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iPad 3 - Apple price fixing ?

ron1004

ron1004

macrumors 6502
Original poster
Feb 6, 2010
335
33
Louisville, KY
My wife would like an eReader, so I decided that it would be best to buy the iPad for this, and after much deliberation decided to go with the latest version (V3) WiFi only.

I thought I'd save on tax and buy it from B&H, where I've just recently bought my MBP 17", but notice that they don't sell this online - only in store, and see the same on a few other online shops.

I'll be going to my local Best Buy and wont be saving on the tax but will at least get the reward points.

How does Apple get away with regulating the prices and sale arrangements ?
 
It will get sold online ultimately. Best Buy is selling iPad 2 online isnt it? RIght now, my guess is that the stock levels are not too high to warrant 3rd party online sales.
 
Kind of an interesting question posed by someone trying to avoid sales tax. ;)

Can't say as I blame anyone for not wanting to pay tax. But still, I might have phrased the question differently. :eek:
 
Batavian said:
Kind of an interesting question posed by someone trying to avoid sales tax. ;)

Can't say as I blame anyone for not wanting to pay tax. But still, I might have phrased the question differently. :eek:
Click to expand...

Exactly since the OP is legally responsible to claim and pay uncollected sales tax.
 
Apple sells stock to the retailers then the retailers decide how to sell that stock. If they don't want to sell it online that's their decision, as GoodToGo mentioned it could be because stock levels aren't high enough yet. I doubt any actual price fixing is going on.
 
Apple is the only one who manufactures the iPad - therefore they cannot be "price fixing" in the legal sense.

Now, if all tablet makers got together and decided what the minimum price for a tablet would be - that would be price fixing.

Price fixing does not happen on a single product - only in a market or market segment. iPads are not a market segment.
 
Price fixing does not happen on a single product - only in a market or market segment. iPads are not a market segment.
Click to expand...

That is quite debatable, considering how some consider the ipad to be its own market. :D
 
r.j.s said:
Apple is the only one who manufactures the iPad - therefore they cannot be "price fixing" in the legal sense.

Now, if all tablet makers got together and decided what the minimum price for a tablet would be - that would be price fixing.

Price fixing does not happen on a single product - only in a market or market segment. iPads are not a market segment.
Click to expand...

What would it be called if Apple were to cooperate with retailers to make sure they sell the product at a fixed price then?
 
0dev said:
What would it be called if Apple were to cooperate with retailers to make sure they sell the product at a fixed price then?
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Establishing the minimum advertised price - which is what they do.

Nearly all electronic manufacturers will do this - and it is legal - because the price isn't fixed per se, they can sell it at a different price, but either: 1. they can't advertise at that price (and may lose money), or 2. they won't get sales at a higher price (people will go elsewhere).
 
r.j.s said:
Establishing the minimum advertised price - which is what they do.

Nearly all electronic manufacturers will do this - and it is legal - because the price isn't fixed per se, they can sell it at a different price, but either: 1. they can't advertise at that price (and may lose money), or 2. they won't get sales at a higher price (people will go elsewhere).
Click to expand...

That's interesting, I didn't know Apple could legally dictate the minimum price retailers can advertise the product at, I thought the retailers just kept it at the RRP because they'd lose profit. TIL.
 
0dev said:
That's interesting, I didn't know Apple could legally dictate the minimum price retailers can advertise the product at, I thought the retailers just kept it at the RRP because they'd lose profit. TIL.
Click to expand...

Yeah, it is usually part of the reseller contract. Break it, and no more products to sell.
 
r.j.s said:
Apple is the only one who manufactures the iPad - therefore they cannot be "price fixing" in the legal sense.

Now, if all tablet makers got together and decided what the minimum price for a tablet would be - that would be price fixing.

Price fixing does not happen on a single product - only in a market or market segment. iPads are not a market segment.
Click to expand...
Car manufacturers are the only ones that manufacture their product or model, just like there are other tablet manufacturers, and they have been hauled to court for price fixing.

AUTOS: Price Fixing in Cars?

After a four-month investigation of price fixing by auto dealers in major cities, the Justice Department last week got its first indictments. Named by a District of Columbia grand jury were 17 Ford, 14 Chevrolet and eleven Oldsmobile dealers. The charges: setting minimum prices on new cars for several years, as well as agreeing to refrain from price advertising and pegging prices of parts, accessories and service. In addition, Ford and Olds dealers were charged with setting minimum gross profits per sale ($225 for a Ford, $450 for an Olds).
Click to expand...

