Rifle Scopes MAP Pricing Structure

[Tunanut]

Re: MAP Pricing Structure

<div class="ubbcode-block"><div class="ubbcode-header">Originally Posted By: BasraBoy</div><div class="ubbcode-body">Have you tried asking Pepsi or Coke?

I'm only giving examples of how I operate in my business.....

As alread said...other sectors/companies may act or interpret MAP differently.

But we set NO restriction on sales price only advertsied price and anyone entering into a contact with us has the choice to accept the way we operate or not get involved with us.

There seems a lot of input in these threads that make me wonder how to equate buying US manufactured products with the desire to drive the price down to the lowest possible point.

Living (and being engaged in a home-market based manufacturing business) in a country where the traditional manufacturing base has all but been destroyed, I am dumbfounded at the apparent desire by some posters here to create a similar situation elsewhere.

Wanting the best quality possible WITHIN a given budget is normal.

Aspiring to better, more capable products than we own is normal

Wanting the BEST but not wanting to pay for it or resenting those that uphold the value and quality of their product, is just sour grapes and the road to mediocrity for all. </div></div>

The last line in my post was sarcasm. I get that you understand, but many do not. Pepsi and Coke call it margin control, not price control. Mention price control and they'll walk out.

I have the unfortunate privelege of knowing some ex-textile manufactures here in NC and southern VA. All with similar stories. Good guys paying their people good wages. They tried to explain to their employees that in order to pay them their $18/hr, their products(shirts and pants) will retail for $40 to $60 along with the retailers selling their products. Well the employees still went to walmart and bought the $12 shirts and pants so after a year and a half or so of loosing money, the owners shut the mills down and moved to Hilton Head, Charleston, and Ocean Isle. They are still comfortable, but all of their employees lost their good paying jobs because they didn't understand the correlation.

 

[sharac]

Re: MAP Pricing Structure

Basraboy: I agree 100% with you and yes MAP as advertising is basically all well however in many cases its intent is twisted and in package with end price control.

I also agree with buying quality products (which i always tend to) however in quite a few cases some try to hide ripoff behind quality and this is something i'm absolutely unwilling to tolerate. Here we also have a flood of cheap China stuff but to be brutally honest i'd prefer to have 2$ snickers for 14 days and then throw them away and buy another pair than to pay ridiculous price for a brand name (probably even made in the same factory) with same or worst quality and then bang my chest of how advanced consumer i am. As for buying local and supporting local business sure great but i'm pretty sure you don't have a local guy around for most of the items you need.

MAP as an advertising instrument i think we all know comes with certain strings attached and we can all pretend our king is not naked but that still doesn't change the fact he should really get some clothes...

 

[RobG]

Re: MAP Pricing Structure

<div class="ubbcode-block"><div class="ubbcode-header">Originally Posted By: BachelorJack</div><div class="ubbcode-body">Something that it doesn't seem a single person who has posted so far understands. MAP is not at all designed to protect the little guy. It's to protect the big retailers.

THE SOLE PURPOSE OF MAP IS TO KEEP SMALLER RETAILERS FROM EATING AWAY AT MUCH LARGER RETAILERS POTENTIAL PROFITS AND SALES.</div></div>

Interesting. I thought it the other way around; protecting the little guy.

Was MAP even an issue before a certain optics company came out with a certain scope loaded with features for under a certain price?

 

[TwoGun]

Re: MAP Pricing Structure

Minimum advertised price is irrelevant. The issue is resale price maintenance and yes, there has been countless studies as to why it exists both pro and con. The best I read was a 1998 study that looked at hundreds of court cases and the issues involving them. The study didn't really come to a conclusion on a single purpose of RPM. However, RPM has showed up more due to a 2007 Supreme Court decision that basically said RPM wasn't illegal as a concept and that each case should be judged on it's own merits. That case has led to an explosion of manufacturer price control. That's why Congress is exploring the issue as we discuss this.

Here is a very large 1983 study which, of course, was done prior to the Internet. Enjoy. I can't find the 1998 study. I'll keep looking.

