Can We Undercut Suggested Retail Pricing on our Websites?
I'm in the guitar niche. I purchase most of my guitar gear at a local guitar shop. I told the owner what I was doing as an Affiliate Marketer and suggested that we work out a business relationship. I would advertise his site on my guitar website and he would give me a cut if someone bought equipment from him from the advertisement on my website. He does not participate in an affiliate marketing program, but was interested in working with me.
I thought I could advertise some of his products at under the manufacturer's suggested retail price (MRSP) to draw folks to his guitar shop. But he said that was illegal. He told me that he cannot legally advertise any of his products through any marketing approach for less than the manufacturer's suggested retail price, or he could get in trouble.
I don't know the exact legal position regarding this, but my friend has been in business for more than 25 years and I trust that he knows the legal position regarding this issue. My hunch is that this legal protection has to do with fair competition laws.
My concern is jeopardizing my friend's business. I want to help him, not hurt him. If you are posting any prices for products of a business, or even your own business products, for under MRSP prices, you might want to check into the legal implications of advertising prices below MRSP. This isn't just a legal issue. It's an ethical issue as well.
Please share your thoughts and/or experience regarding this issue. Thanks!