with an appropriate Lenin/Lennon quote?
>
> Rich "You don't bring me flowers, any more" S.

Common Rich, they both believed in a socialist utopia, just like Babbs.

Gary "Imagine all the people... P.

[Rich S.]

"GaryP" > wrote in message
om...
> "Rich S." > wrote in message
>...
> > Well gosh Dan - couldn't you come up with an appropriate Lenin/Lennon
quote?
> >
> > Rich "You don't bring me flowers, any more" S.
>
> Common Rich, they both believed in a socialist utopia, just like Babbs.
>
> Gary "Imagine all the people... P.

All I can say to you guys is - - - - O no.

Rich S.

[Ron Wanttaja]

On Wed, 21 Jul 2004 06:52:56 -0700, "Rich S." >
wrote:

>"GaryP" > wrote in message
om...
>> "Rich S." > wrote in message
>...
>> > Well gosh Dan - couldn't you come up with an appropriate Lenin/Lennon
>quote?
>> >
>> > Rich "You don't bring me flowers, any more" S.
>>
>> Common Rich, they both believed in a socialist utopia, just like Babbs.
>>
>> Gary "Imagine all the people... P.
>
>All I can say to you guys is - - - - O no.

"Napoleon is standing
with his pants upon the floor,
there are naked painted people
on the poster on my door
John Lennon and his girlfriend
couldn't show me any more
Won't someone please arouse my purient interest?

Won't you let me look myself, instead of waving it at me,
Don't leave it hanging out and sagging, over everything I see
Don't take of off, 'til I'm ready, let me have my little dream....
Have mercy on my poor old purient interest!"

John Hartford, "The Purient Interest Blues"

Ron "Sorry, John and Yoko reminded me of this" Wanttaja

[Badwater Bill]

On Wed, 28 Jul 2004 20:47:47 GMT, "Bruce A. Frank"
> wrote:

>Hmmm, if Garmin's prices are realistically so out of line then that will
>supply the stimulus for a competitor to bring a similar lower priced
>product to market. Certainly one has the right to discriminate when he
>either dislikes the company, the product they sell, the promotion
>methods they use, or the person who represents them. These days if you
>are a discriminating shopper better keep it quiet or someone will accuse
>you of censorship. ;^)

I look at it a bit differently. I bought the Garmin 296 because of
the terrain collision avoidance page and the flight instrument page.
I have flown IMC with it on my dash many times already. If every
instrument in the airplane fails in IMC you can fly the thing using
the 296. In the helicopters it's particularly simple. Going into
Burbank the other day I had a co pilot in an MD-500 watching all the
actual flight instruments as I flew the approach using the 296. It
worked flawlessly.

I was able to trade my 295 in at Spruce and get a $700 rebate off the
price of the 296. The 296 and it's terrain avoidance database, EFIS
page and the standard navigational page are life saving. There is
almost no question that any practicing IFR pilot needs this device.
It's a matter of life or death in the right circumstances. So, it
cost me a grand! I'd write a check for my entire net worth in a
helicopter or an airplane in hard IFR conditions when the vacuum pump
and alternator crapped out and I was spiraling into the farm. This is
what the 296 is...a second chance. And with the lithium battery, it
stays up for 12 hours or more now too. My 295 crapped out in 1.5
hours on the best AA batteries I could buy. So, I needed the aircraft
electrics to run the damn thing through a cigarette lighter cord
(depends on the same electrical system as all the rest of the crap in
the panel).

Fixing prices? Well, I think Garmin did a great job on it and keeping
the price up does nothing but encourage other manufacturers to compete
and build an equivalent or better mouse trap. The profit motive is
amazing to R & D. What "keeping the price high" does is force the
rest of the industry to compete, make better electronics and recover
their investment when they do. I don't mind seeing Garmin recover
their investment. But, there's something else going on here. They
are forcing the retailers to sell it at a certain guaranteed margin.
What this does is make retailers want to carry GARMIN products because
they know they won't be undercut or that the profit margin on a
Magellan is necessarily better. It makes a retailer want to advertise
the product because they know that they can re coupe if they do.

I veiw it as a method of keeping everybody honest and not undercutting
the profit in the product. The product is not undermined to the point
that no one wants to carry it because they can buy it so much cheaper
on ebay. It's like pilot's salaries. Pilots have undercut each other
to the point that some new commuter pilots work for something like
$500 a month. Why?? Because if you don't take that job, somebody
else will. It degrades the whole industry to the point where people
are working for slavery wages. It undermines and undercuts the entire
profession. I feel the same way about a product like the 296.

I don't blame Garmin. Keep the price reasonable (remember that simple
panel mounted GPS's cost $2500) The 296 at $1600 bucks is a steal.

Keep it reasonable but guarantee each retailer that they won't be
undercut by someone who is willing to sell out for less. That keeps
the product price strong, it keeps the profit in it for all retailers
who carry it, and it makes the competition work harder to beter their
equipment to make the same profits.

BWB