This is a large file so you better have a fast connection.

http://www.ftc.gov/be/econrpt/233105.pdf

Here's a 1988 study. Again another large file.

http://www.ftc.gov/be/econrpt/232122.pdf

An interesting link:

http://antitrustcommentary.com/?cat=150

 

[MillSpec]

Re: MAP Pricing Structure

If Vortex are forcing dealers to not sell under MAP IMO they are breaking the law.

As long as LO advertise the scopes at MAP what deals they do is between them and who ever they sell too.

Make the same mistake in europe and its a fine up to 10% of GLOBAL turnover. Ask Intel & Microsoft, they both got stung

 

[ceylonc]

Re: MAP Pricing Structure

<div class="ubbcode-block"><div class="ubbcode-header">Originally Posted By: MillSpec</div><div class="ubbcode-body">If Vortex are forcing dealers to not sell under MAP IMO they are breaking the law.

As long as LO advertise the scopes at MAP what deals they do is between them and who ever they sell too.

Make the same mistake in europe and its a fine up to 10% of GLOBAL turnover. Ask Intel & Microsoft, they both got stung </div></div>
This is the EXACT reason Hawke Optics dropped their MAP policy. At least this is what their head of North American operations told me. For what it's worth...

 

[greentimber]

Re: MAP Pricing Structure

Another factor that no one here has mentioned ties back in to the most basic of all economic concepts; supply & demand. With only a relatively few exceptions (there are a few multi-brand conglomerates we all know of), the entire firearms industry is made up of small businesses, many of which are family owned and operated. These businesses have relatively limited production capacity. We should (but don't, unfortunately) understand that lower prices = more demand. When a manufacturer can only produce 100 widgets per month and sells exactly 100 widgets per month at price $X then anything below that price harms the manufacturers ability to <span style="font-weight: bold">satisfy their customers at all levels</span> - including distributors, dealers and end users.

If you haven't spent any time working inside the industry you may have no way to know this, but there are a great MANY of our favorite brands in this boat. The manufacturer doesn't WANT to sell more than X number of units because they CAN'T do so while maintaining the quality and service levels they have deemed appropriate. I know of more than one business in the industry that has DIED because they tried to grow too fast or too large relative to their resources. Fact.

The idea of seeking large amounts of debt and liability to increase production capacity is made even more unbearable by the shitty political situation we're in where an investment in a new weapon design and the needed production tools to make that weapon today may be destroyed by a piece of emotion-based legislation tomorrow.


We are living in the "good ole days" of rifle optics. There are lots of choices for us all at many price points. If you don't want to pay $x,xxx for a scope, don't. Buy something else at a lower price level. Chances are you'll be happy with it - that's why this is "the good ole days" of scopes. .

 

[TwoGun]

Re: MAP Pricing Structure

<div class="ubbcode-block"><div class="ubbcode-header">Originally Posted By: greentimber</div><div class="ubbcode-body"> I know of more than one business in the industry that has DIED because they tried to grow too fast or too large relative to their resources. Fact.
</div></div>

Names please.

 

[rezmedic54]

Re: MAP Pricing Structure

I would say High Standard has gone that way they use to make 45's and 38 Supers last I looked all they seemed to make where starting guns. There prices where good but everyone wants the deal. I hear it all the time We have a Wal Mart down the road that still sells rifles had a guy call me amd ask me if I could beat there price on a shotgun. Hell what do you think then I was a greedy bastard cause I would sell one for less there are guy out here besides myself that I'm sure someone has had the call for ammo sure I have so next is how much 8.50 well Wal Mart has it for 5.35 next is guess you don't want to sell any of your shit do you. Most of the time I'm nice but after a while it take your ass down there and buy theirs. How many guys on here have had the question why can't you sell at what they do short answer is Wal Mart tells it's suppliers this is what you will sell it for or we will go someplace else. It make it hard to compete with folks like that.