It's really odd that every resellers price for Apple products are exactly the same, whereas on other products you'll find those that go for high turnover may have better pricing etc.

Make no mistake, I'll be buying the iPad, and just curious as to how come every store has the exact same price and in this case, no online sales.

http://www.abt.com/product/60139/Apple-MC705LLA.html?keywords=
This item is available for in-store pickup if purchased online.

http://www.bestbuy.com/site/Apple&#...bolsp-app02-46?id=1218572403790&skuId=4881072
In Store Only


http://www.bhphotovideo.com/c/product/849110-REG/Apple_16GB_new_iPad_with.html
This item is not available for purchase online.
 
In your car case: they were hauled to court because they were competitors:

17 Ford, 14 Chevrolet and eleven Oldsmobile dealers
Click to expand...

Dealers compete with one another. For this example to apply, you'd have to show me a case where a single car dealer was brought to court for selling cars from one manufacturer at the MSRP (sticker price).

===

It's not really odd that the prices are the same - it's called minimum advertised price.
 
ron1004 said:
It's really odd that every resellers price for Apple products are exactly the same, whereas on other products you'll find those that go for high turnover may have better pricing etc.

Make no mistake, I'll be buying the iPad, and just curious as to how come every store has the exact same price and in this case, no online sales.

This item is not available for purchase online.
Click to expand...

1. It is available online....at Apple.
2. Sell it online or sell it in the store where people might buy something else while they are there.
3. What impetus is there for any retailer to sell below or above what Apple is selling the iPad for?

You've never worked in retail, have you?
 
TC25 said:
1. It is available online....at Apple.
Click to expand...
Yes, but no other reseller - what does that answer mean to you?
2. Sell it online or sell it in the store where people might buy something else while they are there.
Click to expand...
Best Buy sell most products on line and in store - this model is not even available from them buying online with in store pickup - why ?
3. What impetus is there for any retailer to sell below or above what Apple is selling the iPad for?
Click to expand...
Increased sales and greater turnover, just like they do with other products that they sell ?
You've never worked in retail, have you?
Click to expand...
WTF is that meant to imply ?

You never bought any products other than Apple, have you? - sounds silly, doesn't it ?
 
Well, since Apple enters contracts with the retailers, that's perfectly legal business. Most things don't make those arrangements, they just get their product out and mention how much the stores will buy it for. Then it is up to the stores to compete with the product.

However, other stores CAN use other company reasons to sell an Apple product for less. For instance, you can often check around Best Buys to see "Open Box" iPads. Heck. Saw one at Best Buy for a White 64GB iPad3 Wifi for $70 off the list price. Considering you still get the Apple Warranty and capability of any Apple Care as if it is a brand new product, that's a good way to save.
 
ron1004 said:
WTF is that meant to imply ?

You never bought any products other than Apple, have you? - sounds silly, doesn't it ?
Click to expand...
What you wrote is silly, to be sure. I already offered an explanation for why a store might not be selling iPads online. You appear to think it is some grand conspiracy of price fixing. If BB, or any other retailer, can sell all their initial stock of iPads at MSRP, why lower the price? Do you know what BB pays for an iPad? What their margin is? No, you don't. So you have no clue how much they could lower the price, but, again, why should they?
 
Ever bought a video game system? I recall buying a Super Nintendo in the early 90's for $129. Same price at every store in America the time. This is normal. If Nintendo colluded with Sega to set the Genesis at the same price, different story.

This is a stupid thread.
 
batotman said:
Ever bought a video game system? I recall buying a Super Nintendo in the early 90's for $129. Same price at every store in America the time. This is normal. If Nintendo colluded with Sega to set the Genesis at the same price, different story.

This is a stupid thread.
Click to expand...

It's hardly a stupid thread. The original question is a perfectly reasonable one, and most of the people who have responded don't seem to know much about this area of law. Minimum pricing contracts between manufacturers and retailers (vertical price restraints) were illegal under the Sherman Antitrust Act until very recently, when the US Supreme Court changed its mind and declared that such contracts were generally legal. The case was in 2007 (Leegin Creative Leather Products, Inc. v. PSKS, Inc.). That's why you now see just abound major every brand of anything being excluded from sales in which a retailer offers, say, 15% off any item. Before 2007, you didn't see these exclusions nearly as often. You only saw them when the retailer wanted to leave certain brands out of such promotions. Now retailers have to leave tons of products out of promotions due to contracts with manufacturers that would not have been legal contracts prior to 2007.

On the whole, the ruling has been very bad for consumers. It was a 5-4 decision brought to you by our wonderful conservative court.
 
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