Free Essay on 5 Paragraph Essay Outline Template

Sample Essay on Resale Price Maintenance

Resale Price Maintenance

Resale price maintenance is described as the practice used by manufacturers to set minimum prices for retailers at which they can sell their products. The distributors and manufacturer agree the distributors agree the distributors will sell the products at a specific price (retail price) or above the floor price (minimum resale) or below the ceiling price (maximum resale).

If the reseller refuses to uphold the provided prices whether covertly or openly, the manufacturer has the right to stop the business deal. Resale price maintenance ensures that resellers don’t compete too intensely on price. This is especially true in cases of fungible goods. Otherwise, the retailers worry it might drive their own profits down as well as those of the manufacturer.

Some experts argue the manufacturer might set the resale price in order to keep the retailers profitable and as such, keep the manufacturer profitable as well. There are others who argue that the minimum resale price maintenance for example helps overcome market failure for distribution services through ensuring distributors who make investment in promoting the product of the manufacturer product are in a position to recoup additional costs like promotion in what they charge their consumers.

Often, manufacturers tend to defend the practice of resale price maintenance by arguing it helps ensure fair returns not only for the manufacturer but the reseller. They also claim it helps ensure governments don’t get the right to interfere with their freedom of making contracts without good reason. There are instances when governments are seen to uphold price control. When there is a minimum resale price set on any product it becomes easier for consumers to buy or find that particular product at the lowest possible price.

It is this aspect that makes shopping easier. There are also instances when 2 non-competing sellers set a minimum resale price on any offer and not just on manufacturers’ product. The logic behind resale price maintenance is as follows:

  • It aids in keeping retailers more profitable. Manufacturers also like this as it makes them feel if they ensure the retailers are profitable, the retailers will keep selling the goods.
  • It helps prevent damage price related wars with retailers who want to under-cut one another in the race to reach the bottom.
  • It helps offer support to small retailers unable to buy in bulk so they can remain profitable. For instance small bookshops can benefit from resale price maintenance on books.
  • Makes it possible for manufacturers to reward shops that promote their products by advertising. It makes it possible for manufacturers to make an investment in future products.

Writers at www.assignmentwritinghelp.net can help you buy a high quality essay that is well written and perfectly formatted. We hire our writers after they have proven they have great research and writing skills. Precisely for this reason, you can rest assured the paper you buy is 100% unique.

The quality assurance team and editors will ensure that each paper is carefully proofread before it is sent back to you. With us, you can rest assured your grades will improve because we have a commitment to help you achieve great academic success.

Whether you have a difficult essay topic or you urgently need your paper delivered within the shortest time possible, you can trust our writing service!

Posted by:

admin

Related articles

list of articles

Categories

RSS RSS FEEDS

  • Sample Essay on SWOT Analysis of The Home Depot January 20, 2016
    SWOT Analysis of The Home Depot SWOT analysis of The Home Depot is among the best tools used by the home improvement retailer to gauge its ability to stay afloat and profitable in the market. Although it is considered the largest home improvement retail chain in the world with an estimated revenue base on more […]
    admin

ARCHIVES

Latest News From Blog

Check out Our Blog's assignment samples and tips on how to Write Assigments
Essay sample on the Effects of Cold War on Soviet Union..

Effects of Cold War on Soviet Union The Soviet Union was one of the main participants in the Cold War. It was engaged in the war with the USA and - See more

Essay sample on Effects of Cold War on Asia

Effects of Cold War on Asia Tensions of the Cold War began shifting from Europe to Asia in 1949 when Mao Zeodong proclaimed the birth of the ...Read More

Sample Essay on United Kingdom Healthcare System

United Kingdom Healthcare System United Kingdom healthcare system, also known as the National Health Service was established...Read More

Back to Top