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View Full Version : Recent Lime & Violet Podcast - Price Fixing


CateKnits
09-23-2006, 04:59 PM
I was just wondering if anyone who has listened to the most recent episode of Lime and Violet had any more information about which yarn companies are engaging in price fixing. I would really love to know and I'm not sure how to go about finding it.

For anyone reading this who hasn't heard Lime and Violet, you should check them out! They're hilarious when they're not being serious, like this time (and this episode did have many hilarious moments, too).

Vendie
09-23-2006, 05:04 PM
I think this will turn into a very interesting topic of debate. I'm very curous what the outcome will be. Part of me is very angry about it and part of me understands why it happens so I'm not really sure I agree with what's being said. I don't think anyone has an all inclusive list of the companies engaging in "keystone pricing" yet. They mentioned Tilli Thomas, Cascade, and Lorna's Laces (which makes me very sad).

CateKnits
09-23-2006, 05:05 PM
I haven't decided how I feel about, either...which is why I'd love more information (not just a list of who's doing it and who isn't).
If you go to the blog for sarahsyarns.com, though, it says Tilli Tomas isn't doing it anymore?

kemp
09-23-2006, 05:20 PM
Unfortunately there are a lot of yarn companies that either say you must price at a certain point or STRONGLY frown upon discounting. They want to keep LYS in business but with the world going the way of the web, I'm not sure that's reasonable. Strange that would come up right now...I just wrote a blog post that talked a little about that.

Scathach
09-23-2006, 06:57 PM
I love that Lime and Violet brought this up, I had no clue this type of thing happened. I will definately spend my money elsewhere (sob... I love my Lorna's Laces though... bye bye favorite sock yarn). I just can't call myself an American and buy from companies that price fix their merchandise. Darnit... Cascade is on that list too isn't it... oh poo. Well until things change with these companies they will not be getting my money. Period.

aineepooh1
09-23-2006, 07:13 PM
Pardon my ignorance.. but what if price fixing?? :shrug:

Andrea
09-23-2006, 07:15 PM
I still have to listen to that one, but in the most recent Cast On podcast, Brenda Dayne talks about it too...

I don't think I understand the whole concept. For this sarahsyarn for example, is she paying Tilli full price for the yarn, then selling it for less (so basically Sarah doesn't get a profit? :?? ) In that case, I don't see the problem with selling normally high priced yarn for lower. Otherwise, I'm not sure if I know enough to have an opinion... :shrug:

I did notice that at I paid a $2 difference for the same Austermann sock yarn at 2 different YS by me...not cool...

CateKnits
09-23-2006, 07:32 PM
It's basically this, if I understood correctly: The yarn company wholesales their yarn to a yarn shop for x amount of dollars and then demands that the yarn shop sell it for y amount of dollars or more, or they will no longer sell them the yarn. In the example in the podcast, it was Tilli Tomas yarn telling sarahsyarn.com that they must sell their yarn for twice the wholesale price or they will no longer sell yarn to their shop. This is illegal because it keeps the prices artificially high - in a free market, if you can find a way to sell something for less than your competition and make profit, good for you!

ann in ma
09-24-2006, 11:41 PM
I'm not in the industry, but I am familiar with this form of pricing ... so, some clarification.

It's not price fixing, and it's not illegal. (I still don't like it, but they are not breaking the law).

Price Fixing is when 2 competitors get together and agree to price at a certain level.

In this instance, it is the manufacturer prescribing a Minimum Price. If the retailer does not agree to sell the products at the minimum price, the manufacturer may legally stop doing business with that retailer -- as long as that policy is in place for all other retailers in the same "class of business."

And there's the rub ... a manufacturer may distinguish between brick & Mortar stores and online businesses. AS long as they treat all retailers in the same class equally, they are not breaking the law. So if they will no longer sell to Sarahsyarns because she was selling at a lower than minimum price, they must enforce that policy with all other internet stores -- but they can allow brick & mortar stores to discount, because that could be considered a different 'class' of retailer. As long as they allow *all* bricks & Mortar stores to discount, they are in the clear.

though it's a new thing for yarn, it's been happening for years in other industries -- do you ever see Apple products discounted? You may see some creative ways to get around the fact, such as offering free shipping, or a Target gift card with purchase, but the Apple products are never discounted independently of Apple announcing a price cut.

Mostly, the companies do it to protect the integrity of their brand, or to protect their large brick & mortar retailers. I'm not sure why these small yarn companies would be engaging in such practices.

Ann

janelanespaintbrush
09-25-2006, 06:07 AM
Don't Denise interchangeables have a minimum price? I don't recall anyone calling them underhanded because of it. I guess I don't understand why this is necessarily evil, unless all the yarn companies are getting together to conspire to keep prices artificially high. I can't say I like it because I like my bargains, but I'm not sure I see it as an immoral or even unsavory business practice, or un-American, for that matter. Am I missing something here?

Nikki
09-25-2006, 08:15 AM
Which I suppose is why we all love KPs.
Nikki

kellyh57
09-25-2006, 10:50 AM
I think it's fine. It's probably the reason that Wal-Mart doesn't sell the quality yarns too. They can't price them lower than everyone else. Would you think the yarn is that special if it was $2.50 a hank? If someone wanted to lose money on one of these yarns and gain somewhere else by pricing it low, you'd probably look at it and say it's cheap and not buy it. (Having not looked elsewhere or done any research on it first of course.) I do have issues with Wal-Mart and what they do to small retailers....(but I still shop there to save money...what can I say?!)