 

[Metonymy]

Re: MAP Pricing Structure

<div class="ubbcode-block"><div class="ubbcode-header">Originally Posted By: jasonk</div><div class="ubbcode-body"><div class="ubbcode-block"><div class="ubbcode-header">Originally Posted By: MillSpec</div><div class="ubbcode-body">Damn i wonder how the rest of the world survived without MAP for all these years?</div></div>

The market changes. Before the internet, smart phones, free long distance and cheap printing in China of mail order catalogs you didn't have a choice but to buy from the local hardware/sporting goods store. So they could set a fair price with a fair profit and sell goods without worrying about the mega-chains undercutting them and running them out of business. </div></div>

Improvise, adapt, overcome.

Or does that saying not apply anymore?

 

[ToddM]

Re: MAP Pricing Structure

that might hold true for some things but what about tactical scopes.

I mean I seriously doubt any vendor is calling up S&B, Premier, etc. and ordering 1000, 10000 scopes at a time aside a military contract perhaps.

So there's no "walmart" in the tactical scope world. For companies making hunting scopes..maybe. I'm sure some dealers sell more than others, but I'd be willing to bet there's no dealer out there that buys enough product that could keep any tactical scope company in business on their orders alone. So then in that market do any of those dealers have that kind of power where they can tell S&B, dictate terms and tell them what they are going to buy their scopes for.....I really doubt it.

 

[MillSpec]

Re: MAP Pricing Structure

Premium brand makers want to keep their RSP high. Zeiss told me on the phone that people who have £2k to spend on an optic dont care about the price.

i said as someone who has about £13k worth of optics and NV i care about every fucking penny.

 

[dar1246]

Re: MAP Pricing Structure

Dealers should be able to sell the product for whatever profit they want. They are the distribution of the products. With map pricing it protects the Manufacture getting its high prices.
If you think about it. There is a difference in quality but not so much in raw materials. This is why other Scope makers are joining in. High profits with not much more cost than cheap scope and a selling price of 2000 to 3000.
With Map all make money with higher margins but less volume. Less manufacturing and less overhead.

Like Remington getting 1000 dollars for a BDL when use to buy around 300 to 400. Put the word tactical in front of and double the price.

My 2 cents.

 

[TwoGun]

Re: MAP Pricing Structure

Ok, High Standard did not die because they were in such great demand that they no longer could meet production and started producing crap. They died because they got bought by a larger corporation that didn't know what they were doing. Ruger did. Goodbye High Standard.

Any more examples of lack of price control killing a company?

"In 1968, the company was purchased by the Leisure Group which was a growing conglomerate. The timing was, however, very bad as the Gun Control Act of 1968 caused the mass merchandisers (nearly 60% of High Standard's business at that time) to drastically curtail firearms sales. This dramatic loss of business forced High Standard to downsize while, at the same time, carrying more inventory than before. The company's main sales continued to be in the .22 target pistols and the derringers.


http://www.highstandard.com/about-us/history.html

 

[deadly0311]

Re: MAP Pricing Structure

<div class="ubbcode-block"><div class="ubbcode-header">Originally Posted By: MillSpec</div><div class="ubbcode-body">Premium brand makers want to keep their RSP high. Zeiss told me on the phone that people who have £2k to spend on an optic dont care about the price.

i said as someone who has about £13k worth of optics and NV i care about every fucking penny. </div></div>

It seems you and Sharac have a huge axe to grind with Zeiss.....

The MAP Policies protect the smaller dealers plain and simple. If it werent in place people like Cabelas and Bass Pro would put all the small dealers out of business. It has nothing to do with wanting to get the most money we can for products.

 

[sharac]

Re: MAP Pricing Structure

<div class="ubbcode-block"><div class="ubbcode-header">Quote:</div><div class="ubbcode-body">It seems you and Sharac have a huge axe to grind with Zeiss.....</div></div>

I don't have a problem with Zeiss at all. I think they make excellent stuff and have their "shit" sorted out. However i saw the numbers (maybe i shouldn't have

) and that's all. I could (maybe i should actually to be fair) leave out the name of the company but i prefer to say what i have to say directly without beating around the bush.

I think good companies will never abuse their position in the market but all it takes is one moronic manager with some crazy ass ideas to ruin a lot these days.

