What is re -sales prices?
Price maintenance on further sale is a term used to describe a strategy where the product manufacturer achieves agreement with its distributors that these products will only be offered for sale at a specific price, above a specified price floor or under a specific price ceiling. This process creates a situation where the manufacturer has some control over the market price of products and can ensure that the agreement is obtained a reasonable amount of profit. Distributors often like the idea of maintenance of further sale, as the strategy helps to prevent competition between different product retailers in competition only, which eventually reduces profits to all involved. This price maintenance concept can be used on almost any situation where goods and services are sold through distributors or sellers.
There are two thought schools on the use of sales prices. One concept to hold this type of arrangement between the manufacturer and its distributors creates a situation where all participantsThe parties earn a decent amount of profit without creating disproportionate problems with some of the distributors. From this point of view, the conditions of the agreement prevent any distributor from undergoing other distributors by introducing DNA DNA prices in an effort to capture most of the sales volume.
Another perspective of prices of sales prices is that this approach establishes free trade restrictions. Here is the idea that the distributor should be free of charge to use any means necessary to move the products, including the use of a low price to attract consumers. By not limiting the prices of offered distributors, the ability to earn profits is more volume rather than a profit per unit. Some distributors who are unable to compete areorced outside the business and the manufacturer simply provides other units for sale by those distributors that remain active on the market.
debates on the impact of pricing on saleThey led to a period when practice was considered illegal or at least somehow limited. As a result, the change in approach has developed over time. In areas where the strategy is legal, it can take the form of what is known as the maintenance of sales prices, where the distributor sells products at a predetermined price. Another approach is known as price or minimal prices, where the distributor agrees to sell products above the basic or minimum unit price. The third alternative is known as maximum prices for further sales, where the distributor does not sell products for more than the maximum unit price.
In areas where government regulations allow for sale prices, conditions generally provide production right to negotiation if the distributor violates the agreement. If the distributor tried to hide the products at any price that is not allowed by an agreement in what is known as the gray market , the manufacturer may immediately terminate the distributor contract without announcing in advance. KroI may be able to legally demand damages from the distributor if the distributor may be proven that the activity of reduced profits or otherwise damage the business interests of the manufacturer.