Merchants Laud New Pricing Policies, Mostly

By Alan Wolf On Aug 6 2012 - 4:01am




NEW YORK — Most merchants appear to favor the unilateral pricing policies (UPP) imposed on select new product lines, and the tougher stance some manufacturers are taking with MAP enforcement both on- and off-line.

“UPP and MAP policies are better for the industry overall,” said Fred Towns, president of New Age Electronics and Jack of All Games, the Synnex distributors. “Better profits can be realized by tightening pricing variances, and protection of manufacturers’ brand integrity also helps lessen the commoditization of CE products.”

Jeannette Howe, executive director of Specialty Electronics Nationwide (SEN), agreed. “The MAP and UPP programs have helped,” she said. “The major video manufacturers have finally realized they were eating their young, and need healthy retailers and custom installation dealers for their survival.”

Stephen Baker, industry analysis VP for The NPD Group, believes the pricing programs strike a good balance within the premium segment. “As currently employed, they allow for sufficient margins on higher dollar value products and allow enough price flexibility to meet demand, while not insulating products and retailers from the market forces that should drive pricing decisions,” he said.

But while PRO Group executive director Dave Workman agreed that “UPP appears to be working overall,” he questioned the rationale of preventing authorized retailers from participating in third-party reseller opportunities.

“All that has occurred is that the authorized dealers are gone and unauthorized accounts have taken their place,” he said. “No change in market pricing on these lines has occurred as a result. This is a very complex issue.”

Amazon.com declined to comment on vendors’ Internet pricing policies. But Buy.com, the third-largest online-only nonvendor CE seller, believes the programs, thought well intentioned, are swimming against a rising tide.

“Ultimately, Internet retail, and especially mobile shopping, will continue to see hypergrowth,” predicted chief marketing officer Bernard Luthi. “Those that embrace new shopping behaviors will survive, and those that resist will fall behind the curve considerably.”

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