Another Reason To Buy Used

Even though retailers often say that they offer the “lowest” prices, they are often limited by the manufacturers who try to maintain prices. As the internet has provided more competition, new companies have emerged that monitor who is selling what and their prices to police prices and ensure that sellers respect their contracts with manufacturers. Some are hoping to change laws to encourge greater competition and lower prices. According to the Wall Street Journal:

A group of major discounters, including eBay Inc. and Costco Wholesale Corp., is expected Thursday to call for new laws blocking manufacturers from setting minimum prices on everything from flat-screen TVs to power drills. That move could ratchet up a battle between retailers and a little-known but powerful industry that’s taken off in just the past year.

Tiny firms like NetEnforcers Inc. — with only 56 staffers jammed into a dim, spare cubicle farm here in Arizona — wield economic power far beyond their size. These companies scour hundreds of thousands of Web sites daily, looking for retailers offering bargains below the “minimum advertised price,” or MAP, set by manufacturers on an array of consumer goods.

When NetEnforcers finds goods like cameras, handbags or ovens for sale at too-low prices, as it claims to do 5,000 to 10,000 times a day, it alerts its clients, including Sony Corp., Black & Decker Corp., Cisco Systems Inc., JVC Kenwood Holdings Inc. and Samsung Inc.

For discounters, the consequences of not respecting MAP are usually speedy and decisive. If the seller is an authorized dealer of the product in question (which means it is bound to honor a MAP agreement), it gets a notice from the manufacturer or NetEnforcers and typically brings its price into line within hours, the company says.

The laws may change and this may lead to lower prices. In the meantime, this is another reason to look for used goods: manufacturers can’t dictate those prices.

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