 

[TwoGun]

Re: MAP Pricing Structure

<div class="ubbcode-block"><div class="ubbcode-header">Originally Posted By: HDC-Deadly</div><div class="ubbcode-body"><div class="ubbcode-block"><div class="ubbcode-header">Originally Posted By: MillSpec</div><div class="ubbcode-body">Premium brand makers want to keep their RSP high. Zeiss told me on the phone that people who have £2k to spend on an optic dont care about the price.

i said as someone who has about £13k worth of optics and NV i care about every fucking penny. </div></div>

It seems you and Sharac have a huge axe to grind with Zeiss.....

The MAP Policies protect the smaller dealers plain and simple. If it werent in place people like Cabelas and Bass Pro would put all the small dealers out of business. It has nothing to do with wanting to get the most money we can for products. </div></div>

There is little evidence for that. Feel free to point out in any of the studies as that being a motivation of the manufacturers.

 

[LibertyOptics]

Re: MAP Pricing Structure

Interesting thread, I'm no economics guru and never will be. There is a lot I'd like to add or debate concerning MAP in reference to the "little dealers" but I doubt I will change anybodies minds. The big guys says MAP protects the little guys, the little guys says MAP protects the big guys. I will say that, for example, when I study Cabela's balance sheets, I see a net margin of about 3%. Cabela's Net Margin That's 3 pennies profit on every dollar in sales. So if a MAP price has a 20 point cushion in it, and the little guys can sell for a 5 point discount, it would seem to me that matching that price long term would be a losing strategy for someone like Cabela's. Again, I'm no economics guru, and I'm sure it's more complicated than that, but going straight to the bottom line, the answer is simple to me. You draw your own conclusions.

However, the real purpose of this post is to set the record straight on a couple of things. It seems there has been a jump to the conclusion that Vortex is twisting LO's arm to sell their products at a certain price, no matter what. That is 100% untrue. Vortex does have a systematic and thoroughly written MAP policy that is well enforced, but let me make it clear that we are free to offer you guys a deal over the phone, PM or email, in a one on one, <span style="font-style: italic">personal</span>, non public/shared communication channel. This has been the official policy from the top since this past summer. Regardless of anyone's feelings on the matter, the fact is "we" can <span style="font-weight: bold">privately</span> sell less than MAP without penalty or retribution from Vortex. This is a big deal, and must be understood by all.

The fact is, Vortex Optics has been a blessing for us. We were smart enough to jump onboard when we first saw them at SHOT and they were nice enough to treat us with seriousness and respect.

Sure, as companies grow and other dealers enter the picture, there is all sorts of pressure to change the way you do business. Decisions have to be made. The bottom line is that the character of the people of Vortex has consistently risen to the surface and LO is allowed to operate, within the rules, in our own unique style. I can not ask for anything more than that. While we may be a bit of a black sheep, we are still in the Vortex family. We plan to be for many years to come.

Guys, please, I understand the feelings and very much appreciate the support, but let me say in no uncertain terms that the folks at Vortex... Dan, Joe, and Sam Hamilton, Paul Neess, Shamus Terry, Tim Austin, all the crew, is from top to bottom some of the finest people in the industry I've ever worked with. When you deal with them on a daily basis like I do, you would understand that they deserve to be embraced for who they are and what they do for the shooting community. The effort and desire is always there to bring you the best for the money.

Having said that, that doesn't mean operating in this internet forum age doesn't present challenges. The intent of my original post (most of you got it) is that how we conduct ourselves can have a tremendous impact on how easy or how difficult it can be to do business in this environment for dealer, manufacturer, and customer. Lately things had been made unnecessarily difficult and I changed/controlled what I could to minimize the associated stresses.

If anybody has any questions feel free to call or PM me.

