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.’”