What Firearms Industry Manufactures Don't Want You to Know

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    What Firearms Industry Manufactures Don't Want You to Know


    Warning!
    Ths information may not be suitable for all. This material may cause puking.

    This is the first in a series of posts where I will attempt to X-pose certain facts you as the consumer may not be aware of when you purchase a firearm or firearm accessory.

    There will be arguments to support these practices and as many or more against. Comment for or against are of course welcome.

    I will go on record saying I am vehemently opposed to any restraint of trade or price fixing schemes.

    I am however at the same time, an advocate of free enterprise.

    This post is about fairness and to inform you.
    You as the consumer should be made aware but You must ultimately decide if you wish to support these practices by continuing to buy products from these manufactures after reading the facts.

    Unilateral Price fixings loophole is the 'Colgate Policy', otherwise and not withstanding these practices would Illegal under Sherman Anti-Trust laws which have been in place for 100 years.


    37 of 50 State Attorney Generals oppose Retail Price Maintanienence and all 50 State have some consumer protection laws against illegial price fixing. Only the state of Maryland has outrightly and specificialy banned MAP pricing, a form vertical price fixing to be discussed in future posts.

    First up is Unilateral Pricing Policies.

    If you have ever wondered why the price of a certain “Brand” item is priced exactly the same in all retail stores and even on the internet, it is because of Unilateral Pricing.

    Some manufactures employ a price fixing scheme known as Unilateral Pricing.

    Firearms industry manufactures that engage in Unilateral Pricing schemes Include but are not limited to:

    • Leupold
    • Redfield
    • Pentax
    • Nikon

      Most retail dealers "appear" to be abiding by Unilateral price policies dictated by manufactures.
    Manufactures distributors are the manufactures enforcers of the policy.

    The role of the local manufactures sales representative is to provide “Special Incentives” for some large retailers.

    Hay, they do it in Mexico as a normal way of doing business.

    Wal-mart of course ignores almost all unilateral pricing and all other restrictions imposed ostensibly on and applying to ALL retailers.


    Unilateral Pricing Detail: (source Wikpedia)

    A Unilateral Policy, 'Colgate Policy', or "Unilateral Minimum Retail Price Policy" is a form of Resale price maintenance within the United States based upon the Supreme Court's ruling in U. S. v. Colgate & Co. , 250 U.S. 300 (1919), A Unilateral Policy enables a manufacturer to influence the price at which its distributors and dealers resell its products to consumers without agreeing with resellers on price and thereby illegally price fixing.

    Beginning with the Sherman Act in 1890 which banned, "every contract, combination …, or conspiracy, in restraint of trade" price fixing by the manufacturer was held to be illegal. In Dr. Miles Medical Co. v. John D. Park and Sons, 220 U.S. 373 (1911), the United States Supreme Court affirmed a lower court's holding that a massive minimum resale price maintenance scheme was unreasonable and thus offended Section 1 of the Sherman Antitrust Act. The decision rested on the assertion that minimum resale price maintenance is indistinguishable in economic effect from naked horizontal price fixing by a cartel.

    Subsequent decisions characterized Dr Miles as holding that minimum resale price maintenance is unlawful per se - that is, without regard to its impact on the marketplace or consumers. While vertical price agreements remained taboo, in 1919 the Supreme Court in United States v. Colgate & Co., recognized the manufacturer's right to deal with whomever it wanted, and as importantly, its right to refuse to deal.

    This distinction allowed manufacturers to announce terms under which they would deal with their resellers and then refuse to deal with those who failed to comply.

    Colgate's progeny in 1984 further built upon this right in Monsanto Company v. Spray-Rite Service Company, stating that, "under Colgate, the manufacturer can announce its re-sale prices in advance and refuse to deal with those who fail to comply, and a distributor is free to acquiesce to the manufacturer's demand in order to avoid termination".

    Colgate policies, are independently adopted and announced by the manufacturer. The manufacturer, without any agreement with the reseller, announces a minimum resale price and refuses to make further sales to any reseller fails to sell at or above the announced price. There is no contract and the parties do not agree on the price.