Kelly

CateKnits
09-25-2006, 11:32 AM
I'm still not sure how I feel about it, especially with the clarification (thank you, Ann...I was just going by what they told me :oops: ).

CarmenIbanez
09-25-2006, 01:13 PM
I think it's fine. It's probably the reason that Wal-Mart doesn't sell the quality yarns too. They can't price them lower than everyone else. Would you think the yarn is that special if it was $2.50 a hank? If someone wanted to lose money on one of these yarns and gain somewhere else by pricing it low, you'd probably look at it and say it's cheap and not buy it. (Having not looked elsewhere or done any research on it first of course.) I do have issues with Wal-Mart and what they do to small retailers....(but I still shop there to save money...what can I say?!)

Kelly

In some cases price fixing is meant to hurt the consumer. In this case, like mentioned by kellyh57, it is because these companies make stores charge a certain price above wholesale, that they are protected from the big box stores like Wal-Mart. The entire way that Wal-Mart puts people out of business is by either negotiating a lower wholesale price based on volume OR they simply charge less than any independent store can afford to charge. It protects the yarn manufacturer from being seen as a "discount" brand. It also protects LYS's from being put out of business by huge stores that can afford to charge less per piece.

Some of you are absolutely right, this is not free market policy. But we don't have a free market. We don't have anything close to a free market, so that point is kinda moot. Pretty much every industy is regulated in some way, either by being subsidized by government, or being subject to laws that protect workers, or consumers or both. In a free market, there wouldn't be minimum wages, or tariffs or taxes or even anti-competitive laws.

BLAH BLAH BLAH. Who put the quarter in me?

Julie
09-25-2006, 02:25 PM
I think (and I could be mistaken) that part of the issue with sarahsyarns and Tilli Thomas was that they never told her that there was a minimum recommended price -- they learned what she was charging and told her that they wouldn't sell to her any more. Minimum pricing doesn't irk me, but not being upfront about it seems really careless...they're sure getting a lot of bad press. :shrug:

CarmenIbanez
09-25-2006, 03:27 PM
I think (and I could be mistaken) that part of the issue with sarahsyarns and Tilli Thomas was that they never told her that there was a minimum recommended price -- they learned what she was charging and told her that they wouldn't sell to her any more. Minimum pricing doesn't irk me, but not being upfront about it seems really careless...they're sure getting a lot of bad press. :shrug:

I suppose THAT is a horse of a totally different color, yes?

gimmesanity
09-25-2006, 04:37 PM
I agree with Carmen...this isn't price fixing. Companies like Lorna's Laces and Cascade demand a minimum price to protect the businesses who supply them. It also protects the image of the company. LYS have enough to deal with, competing with on-line stores and discount super-marts is not something that they could handle.

I don't see it as wrong - sucky, yes. Of course I'd rather pay less for my yarn (or any product, for that matter.) However, if my extra dollar goes towards supporting a small business, or an organic produce grower, or a work a home mom, etc, then I think it's an extra dollar (or two) well spent. This is why I avoid the Wal-Marts of the world, and I try to buy my produce from local growers.

(btw, I'm supposed to writing a paper on the Ottoman Empire...um, isn't there a forum here on reforms of the Empire?? :shrug: hehe.)

BinkyKat
09-25-2006, 09:16 PM
(btw, I'm supposed to writing a paper on the Ottoman Empire...um, isn't there a forum here on reforms of the Empire?? :shrug: hehe.)
All I know is, it's not about an imperialistic footstool... :doh:

I bought some Tilli Thomas yarn, should I feel guilty? I will have to educate myself on this topic, very interesting...

Amber
09-25-2006, 11:04 PM
All I know is, it's not about an imperialistic footstool... :doh:

It's not??! :?? I knew I should have paid more attention in history class! :teehee:


I'd not heard about the minimum price thing before, but it makes sense. And, if it really and truely benefits LYS, I'm all for it. Not that I don't like getting a good deal, 'cause I do. I really, really, do. But, I'm with Sharon in that I'm willing to pay a bit more if it benefits a small, local business person.

I've actually worried about this with Knit Picks, but from what I've read/heard so far it seems like they're a good company. And, if someone comes along with information to the contrary I shalll cry many, many tears. :waah:

Andrea
09-26-2006, 04:56 AM
Is it bad that I'd still like the "ok" from my DH to spend the $$$$ on TT yarn for the Simple Knitted Bodice?...see why I don't like political/gov't/free trade stuff? I still buy it even if they are immoral. It's the same reason I still go to my LYS even though I HATE HATE HATE HATE the owners of it more than anyone in the world. I still love the yarn in the long run :pout:

CarmenIbanez
09-26-2006, 11:30 AM
No no, it's fine to do whatever you want. You shouldn't feel bad that you are just DESTROYING the entire WORLD and ANY CHANCE for ANY KIND of future for ALL OF HUMANITY!!!!

Seriously, though. It's YARN. That makes all socio-financial-political-governmental-religious reasoning MOOT!

:teehee:

Andrea
09-26-2006, 05:26 PM
:muah:

CarmenIbanez
09-26-2006, 05:31 PM
:muah:

Well, and of course, Kisses Make Everything BETTER! :teehee: