Question about price fixing (illegal?)
 

Yea I KNOW, talk to a lawyer, but its 3am, and im not calling any til tomorrow but until then maybe i can find the law myself... or someone here knows.. (US law)

If I sell software, or any item for that matter, and I offer rights to resell it - is it illegal to require the item to be sold no less than a set minimum sales price?

Im guessing - no, it is not.

I cant see why it would be illegal to protect the item from getting 'cheapened' where resellers would sell it wayyy below what it should be sold for, just to make more sales.


I have someone interested in being a reseller of mine but hes telling me Im not allowed to fix a minimum sales price. ...and Ive never heard of that before...

price fixing usually involves in industry as a whole. like the CD companies saying hey, lets not sell any CD's for less than $20, we wont have to compete with each other by lowering prices at all

well i dont consider myself a whole industry... this is php scripts im talking about... Im not selling 'master rights' that allow the persons to do what they wish and even sell their 'master rights' as well... im just allowing people to resell MY product with some controls in place... and so i and the resellers dont have to compete with eachother.

Why do you care how little he sells it for? As long you're getting your money from him, what does it matter?

yeah, charge him your base price. if he only sells it for a penny above your price hes the one getting fucked, not you.

That's what I was thinking.

Example:

You sell your product for $10

Everyone re-sells it for $15, but this one guy re-sells it for $14

Either way, you still only get the same $10, so what difference does it make to you?

well i sell mine for $200 and have it so you cannot sell it lower than $150 PUBLICLY... i dont care if they undersell $150 if its a private offer, like in email or something.

@ brisk: if someone searches the net for the same script and find different sites selling it at different prices, they will go for the cheapest obviously, which doesnt help as opposed to if all the sites were selling not lower then $150... then more sellers have a chance of getting that sale. :2 cents:

anywayz, im just trying to make sure there isnt some law that says i cant have a minimum sales price. If such a law exists whoever made it possible is a fuckwad

It's about branding and adding more value to your product/brand.

Depends. If you own a regional market, you are in trouble.

I think I understand. You sell it to the public yourself AND you sell it through re-sellers, but you don't want the re-sellers to sell it any cheaper than you are selling it to the public.

Am I right?

That is true in some cases, but I don't know if it applies in this scenario.

Price fixing is when management at different companies get together and agree to all keep the same prices on their merchandise being sold so that market forces lose the ability to set prices based on supply and demand.

You can see this when you have a big intersection with a gas station on every corner and their prices are all the same.

Or at retail when electronics stores will all have the same price on an item.

Most companies deny they do this, but if you've been in the corporate world you know it goes on.

so if their is a law against this, lol, do you think it would apply to my scenario - even tho im only one company and i originally dev'd the product?

from your description, what you're doing is all legal.

Price fixing would require you to collude with your competitors or take actions that artificially keep prices high - but if you're selling the same product, yes you can have an agreeement not to sell it below a certain price, most wholesalers do this.. but really in the first place you should be selling it to them at that minimum price so then they'd never sell it below that price anyway

:2 cents:

sorta, but the resellers keep 100% profit... they only pay me a one time fee to sell the product, and an upgrade fee any time i release new features (bug fixes are free)

yea well ive been short term minded with all this -otherwise i would have jus opened an affiliate program...

set a recommened retail price