This might be old news but I just saw this:

http://www.merricktackle.com/images/PENN-x-large.gif

Please take a moment to read the following letter faxed to us from PENN.
Because we shipped a reel to a customer who was not on their gold label list they will no longer sell us their products. Beware - you could be next. We own our company - you own yours - Penn does not, and therefore, should not dictate how we choose to do business.


The rest is here: http://www.merricktackle.com/PENN-page.html

Seems a little harsh, although one must ask if they did indeed violate a sales contract?

-spence

Penn and their price fixing suxs:af:

Stopped buying them years ago...older models are better, todays stuff, no thanks...my .02 cents :) johnny

I think that if you were a tackle supplier maybe 15-20 years ago this would mean the end of your reel business. Now it just means you will be losing a low end supplier in everything except offshore reels.
Like to hear Mike's opinion...

A contract's a contract. If Merrick violated, they pay the price.
Surely Bassey: if you have any low-end 704's or 706's you don't want, send them my way.;)

There is 2 ways to look at. Setting the sell price (which I do not like) every one is suppose to sell at the same price or forfeit the product line. What if Wally world is buying at 7% below my cost .All that means is they have to sell at the same price and makes them more profit.
Cabalas has their cabalas card any purchase counts towards earnings. Does this not violate the minimum sell price? Sure it does but shops do not have enough money to fight the big companies or offer credit cards.

According to Penn if I offer free Braid with the purchase of a 965:yak6: I am in violation:smash: you tell me where it makes scence. In order to offer free goods I keep it off the books and say screw Penn they have to prove it.


This policy Penn is following only hurts the consumer in the long run.

A contract's a contract. If Merrick violated, they pay the price.

Most Reps Suck sorry but it's true. I have caught them in so many lies or misinformation it is scary.
Merrick like myself most likely never saw it. It was brought to my attention By the penn rep (one of the good ones)when the canal chamber of com was loosing Penn as a sponsor and they asked me if they could use my advertising allowance towards the Prizes. I said Ok. after I said ok i was then was forced to sell at the price Penn listed. ( he some how waited till after I comited to tell me)

The old policy was if we sell for under the SRP that we forfeit the advertising allowance. That’s OK I never asked for it . They make it so hard to collect it it's not worth it.

Originally posted by mikecc
Most Reps Suck sorry but it's true. I have caught them in so many lies or misinformation it is scary.
Merrick like myself most likely never saw it. It was brought to my attention when the canal chamber of com was loosing Penn as a sponsor and they asked me if they could use my advertising allowance towards the Prizes. I said Ok then was forced to sell at the price Penn listed.

The old policy was if we sell for under the SRP that we forfeit the advertising allowance. That’s OK I never asked for it . They make it so hard to collect it it's not worth it.

how is penn going to know if you sell there reels under price listing and include free braid?:hihi:

When the people have an issue with the reel and need service.

ohh i see:)

Do the other tackle manufacturers have similar policies?

Do the other tackle manufacturers have similar policies?

Mike I would delete those posts... Someone from Penn might read them. you never know :huh:

I heard somewhere(where has slipped my mind...) that price fixing is against the law?

Shimano has a set pricing also dont they?


Price fixing really sucks especially for the little guy like Mike explained! Wally World makes a killing selling at the same price as any small business due to the fact that their wholesale price is much less do to buying power.

Its the same old same old! The rich get richer!!

looks like I never buy penn again!

This is really old news. Marrick hasn't reconcilled with penn (yet) but all of the other big time dealers, like Shark River Mail Order have. I think someone called Penn's bluff and either took them to court or threatened to. The contract clause they were trying to enforce is an illegal resteint of trade under federal law and if one or more of their dealers took them to court over it they could have recovered triple damages. Penn wisely backed off about a month or two ago.

Penn & shimano have not backed off .
The same program is inforced for the 2005 season.

Penn,Shimano and who else? Do VS and Aquaskinz have similar policies? It would be nice to know who does and who doesn't,now that the subject has been brought up. No use getting ticked at Penn and Shimano if it's common practice.

I received that letter from Merrick's quite a while ago, maybe seven or eght months ago. Shimano has been a stronger proponent of set prices than has Penn. I think Penn in the last few years decided to join this party. The only time any deal on a Shimano happens is when they discontinue a line or change the products style and they farm out the old models. I don't sell tackle but as told by a fellow member of the list their are ways to attract a customer and keep them happy. And hey I have to tell you if a tackle shop can't put line on a Shimano 4000 given that the price is $239.00 last I checked somethings wrong.


