phred

<ul><li><a href="http://www.autoweek.com/cat_content.mv?port_code=autoweek&amp;cat_code=car news&amp;loc_code=index&amp;content_code=04643784" >Autoweek</a></li></ul>

April

instead of reduced profit margins set by MBoA. I know of several who left Mercedes dealerships when they couldn't charge whatever they could get from individual customers. 10K per car was not unusual. 20% of that over 10 cars is far better for the salesperson than the current 20% of 2 to 5K per car.

Obviously Mercedes will have to increase the margin between invoice and MSRP if they can't count on a consistant margin for the dealers. This gives the dealers more room to make up the average. A few folks are going to get their heads ripped off, many will pay more than now, and some will make out like rats. Unfortunately it is the rats who usually make out like rats:-(

New to Mercedes customers have no clue how much more they will end up paying if the current system goes away. I guess all they want is a chance to roll the dice - like going to Vegas. What they don't realize is that in the end, the house wins. Not only that, but far more ill will is generated by haggling than any other part of the transaction.

By protesting a set and firm retail price, customers are declaring open season on themselves for dealerships.

2.7tDallas

If these dealers were all owned by MBNA, it would not be an issue. BUt they are independent businesses, and MBNA can not tell them what to sell the cars for. Now there are many "carrots" they can dangle out there to keep the dealers in line, it apears they went to far.

Also - MB is a different kind of car line than it was 5/10 years ago, and the old line Mb salesguys are probably not the right demographic any more

April

averages. Often the nicest people you would rather give the good deal to, are the ones you have to take advantage of to bring up the sales margins. Better that bargaining in the traditional car sense be left behind with the Dodo. Concentrate on good service instead.

Mercedes could lower their sales margins when they went with this program, because of the pricing consistancy. It sounds like few idiots who like the game of bargaining, felt cheated when Mercedes dealers wouldn't play. That opens the doors for people to be taken advantage of again.

2.7tDallas

I think you should re-read the article. the Robinson Patman law is pretty clear. No price fixing.

"dealers conspire with each other on prices, that's horizontal price fixing. If a factory has agreements with dealers to fix prices, that is vertical price fixing. Both together are known as hub-and-spoke price fixing, said Ed Glynn, a Washington antitrust lawyer."

This is the issue.

Definitely

All sell in a variety of stores and even online for exactly the same price. In Massachusetts it was called 'Fair trading' and was made illegal 25 years ago. I've often wondered how these manufacturers get away with it these days.

Potomac-Greg

If a retailer did not sell at the "suggested" price, that retailer might not get further shipments. Even mark-downs and sales are "coordinated" through the manufacturer.

2.7tDallas

which witholds advertising money of the ad is at a lower price. In addition, the supplier may withold allocation at his dicretion to a specific dealer, and with hold other promotional support. All of this has is currently legal, until the definition changes.

By the way, the reason PS2 is $199 is that it cost walmart $190

2.7tDallas

so if someone quotes you something as being "% off MSRP"&lt; they are full of it. Manufacturer's work backwards from where the retail price point needs to be, and what margin the retailers demand, then price thier prodcuts to the retailrs accordingly.

The majority of my clients do not even publish an MSRP, and have not for years

Potomac-Greg

... the retailer and wholesaler/manufacturer/distributor.

In the retail apparel world, there is also the "standard" mark up of 100%. If a store puts new merchandise on the floor at less than this mark up, the manufacturer will freak out.