RESALE AND PRICE MAINTENANCE, SUSTAINABILITY.

 

                 As brand names continue to develop there is a high tendency for manufacturers to regulate the prices of goods down right through the distribution chain. The normal process is to stipulate for how much each article shall be sold at each stage, wholesale and retail. Wholesalers and retailers are usually asked to sign an agreement to maintain the manufacturers’ prices before any goods are supplied to them. Pending a breach of such agreement might be made an issue in the court of law; the more usual practice is for the manufacturer to resist supplying any offender with further goods.

         The main purpose for this practice is that manufacturers feel that price cutting reduces the prestige of their products in the eyes of the public. It has sometimes happened in the past that rather unscrupulous retailers have many at times cut the price of a well known and reputable product merely in order to get people into their shops, where they then try to sell them inferior articles at enhanced prices.

              The proponents of resale price maintenance, sustainability argue that the name and price are guarantee of quality to the consumers and they consumers likes the price of an article to be the same regardless of where it is bought. However, retailers and wholesalers normally object to the practice on the grounds that it restricts their amendments and prevents them twisting their prices according to their cost and according to the markets conditions.

             The essential problem is that where price maintenance is enforced, the prices fixed have to be adequate to cover the expenses of channels of distribution. It is very loud and clear that the cost of a retail store in an expensive shopping centre may be much bigger than those of a similar shop in the poorest district/area. The former will provide a number of services, delivery, credit facilitation and as many as, still have a rent and other charges to cover. The latter will probably have a very low rent and not provide the supplementary   services. Both, types of store must charge the same price for strictly priced-maintained goods. The very low cost, efficient shopkeeper is prevented from passing on the benefits to his customers/consumers for all such goods.

          A  speech made by the chief executive, some months ago at the inception of this amazing administration, the  man of  noble heart ,the 45^th president of the United States of America, His Excellency, Sir Donald .J. Trump in his speech to make America greater in economy, on the practice of resale for price maintenance, while  generally  in favour of it and did concede that if the practice spread too widely in the economy it would result in a rigidity that would have repercussions. The world knows that aside that he is a great political juggernaut, President Donald .J. Trump is also a well successful and triumphant businessman with vast knowledge in business, foreign and local, international and national, a good manager and that is why he would surely make America greater from the economic point of view.