Reading the Water is a love story!

.

Originally posted by 28inches
Penn,Shimano and who else? Do VS and Aquaskinz have similar policies? It would be nice to know who does and who doesn't,now that the subject has been brought up. No use getting ticked at Penn and Shimano if it's common practice.

It's more like who is not involved in the practice of price fixing

Originally posted by Eben
Mike I would delete those posts... Someone from Penn might read them. you never know :huh:

Yup, they don't screw around....

F*** Penn:af:

a little off topic but....
i got some of the first slammers they came out with, the 360 and 560. had problems with both instantaneously. was told to send them back and they would replace old parts with updated ones. get them back and still had the same problems. send them back again and Penn said they'd replace the reels. two weeks go by and i still don't have my reels so i make the call. the penn reel maintenance guy says they performed tests on the reels and they are fine and they are not replacing them. WTF. got the reels back and they still don't perform. only used them a handful of times last year. never buying there products again unless it an old 704 or 706. made over a 100 trips last year and only used one 704(have 3 of them) the whole season. no problems there...

Definitely a turn off! once you pay penn their price , you should be able to give them away , sell at whatever price you want or simply throw them into the canal. Once you pay their price , its yours and you should be able to do what you want with it.

I'm definitely turned off on penn.

I don't think there's anything unethical about price fixing, as long as Penn isn't colluding with other manufactures to move the market upwards. Maintaining market share is all about position and appearance. If Penn produces a bad product, eventually the brand recognition won't keep sales alive.

It does seem absurd though on a bread and butter item like a Penn reel. Makes more sense on the higher end items.

-spence

You guys are acting like it is somthing new. It has been going on for years. it is not in just reels Blanks, Lures , Refrigerators , Stereos , Cars it goes on & on.

Originally posted by spence
I don't think there's anything unethical about price fixing, as long as Penn isn't colluding with other manufactures to move the market upwards. Maintaining market share is all about position and appearance. If Penn produces a bad product, eventually the brand recognition won't keep sales alive.

-spence

Enforcing minimum retail prices was ruled an illegal restraint of trade about 7 years ago. It was a landmark case, whose name escapes me at the moment. It used to be common practice until the FTC brought this case. Now the Mfgs can "suggest" a minimum price but they can't enforce it by refusing to sell to those who would undercut the price. Good law and good policy.

There is a very fine line between price fixing, good product marketing and safe harbor regulations. Every manufacturer wants you to buy all of his line [exclusively] but how far can you go to insure that is where a manufacturer first becomes unethical then illegal.
Mike you said it best in your first post; either way the consumer loses....

How most of them do it .

Ex :
If go to a trade show I can agree to the terms and collect a 10% cash back or free goods which we figure into the price to lower it. or I can forfeit them and sell at what ever I want.

You see it is my choice to forfeit or accept. Choice is the key word.

seems they are going to an aproved list. this means if you do not comply the distributor can no longer sell to you. This puts the distributor in an awkward place because if he does not sell to a shop they might go elsware for additional purchases.

In the case of shimano
Top shelf program
they controol the distribution of the reels or rods and billed thru a distributor. Any problems and they just will not ship the reel or rod.

Not to cast dispersions against anyones reasoning here, but if all the reels were the exact same price we or you would have a case. But their are differents reels with different prices manufactured by different companies. You will probably be stunned to know that most manufacturers of a product that make any article for sale generally get a 300 % markup on their products, and that price representitive of the 300 % cost plus profit cost to the retailer is the wholesale value of the item. :laughs:


Reading the Water is a love story!

With Penn and Merrick, or Penn and all their retailers with this gold level idea, is this something which Penn has always done or is it something which has come up since Penn was bought out a few years back?

Vermonter,
With Penn its new since they were bought out. Before this they couldn't have cared less what the retailers sold their reels for.

I came accross a similar statement like that the other day. (I can't seem to find the page now but when I do I will post it) Penn would not sell them inter'al reels because they were discounting them and they were not on their gold lable list. Their complaint was that they had been doing this for 20 years and now they are blacklisted so to speak. They said they will stop carrying their equipment.

It pains me to say this but Penn is headed toward the dumper anyway....their spin stuff is sloppy and poorly made and their high end conv'ls have been eclipsed by all the oversea makers....more every year entering the market....Penns market share has gone to a fraction of what they once were.
Sad but true.

It's incredible the amount of negative PENN opinon. I find it hard to believe they are still in business. Fisherman don't even have to jump up in price to get a better reel, so PENN should let the market decide on what is the fair market value for its product while they still have a company. Their is so much to choose from now than from when PENN's name became the reel deal. I started switching a few years ago to another brand. And I won't go back.