    Aside from suggesting retail prices or having the reseller act as an agent of the manufacturer and sell the goods on consignment, until the 2007 Leegin Creative Leather Products v. PSKS, Inc. decision a Unilateral Policy was the only way that a manufacturer could directly influence reseller's retail price without subjecting itself to per se liability for price fixing.


    In a new post I will explain another form of retail price maintenance known to retailers as Minimum Advertized Pricing, aka (MAP)


    If you understand, things are just as they are... If you do not understand, things are just as they are....
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    Member Array hfjeff's Avatar
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    Not firearms, but add Bose speakers and Weber grills to that list. They are the same price anywhere you purchase them. I think it is more common than you want to know.

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    Twenty or more years ago, there was a common practice in the US called "Fair Trade Pricing" by which a product's manufacturer entered into agreements with retailers to establish the minimum price for which a given product could be sold. This was common practice for firearms, and Remington in particular made note in their catalogs that their products were subject to "Fair Trade" laws.

    I'm not sure of the means by which this organized price-fixing scheme went away, but it was history by the mid-80s. Looks like it's making a comeback.
    Smitty
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    Quote Originally Posted by hfjeff View Post
    Not firearms, but add Bose speakers and Weber grills to that list. They are the same price anywhere you purchase them. I think it is more common than you want to know.
    Yes, Unilateral Price Fixing Schemes have become popular with several manufacturers as you note due to circumvention of anti-trust law. The List includes also includes LG, Sony and others.

    Because this forum's focus is mainly firearms related, I chose only to mention some manufactures directly related to the firearms industry. In future post I will explain MAP pricing which is a form of price control that artificially raises prices but allows the retailer some latitude in setting their own prices.

    My decision to make DC forum members aware is tied to current economic conditions. I want You the consumer to know some of the reasons why prices continue to rise while our current administration reports that inflation is insignificant and that the Private Sector is in "Good Shape."

    These practices in my option are also job killers. Prices are unfairly inflated by greedy manufactures with flawed business models. In turn, consumers buy less. When consumers buy less, manufactures do not add to the labor force, they out source more to the Philippines, Brazil, Croatia, etc.... and write more pink slips for existing US employees.
    If you understand, things are just as they are... If you do not understand, things are just as they are....
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    VIP Member Array Rollo's Avatar
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    I got one word for you...Capitalism.
    -It is a seriously scary thought that there are subsets of American society that think being intellectual is a BAD thing...

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    Quote Originally Posted by Rollo View Post
    I got one word for you...Capitalism.
    Capitalism is good. Capitalist pigs are not. Unilateral pricing is socialistic in nature. There is no incentive for healthy competition that would otherwise occur between retailers.

    When prices are fixed as in socialist and communist countries, there is a high occurrence of corruption; exactly what is happening. The small retailers are getting pushed out while manufactures by indirect collusion through distributors and "sales reps" aka bag men, intentionally lessen supply (even in a poor economy) thus creating more demand.
    If you understand, things are just as they are... If you do not understand, things are just as they are....
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    VIP Member Array Rollo's Avatar
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    Quote Originally Posted by SIGP250 View Post
    Capitalism is good. Capitalist pigs are not. Unilateral pricing is socialistic in nature. There is no incentive for healthy competition that would otherwise occur between retailers.

    When prices are fixed as in socialist and communist countries, there is a high occurrence of corruption; exactly what is happening. The small retailers are getting pushed out while manufactures by indirect collusion through distributors and "sales reps" aka bag men, intentionally lessen supply (even in a poor economy) thus creating more demand.
    TRUE capitalism is a seller being able to price and sell their goods however they want with no restrictions imposed by anyone. Price fixing is VERY much capitalistic in nature.
    21bubba and atctimmy like this.
    -It is a seriously scary thought that there are subsets of American society that think being intellectual is a BAD thing...

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    Quote Originally Posted by SIGP250 View Post
    I will go on record saying I am vehemently opposed to any restraint of trade or price fixing schemes.

    I am however at the same time, an advocate of free enterprise.

    This post is about fairness and to inform you. You as the consumer should be made aware but You must ultimately decide if you wish to support these practices by continuing to buy products from these manufactures after reading the facts.
    If you think the price is too high, buy from the competition. A free market will efficiently and ruthlessly correct for overpriced products.
    WHEC724, Aiko and atctimmy like this.

