passlaku wrote:The "price support" is a fascinating concept. Can you explain how this applies to Blichmann? Is it because they promise their retailers that Blichmann will buy the inventory back from the retailer rather than the retailer putting it on sale; thus, keeping prices high?
Price support is historically tied to government intervention, but not in the modern use of the term.
Price support means the manufacturer sets the retail price for their product, sets the wholesale/dealer price for their product and thus establishes the margins of profit for distribution. The dealers by contract must sell said product at said price or they will be blacklisted from future business and be subject to civil action for violating a contract.
Let's say I make a product that I sell to a dealer for $100 and the contract says they must retail it for $150. If they don't, they are in breech of contract and subject to a civil suit.
What this does is force pricing upon consumers and dealers that is determined by the manufacturer. You will always pay the same price for a Blichmann product at retailer A as you do retailer B, C, D, etc. What this does is eliminate any sales, discounts, or incentives for the product that the retailer may use to promote and grow their business. It eliminates price competition in a free market. It fixes prices in a market with the threat of pulling the supply chain to that retailer. That is a shit way to do business.
Dealers are not allowed to put Blichmann products on sale. Ever. No specials, no discounts, no deals.
That's great that Blichmann is a sponsor of the BN, but I will never, ever buy anything of theirs because of their practices.