Reading the Water is a love story!

I own a company that has similar market share concerns in niche markets. Penn would not care if the retailers gave the stuff away below cost except only the biggest 1 or 2 retailers could afford to do this for any period of time. All the other smaller retialers would eventually drop the line as unprofitable and Penn would then be left with 1 or 2 large customers who whould ultimatlely control Penn.
Very complex issue....

Thanks for the reply Mako, that was the impression I had gotten but wasnt sure. As for Penn products and designs, the anit-reverse with the SS line never bothered me, I expect to do some maitenance on reels and that was simple to deal with, never had a problem with it. Tho I think an altered bail design would be a good idea on the SS series. Ive just been nervous about their future ever since learning about the nature of the recent buyout. There is a great deal more competition these days with Tica, Okuma and others jumping into the market recently, and since Penn on their higher-level reels cant compete on labor costs, you'd think they would try and stay competitive with design features. I'll spend slightly more for a reel that I know is made in this country.

The Reason why Penn is doing a top shelf program is because Shimano has been doing it for years, they want to keep the integrity of the product line, which in most situations helps the consumer, so if you go into store A and then go to store B the product would be the same price, I know what you are saying well what about Walmart or K Mart etc, they sell them for less, well that is going to change, Penn wants to help the small retailer out, because they know how important they are.

Originally posted by Vermonter
Thanks for the reply Mako, that was the impression I had gotten but wasnt sure. As for Penn products and designs, the anit-reverse with the SS line never bothered me, I expect to do some maitenance on reels and that was simple to deal with, never had a problem with it. Tho I think an altered bail design would be a good idea on the SS series. Ive just been nervous about their future ever since learning about the nature of the recent buyout. There is a great deal more competition these days with Tica, Okuma and others jumping into the market recently, and since Penn on their higher-level reels cant compete on labor costs, you'd think they would try and stay competitive with design features. I'll spend slightly more for a reel that I know is made in this country.

Penn has reintroduced the 5500SS and the 4000
series as the SSG.All the features that the Jap companies have had on their reels for years.Waterproof drag,bails that supposedly won't trip during a cast,even line lay,a few more BBs.

Originally posted by softail
The Reason why Penn is doing a top shelf program is because Shimano has been doing it for years, they want to keep the integrity of the product line, which in most situations helps the consumer, so if you go into store A and then go to store B the product would be the same price, I know what you are saying well what about Walmart or K Mart etc, they sell them for less, well that is going to change, Penn wants to help the small retailer out, because they know how important they are.

You can bet your bottom dollar that penn isn't going to stop selling to Walmart. In fact they initally adopted the program to protect their Brick & Mortar retailers from the internet retailers. But that has already been declared a failure since they caved in to some of their internet retailers like Shark River Mail Order. Make no mistake about it, the program had nothing to do with protecting the consumers. They get screwed on the deal the only ones that got anything out of it ws the small B&T shops.

Bass....I knew they had altered the graphite bodies and redone the handle but wasnt aware they had worked on the bail or line lay for the SSG's......well hopfully they'll get around to redoing the 6500 some time in the not too distant future.

Originally posted by Vermonter
Bass....I knew they had altered the graphite bodies and redone the handle but wasnt aware they had worked on the bail or line lay for the SSG's......well hopfully they'll get around to redoing the 6500 some time in the not too distant future.

I'd like to see the bigger reels revamped too.It be nice to see the 6500 and 7500 reworked.They also worked on the antireverse.

I'm considering 450SSG to replace my 4500SS on my small schoolie rod.But gotta see and feel one first.I've had nothing but headaches with 4500 and 5500 SS reels in the past.

When you start talking about Walmart as opposed to small retailer like MIKECC and the other tackle shops the unfair disadvantage there is that Walmart calls PENN and says we want this many reels and this is what we are going to pay you for them. End of discusion. I first heard of this tactic mentioned while talking to a PLANO rep. Walmart placed the order and PLANO shipped for exactly what Walmart was willing to pay. The funny thing about Walmart is the prices there aren't any less than they are at any of the local small shops and in fact a better deal can be had at the small shops most of the time. Find somebody to help you at Walmart. I always get a kick out of the parking space at the Halifax Walmart thats reserved for the employee of the month. I'm wondering which employee is paid enough that works for Walmart so they can afford to park a car in the emloyee of the month parking space. Buy your gear from a company that pays taxes in Massachusetts and supports the comunity.

And watch out for the dune monsters!