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    Bingo


    QUOTE=Ransom;2290222]If you think the price is too high, buy from the competition. A free market will efficiently and ruthlessly correct for overpriced products.[/QUOTE]

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    Distinguished Member Array 21bubba's Avatar
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    Quote Originally Posted by Ransom View Post
    If you think the price is too high, buy from the competition. A free market will efficiently and ruthlessly correct for overpriced products.
    Double Bingo

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    Quote Originally Posted by Rollo View Post
    TRUE capitalism is a seller being able to price and sell their goods however they want with no restrictions imposed by anyone. Price fixing is VERY much capitalistic in nature.
    As much as I enjoy your company here Rollo, I vehemently disagree with your interpretation of capitalism. The message of this post is quickly going sideways, based on the misunderstanding of a re-seller agreement vs. price-fixing.

    A re-seller agreement is a legitimate means of pricing when a manufacturer of goods realizes that it has greater channels to distribute it's goods by enlisting re-sellers. Those re-sellers sign a contractual agreement where they are legally bound to maintain a certain price-point - otherwise they would be under-cutting the price of the original manufacturer. Makes sense? If the price is too high, the product doesn't sell, and the manufacturer and the OEM either fail or lower their prices. THAT is the beauty of capitalism, not to be confused with 'price fixing'.

    'Price fixing' is an illegal practice where there is back-room agreement among competitors in a market segment, that agree to artificially hold a price in the hopes that the consumer cannot find an alternative channel. Now before panties start getting all wadded-up here, (aside from the fact that it is illegal) the principals of capitalism ensures that this approach will fail, because if there is sufficient demand, alternative channels will naturally emerge due to clear opportunity and under-cut the price-fixing scheme. If there is not sufficient demand, well then we can all do without their price-fixed product? Either way, problem solved.

    Where things get gummed up is when you get artificial meddling from a too-powerful government mis-using tax dollars to try to mediate a system, that it's members do not have the education, nor experience to understand. It then boils down to the clueless bureaucrats who spend money that they tax from the seasoned business citizens who make money. Now consider that the bureaucrats use those tax dollars to buy the media outlets, in order to brainwash the masses that capitalism is bad, so that the bureaucrats can gain even greater control to tax and manipulate the things that they were never educated to understand.

    The pains that we are presently seeing blamed on capitalism are merely the birth pains of the monster called socialism, which is just a facade behind which communism stands. Anyone who is in favor of such reform, does so in complete disregard of all historical example.

    Quote Originally Posted by Ransom View Post
    If you think the price is too high, buy from the competition. A free market will efficiently and ruthlessly correct for overpriced products.
    I suppose I could have just said that.
    eeeZnow and peckman28 like this.
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    And of course the MAP does not always reflect the actual sale price. CDNN, a number of other firearms and also electronics retailers will have stuff listed as Price On Request, or call for price etc. As they are not advertising the price of the item the MAP does not hold them to anything. They can sell the product for whatever their current financial situation will support. And of course the flip side is that unlike a fixed price you can mark it up as high as you want above the MAP and no one has a problem with it.
    Infowars- Proving David Hannum right on a daily basis

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    I don't buy anything unless I can haggle the price down or get something else thrown in for free. Works every time. Every house, every car, every gun. I've haggled over prices at a yard sale...when the price was only a quarter...just because I could. If they don't sweeten the deal, I walk away. If they can't budge on the gun price, they can always throw in some ammo or a holster. There's more than one element to making a deal.
    Know Guns, Know Safety, Know Peace.
    No Guns, No Safety, No Peace.


    Guns are like sex and air...its no big deal until YOU can't get any.

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    Welcome to America. And with most things now day... it ain't gonna change. Ever since profit turned to greed there is no stopping the "Corporate Mongrels" ...... Other than buying from someone else you just get to "grin and bare"......
    "One of the greatest delusions in the world is the hope that the evils in this world are to be cured by legislation."
    --Thomas B. Reed, American Attorney

    Second Amendment -- Established December 15, 1791 and slowly eroded ever since What happened to "..... shall not be infringed."

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    Not sure why this is in GenGun sect but that being said
    You dont have to buy it but I know of no guns priced this way........and if your friendly enough with your
    dealer he/she will cut you a better deal,esp if you buy volume -

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