RE: [APML] 12" & 14" LX200

["Joseph O'Neil" <joneil@multiboard.com>]

>OK, what do you call it when all the distributors sell
>products at exactly the same price? That's what I
>refer to as 'fixing'. Those prices have to be included
>as part of the contract with Meade, or else there
>would be more of a variation.

-snip-
Hi Alan;
         The teechnical term is "Minimum Advertised Price".  Now i don't 
sell Meade or Celestron - hard to pay bills & overhead  on %5 to 10% markup 
on a $2,000 scope - sorry, but it's the truth - and I am not exaggeratign 
either, I once sold a Vixen Visac for over $2,000 Cdna, dn by the itme 
allthe dust was settled, that scope, selling for just over $2,300 Cnd made 
me exactly $75 Cdn profit.  You try paying insurance, heating, phone, etc, 
etc bills on htat.  :)
         - But - back on topic -  I have seen the dealer catalogs in the 
past for these products, and i can tell you exactly how MAP started.

         about - oh - maybe 5 to 6 years ago, before MAp, small dealers 
were gettign crucified.  How it worked was like this.  Example - at that 
tiem Cleestron had a refractor - wholesale price was $550 US.  Now, if you 
bought ten or more - of the same thing - all at once - not spread out over 
6 months, but all at once, the wholesale price dropped to $500 US each.
         What was happening then was there were several of the large (and 
possibly less than reputable) camera mail order houses that started to 
carry & sell Meade & Celestron.    without exaggeration (I know, I saw the 
ads and hte dealer catalod at the same time, side by side), you would ahve 
these mail order house advertise that refractor at  $550 or even $525 US - 
at or below teh wholesale cost when you ordered one at a time.
         Now the small dealer cannot compete with that, not when his/her 
wholesale cost was $550 a shot.
         To add insult to injury, many of these mail order house, at that 
time, woudl nto even stock the telescope.  They would simply save 
pre-charge your credit card (or deposit your cheque), ave up orders until 
they ahve ten or more, and then they would have the telescope drop shipped 
direct from Celestron or Meade to the customer, and on top of them, some of 
them would add in hefty shipping charges, and that at times was wehre the 
real profit would be made.

         So in effect,t he small dealer who actually stocked the item, knew 
about the product, could actually service the item if needed, was beign 
undercut by a person/company that didn't know squat, almost never stocked 
the item, and basically made money simply  by taking a phone call and 
making another phone call, and nothign more.

         so, the small delaerrs, who really were the ones educating the 
consumer (and I include in the range of "small dealers" the "big guys" such 
as Astronomics, Antacores, etc) were just getting hurt bad, really bad, and 
something had to be done.   That's how MAP started out.

>And still Meade can afford to lower prices $1000 each
>on the 12"s and not go bankrupt. I don't know who
>Edgar is <g> but the LXs are certainly a great buy
>now. If I had the cash, I'd buy dozens and sell them
>later after prices go back up.


         Well let me tell you another story that happened here in Canada - 
two years ago - that illustrats just how dealers are treated - at least the 
small dealers are treated,b ut some of the larger companies.

         MQP Canada - now bankrupt - was the Meade distributor for Canada 
for a few years.  at elast, all the smaller stuff, a 16" SCT for exampel 
woudl still come direct form Meade.

         A Meade delaer dwon the street form me (and his family store has 
been carrying Meade & Celestron since Celestorn was Celstorn Pacific, over 
30 years ago almost), ordered in a dozen ETX scopes fomr MQP.  I forget 
wheich model, but hte wholesale cost - real numbers here - was $350 Cdn per 
scope, if you bought a dozen.  This was  - oh 2 years ago, about 3 months 
before Christmas.
         Well, about 6 weeks later, MQP comes back,a nd says - exact 
figures agian her, no exaggeration - they say "hey, that ETX is now $200 
Cdn each - want more?"
         Well the small dealer had not sold all of those scopes by then,a 
nd wanted to know if he would receive a credit for hsi past purchages.  The 
answer was no, no retrns, no credit.  not only that, MQP had made a deal 
with a large, big box chain (you have them too int he USA) to sell them at 
$200 wholesale each.  not only that, this store had oen fo those "we take 
returns no questiosn asked" policiy, becasue how MQP was workign it, all 
the scopes sold to this big box chain were sold on consignment, whereas the 
samll dealer had to pay cash up front.

         Well he and a few other dealers were burned bad by this,a nd a few 
other things MQP did, so what happened was everytime after that a new 
customer walked into thier store, interested in a small Meade product, the 
would get steered towards somethign form another brand.  I suppose tis was 
one of the straws that broke the camel's back and put MQP into comeplerte 
bankruptcy.  (All thier stock was seized by the baliff - inlcuding 
telescopes returned by customers for warranty work - several peopel lost 
their telescopes completely).
         i coudl go on a write a book, but basically, that's hwo some of it 
works, behind the scenes.

joe




http://www.oneilphoto.on.ca
http://www.multiboard.com/~joneil
Una salus victis, nullam sperare salutem



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