Thanks,

Scott

 

[Driftwood]

Re: MAP Pricing Structure

<div class="ubbcode-block"><div class="ubbcode-header">Originally Posted By: HDC-Deadly</div><div class="ubbcode-body">
The MAP Policies protect the smaller dealers plain and simple. If it werent in place people like Cabelas and Bass Pro would put all the small dealers out of business. It has nothing to do with wanting to get the most money we can for products. </div></div>

When I do a search online, I don't find that to be the case at all. The MAP is used to protect profit margins and prevent the larger retailers, with bigger overhead from being undercut by bargain basement online store which has no overhead. Enforcement of the MAP is most often because a larger retail outlet complains about a smaller one,not the other way around. The larger retail store doesn't have to contend with the MAP as they have enough buying power that the manufacturer will accomodate them. The smaller retailer just has to get in line or is cut out, sort of similar to what started this thread to begin with.

I think the silliest arguement that I have seen on this is that MAP is there to somehow protect the consumer. It's definitely not there for the small business or consumer. I will just continue to use the Hide Midway Discount Codes. I think its funny that many of the people arguing for the MAP system, can't wait for the next set of codes from Midway which is a very obvious route around the MAP system. I may pay it if I feel the product in question offers a good value for my dollar. When buying a high dollar item there are usually discounts available and I will continue to look for them.

As a consumer, the manufacterer needs my business more than I need theirs. They are free to use whatever means of pricing they wish just as I am free to shop around. HOW someone does business is one of the factors I consider when making a purchase. Its a very important factor to me. If I feel a business or brand is unfair in its business practice, then I will choose not to do business with them based on principle. I can always find an alternative product or business.

 

[TwoGun]

Re: MAP Pricing Structure

Cabelas corporate net 3% is huge. Most large discount consumable retail is 1% or less. However, net numbers can be deceptive especially for private companies. You really have to look at the officer salaries and capital investment to find the real net numbers. Corporate net can be meaningless.

 

[jasonk]

Re: MAP Pricing Structure

<div class="ubbcode-block"><div class="ubbcode-header">Originally Posted By: LibertyOptics</div><div class="ubbcode-body">However, the real purpose of this post is to set the record straight on a couple of things. It seems there has been a jump to the conclusion that Vortex is twisting LO's arm to sell their products at a certain price, no matter what. That is 100% untrue. Vortex does have a systematic and thoroughly written MAP policy that is well enforced, but let me make it clear that we are free to offer you guys a deal over the phone, PM or email, in a one on one, <span style="font-style: italic">personal</span>, non public/shared communication channel. This has been the official policy from the top since this past summer. Regardless of anyone's feelings on the matter, the fact is "we" can <span style="font-weight: bold">privately</span> sell less than MAP without penalty or retribution from Vortex. This is a big deal, and must be understood by all.

The fact is, Vortex Optics has been a blessing for us. We were smart enough to jump onboard when we first saw them at SHOT and they were nice enough to treat us with seriousness and respect.

Guys, please, I understand the feelings and very much appreciate the support, but let me say in no uncertain terms that the folks at Vortex... Dan, Joe, and Sam Hamilton, Paul Neess, Shamus Terry, Tim Austin, all the crew, is from top to bottom some of the finest people in the industry I've ever worked with. When you deal with them on a daily basis like I do, you would understand that they deserve to be embraced for who they are and what they do for the shooting community. The effort and desire is always there to bring you the best for the money.</div></div>

Scott,

Thanks for setting the record straight!! Based on a lot of posts here you could see that some guys ASSUMED that this was all driven by Vortex, to the point where some said they were breaking the law by forcing dealers to sell at MAP. I'm very glad to hear that they are in fact the stand up company that we've all thought they were and I know that I am very happy to have them here on the Hide!!

Jason

 

[jrob300]

Re: MAP Pricing Structure

<div class="ubbcode-block"><div class="ubbcode-header">Originally Posted By: LibertyOptics</div><div class="ubbcode-body">I understand the feelings and very much appreciate the support, but let me say in no uncertain terms that the folks at Vortex... Dan, Joe, and Sam Hamilton, Paul Neess, Shamus Terry, Tim Austin, all the crew, is from top to bottom some of the finest people in the industry I've ever worked with. </div></div>

Scott,

I too appreciate the clarification. I, like a lot of people here, have been burned in the past. Makes one understandably cynical. One of my mottoes is "If it seems too good to be true, it probably is". Vortex seems too good to be true. Their products are very good and their Customer Service is outstanding. It's good to see that their business practices are consistent.

