For many years manufacturers set the lowest price at which retailers could advertise certain big-ticket items like TVs. They wanted to stop shoppers who scoped out an item on the showroom floor, and then went online to find it advertised by another retailer at a lower price, from buying it there.
The Pro Series toothpaste, now advertised for about $9.96 on Amazon, is a higher-margin product where Colgate wants to protect its profits amid soaring costs.Toymaker Hasbro Inc "We're seeing categories adopt that never had, like food and beverage," said Jack Gale, an account executive at PriceSpider, which has seen 120% year-over-year growth in the number of brands using its products that help enforce these price floors since 2018.
Amazon's part in these pricing floors stems from its pledge to offer products priced as low as, or lower than, rivals like Walmart. This compels brands that sell huge volumes of goods on Amazon to set, and then enforce, a minimum price. Otherwise, they face shrinking profits.
If I order from Amazon, it's on my doorstep 5-48 hours after I place the order. More selection than any physical store. I avoid crowds. I save on fuel and wear and tear on my vehicle. It would have to be deeply discounted at physical store for me to go thru the trouble.
Competition is good!
In the UK RRP & manufacturers setting the minimum price was outlawed years ago. The manufacturer sells its products to wholesalers & retailers or even direct to the customer. It is for the seller to decide on the final price point & any profits margins taken.
So, is this yet another way companies are price gouging during a global downturn?
There’s something poetic about Amazon doing to Walmart… what Walmart did to every mom & pop retail store. Ta da.