Klipsch Files Lawsuit Against Multiple Internet Sa

[duff]

<font color='#000000'>I notice pretty much all manufacturers do this, with regard to &quot;authorized dealers.&quot;  Does this amount to simple price fixing, and sticking it to the consumer?  Or are there really legitimate reasons behind it all?</font>

 

[Audioholics]

<font color='#000080'>Everybody needs to make money or else we don't get any more products (i.e. they go out of business or reduce their R&amp;D, etc) so basically what happens is that they want to be able to continue charging certain prices for their gear.

When unauthorized internet sales drop that price to ridiculously low margins (via volume), legitimate dealers have to match it (with less volume), and the overall profits for everyone go down. Then the business model collapses.

While I think speaker companies can do a direct-to-consumer business model, R&amp;D would collapse if processor/amplifier companies lost their retailers. Who's going to show/demo products, etc if the retailers cannot afford to carry the items? It's a viscious circle.</font>

 

[Johnny2Bad]

Probably more likely is the manufacturer/distributor fears their bricks-and-mortar dealers, who are in a position to demonstrate the product and carry a representative selection of the line, will drop the line rather than be forced to sell at below cost ("below cost" including overhead) to compete with a reseller who may only stock a single model, or only order single items and only upon a sale (typical of the very lowest priced online vendors; the "business" is an office, not a warehouse).

Dealers provide vital brand support as well. Sometimes you don't know what the business you're dealing with is all about until something goes wrong. Poor support can harm the brand.

Unless the manufacturer prefers a direct-to-consumer sales chain, they are inclined to support their authorized dealers.