PULLING THE RUG ON PRICING
Bryer also suggests that there could be “tacit collusion” by vendors on prices, meaning that unofficial, industry-wide price-fixing could occur when vendors begin to react to one another’s price strategies. Dealerscope’s calls to manufacturers on this subject were not returned or declined.
Conversely, others in the retail industry are not so sure this ruling is a bad thing. Tom Drake, executive director of NARDA, got a few phone calls from some of his dealer members when the decision first hit the press. And while he says that his organization is taking a “wait-and-see” approach to the ruling, he speculates that the lift on the ban will have a positive effect. “I suspect this will be good for NARDA’s retail members,” he said, “It’s going to be good for our kind of retailer.”
Drake’s kind of retailer is the smaller, independent retailer—the mom-and-pop shops. Unlike the small business who lost in this trial (see sidebar), CE dealers do not have high margins on the major products they sell; discounting can result i serious profit loss. He believes this may help his members to better compete with deep discount retailers, who have little to offer the consumer other than rock bottom prices. Elly Valas, a retail consultant and contributor to Dealerscope, agrees and says that this ruling is nothing but good news for the independent retailer. “It will allow them to make money again,” she said.