The evidence is beginning to pile up in their favor.

John

 

[MillSpec]

Re: MAP Pricing Structure

<div class="ubbcode-block"><div class="ubbcode-header">Originally Posted By: HDC-Deadly</div><div class="ubbcode-body"><div class="ubbcode-block"><div class="ubbcode-header">Originally Posted By: MillSpec</div><div class="ubbcode-body">Premium brand makers want to keep their RSP high. Zeiss told me on the phone that people who have £2k to spend on an optic dont care about the price.

i said as someone who has about £13k worth of optics and NV i care about every fucking penny. </div></div>

It seems you and Sharac have a huge axe to grind with Zeiss.....

The MAP Policies protect the smaller dealers plain and simple. If it werent in place people like Cabelas and Bass Pro would put all the small dealers out of business. It has nothing to do with wanting to get the most money we can for products. </div></div>

Well no not really. i just used Zeiss as an example since i have recently spoken to them. But the truth is that these Premium brand owners have no idea about the type of customer they THINK they have.

They claim that people who want expensive items dont care how much they cost and this imo is totally the opposite of the truth.

 

[CMH]

Re: MAP Pricing Structure

Scott,

Thank you for what is probably the most enlightening post of this thread, and what I was looking/hoping for when I started it. Your post explains a lot - including my perceived "disconnect" with Vortex approach.

This thread has really grown some arms and legs from my original intent, but I guess in many ways that is the nature of the internet beast. In retrospect, I probably could have just picked up the phone and called Scott to get his take on it. It probably would have been an easier and cleaner conversation, but then I think the rest of the group would have missed out on the info, and we all would have missed out on an interesting conversation - no matter your perspective.

I have been impressed with Vortex - I have bought some of their product and plan on acquiring more. After Scott's response, I am even more firm in that decision.

So once again, thanks for your repsonse Scott. I appreciate your perspective and think it is cool that a fellow Montanan has such a good thing going and a following on the Hide.


Casey

 

[ToddM]

Re: MAP Pricing Structure

<div class="ubbcode-block"><div class="ubbcode-header">Originally Posted By: matthewusmc8791</div><div class="ubbcode-body">

3rd point, grey imports......... "

</div></div>

Symantics but actually I believe you mean counterfeit imports, not gray market. My understanding is that gray market goods are actually made by the manufacturer they are just bought in another country and imported many times by unofficial dealers or individuals. It usually makes it lucrative if you can get a much better price even after shipping, taxes etc. buying a product in another country. This happens all the time with high end camera lenses and optics. Road cycling is one example of this, you can pretty well buy any road bike part overseas, pay shipping, tax etc. and it's still 1/2 the cost of what it costs in the US from a dealer.

Manufacturers discourage this because they try to keep customers buying from dealers in their own country, and of course if they can sell higher for more profits in a certain country they want to protect those profits. I forget which but it used to be leica or zeiss had a longer/better warranty for products bought here from USA dealers than customers in other countries were given in an effort to discourage Americans from buying imported products at lower prices (but still official original zeiss/leica products not counterfits). Other manufacturers will not offer any warranty on their products if not bought in the owners home country from an authorized dealer, or if you do want warranty you have to return them to a service center in the country they were originally bought in.

 

[hydro556]

Re: MAP Pricing Structure

Fucking drama. Everybody in everybody elses business.

If guys could build their relationships with their vendors of choice, then buy their gear and not go flapping their jaws (half the time exaggerating their deals) all over the web, we wouldnt have these issues.

 

[Tunanut]

Re: MAP Pricing Structure

<div class="ubbcode-block"><div class="ubbcode-header">Originally Posted By: hydro556</div><div class="ubbcode-body">Fucking drama. Everybody in everybody elses business.

If guys could build their relationships with their vendors of choice, then buy their gear and not go flapping their jaws (half the time exaggerating their deals) all over the web, we wouldnt have these issues.



</div></div>
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