A group of Arizona dealers lobbying for stricter enforcement of minimum advertised pricing policies has ramped up the fight.
At a recent meeting, the Arizona Pool Dealers Association, an affiliation of retailers, builders and service technicians, largely agreed to either not work with products purchased over the Internet or to charge extra to make up for lost revenue.
Earlier this year, APDA members began to focus on the issue of unenforced MAP policies. They began to draft agreements whereby a manufacturer would pledge to reserve its products and incentives for operations that adhered to MAPs, and dealers would sell and support that manufacturer’s goods.
With brick-and-mortar companies feeling the heat of lower Internet pricing, many have wanted manufacturers to enforce MAP programs in the hopes of being able to compete with online retailers.
“If the Internet’s a little cheaper, we can compete with that, but it doesn’t make sense when the Internet is so much cheaper and even below our cost,” said Dale Howard, president of B&L Pools in Phoenix.
While some manufacturers do a very good job of enforcing price limits, others are negligent, dealers said.
“The manufacturers want to move product, and I get that,” said David Hagen, vice president of operations at Cactus Valley Pool Supply, a multistore company headquartered in Gilbert, Ariz. “But I’m tired of being in a place where I educate the consumer to make their buying decision and then [they] go elsewhere. ... Really, we feel like we’re just helping the window shoppers make their buying decisions to go online and purchase high-ticket items.”
As an example of what APDA would like to see, Hagen points to some manufacturers inside and outside the pool and spa industry that enforce their MAPs to the extent that they will not only cease doing business with retailers who don’t comply, but also cut off their distributors if the violations continue.
Many APDA members have chosen to minimize or eliminate sales of one major manufacturer’s products because they believe the supplier is not enforcing its own MAP policy. Some professionals even returned displays and inventoried product back to the company.
“I don’t want to take my wall space and have my employee sell you on [their] product and then they go on eBay and buy it from some person who doesn’t know what the word ‘margin’ means,” Hagen said.
They’re looking to reward manufacturers that do police their MAPs. “The group is trying to find avenues to protect themselves,” Howard said. “The group’s looking to align themselves with manufacturers that are supporting some sort of price structure that [allows us] to stay in business.”
It’s not only that they lose the sale, these dealers said. They also are being accused of price gouging by customers who’ve seen the lower Internet prices. To prevent this, one dealer will let customers know when a product is available for less on the Web. “If they find out they can get it $100 cheaper, they’re going to think I’m a cheat,” said Bart Mitchell, owner of Litchfield Park Pool Service in Litchfield Park, Ariz.
“I’ll also tell them, ‘It’s fine if you buy it on the Internet, but if it doesn’t work, don’t bring it to me. ... ’ I’m just going to be upfront, honest: ‘You can get it cheaper [online], or you can buy it from me and I’ll take care of you.’”
The group recently took a vote and almost unanimously decided to refuse performing warranty work on products purchased on the Internet, or to charge for the service. The same goes for installation of products originating from the Web — though some companies won’t even do it for an extra charge.
“One of our members had legal counsel [say] if they did install it, then they would be liable for the full thing,” Howard said. “Most manufacturers back their products, but in case that wasn’t done, then [the installer] could be held accountable for the total product, even though he didn’t sell it. So most of the members said they would not install Internet products.”
But not everybody believes that refusing installation or warranty work will prove effective. “That wouldn’t fix the problem, because Johnny One Truck will have no problem installing it for a couple hundred dollars,” Hagen said. “They don’t even have a choice because they can’t compete at all. At least I have good buying power.”
Word of APDA’s efforts is spreading around the country, with professionals in other states contacting the group for advice, according to Howard.“We’re trying to invoke a change,” he said. “We don’t want to take a manufacturer and say, ‘We don’t want to deal with your products anymore.’ We want them to come forward and say, ‘We’re going to support you.’”