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It also helps To reduce price descrepency between small and large resellers in both client base and market share which helps to prevent relative price hikes in
by dogma1138 8y ago
It also helps
To reduce price descrepency between small and large resellers in both client base and market share which helps to prevent relative price hikes in lesser served areas.
The question should be if the outcome of this is or is not beneficial to the end consumer.
Manufacturers have an incentive to keep their prices as close to their MSRP as possible and there aren’t many ways of doing that that are not anti-competitive on paper.
However I don’t think that a reseller in London should be able to offer a bette deal than a reseller in say New Castle or Leeds because they are bigger.
- TheSpiceIsLife 8y ago> However I don’t think that a reseller in London should be able to offer a better deal than a reseller in say New Castle or Leeds because they are bigger. While I agree a suburban / rural / remote customer shouldn't necessarily have to pay more, how do we reconcile this with the idea of economies of scale? If a larger retailer moves more units and can negotiate a better price from the supplier shouldn't they be able to pass (some of) that saving on to the retail customer? I thought this is, at least one reason, why franchises existed, so retailers can take advantage of bulk purchasing power?
- hammock 8y ago>I thought this is, at least one reason, why franchises existed Franchises are a licensing arrangement. You mean chain stores.
- james_in_the_uk 8y agoActually many franchises do work in this model. They are licensing deals and buying clubs wrapped up together.