price fixing??

Discussion in 'Lawn Mowing' started by Brianslawn, Feb 23, 2006.

  1. Brianslawn

    Brianslawn LawnSite Silver Member
    Posts: 2,004

    lets say only you and 3 other companies offer a certain service or product in your area. all four companies are friends and help each other out in emergencies and so forth. you and other three companies get together and decide to set a minimum charge for your product or service that is higher than anyone else in country charges. you each can charge even more if youd like, but none of you will go below that fixed minimum. service or product is in high demand and no one else offers it in area, so customers pay the unusually high price for it without much complaint.

    is anything wrong with this type of business strategy or is it pure supply and demand economics. the service or product is considered a luxury, and customers are rich, so no gouging of old ladies on medicine is taking place. :confused:
     
  2. Luvs2Play

    Luvs2Play LawnSite Member
    Posts: 246

    It seems to be common in smaller towns around here. Maybe it's a good thing, the customer is probably paying what the service is worth. On the other hand, the oil companies were getting over $4.00 per gallon, IMO we weren't getting a fair deal.
     
  3. oasislawns

    oasislawns LawnSite Member
    Posts: 22

    I am pretty sure this is illegal. I am a business major doing lawn work part time and I believe I remember learning in one of my classes this is illegal but I am sure it goes on in many different types of business so as long as you don't get caught:) I guess it does not matter. I don't think anyone is trying to hunt down a few lawn companies for price fixing but at the same time I would not tell anyone what I was doing.
     
  4. work_it

    work_it LawnSite Senior Member
    Posts: 976

    So far it sounds like Luvs2play and oasis (Greg) hit the nail on the head. Price fixing is illegal, but you have to be caught. Even if you're caught the burden of proof would be on your accusers shoulders.
     
  5. K.Carothers

    K.Carothers LawnSite Bronze Member
    Posts: 1,124

    ...or posted on this site.

    btw, it's 100% illegal.

    kc
     
  6. Brianslawn

    Brianslawn LawnSite Silver Member
    Posts: 2,004

    again, hypothetical situation based on what oil companies are doing with the help of bush. just wondering if its right or wrong, or if it can apply to the mowing business.


    i know gouging in time of emergency is illegal, but what about a luxury item?

    i spent $4.00 for a hot dog and coke in hilton the other night for the iowa state game. thats more than i would spend at a fancy restaurant. was that illegal price fixing since all vendors were charging same high price?
     
  7. Tinkerer

    Tinkerer LawnSite Senior Member
    Posts: 620

    My last year in Rochester Mn I called a bunch of the other lawn services sometime during the mowing season wondering how they were making any money and suggested everyone stop charging just $17 for the average lawn (1994). It was pretty much deaf ears on the other end. Now if its a general and acceptable minimum charge say $30 per lawn, I don't think thats wrong. But if all 4 guys decided to charge $60 per lawn mowing minimum in average little town,,, then I think there might be a problem. Now and then contractors get into trouble for price fixing on projects for roads or something for the goverment. I don't think that would be pretty to be convicted of something like that.
     
  8. Richard Martin

    Richard Martin LawnSite Fanatic
    Posts: 14,700

    This is a different situation. It's okay for a hotdog salesman to take a walk and see what the next guy is charging for hotdogs and then raise his price to match it. It a whole seperate thing for businesses to sit down and conspire to and then set a minimum price.

    I'm very good friends with 2 other lawn services in my area. We have lunch together, sell equipment back and forth etc.. We do talk about pricing but it's more along the lines of an individual piece of property like asking how much would you charge and stuff like that. It's an advice type of thing you know, just like we do here at Lawnsite.
     
  9. ArkansasLawns

    ArkansasLawns LawnSite Member
    Posts: 93

    Brianslawn

    Just what is this service or product that you provide? How much are you charging for it?

    Hypothetically, of course
     
  10. Green-Pro

    Green-Pro LawnSite Bronze Member
    Posts: 1,420

    Brian heres some info on price fixing from the Fair Trade Commision.

    http://www.ftc.gov/bc/compguide/illegal.htm


    I'm not trying to advise you on this practice, but would advise you on another related issue:

    Be sure to pack your "bullseye" underwear before arriving at the Federal lockup :laugh: :laugh: :laugh: :laugh:
     

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