Have you been noticing more and more lately that no matter which online retailer you visit, you have to add the item to your shopping cart to see the price? Blame it on manufacturers, who are taking advantage of a 2007 Supreme Court ruling to be more aggressive about controlling pricing online, writes the New York Times.
Ever since that decision, retailers say manufacturers have become increasingly aggressive with one tool in particular: forbidding retailers from advertising their products for anything less than a certain price.
For offline retailers like Wal-Mart Stores and Best Buy, that means not dropping below those prices in the circulars and ads in newspapers. But online retailers have a greater burden. Manufacturers consider the product pages on sites like eBay and Amazon.com to be ads, and they complain whenever e-commerce sites set prices below the minimum price.
The practice has spread from consumer electronics to things like sporting goods and books, and obviously it ruins the idea of transparency online–such unlisted prices keep those listings out of price comparison searches, for example.
The article says manufacturers argue if they don’t put a stop to steep online discounting, it will be a race to zero and everyone will lose–brick and mortar stores will be unable to compete and stop carrying goods entirely. Somehow I don’t think the hands-on experience of a brick & mortar store will ever lose a certain appeal, particularly if you can match it with quality customer service and expert help.
Update: An anonymous tipster wrote in with some insight on the world of price enforcement:
I used to work with a company called Net Enforcers ( http://www.netenforcers.com/ ) that monitored online pricing for companies… The are the mercenaries who track online prices and newspapers as well. Sunday fliers, the whole nine…
They pay their employees to surf the web, THE WHOLE DAY, monitoring eBay and specific sites making sure that the products aren’t advertised at a lower price. They also monitor use of product pictures.
“The Fight Over Who Sets Prices at the Online Mall” [New York Times]
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