Market Feedback Stance on market sale prices above MRP

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Lord Nemesis

Lord Nemesis

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This is somewhat related to a context raised in a previous thread about overpriced Xiaomi phones created earlier.

I would like to know TE's stance on any market sales that are above the MRP? If a sale is for a retail product in its unmodified form and its being sold at a price above the MRP, would such sales be disallowed as its clearly illegal as per the laws of the land?
 
I don't know about the legality of the issue but I am pretty sure it is not illegal. The MRP, AFAIK, is set up by the manufacturer/distributor for the retailer and not for someone selling his personal item, which is what sales like these come under.
Also, IIRC, TE had earlier stated that they don't mind people selling for profit. In earlier cases the same question had arisen for imported phones.
 
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^^

I think you are confusing yourself with MSRP. Pricing over MRP is illegal. Check Consumer Goods (Mandatory Printing of Cost of Production and Maximum Retail Price) Act.

But yes, pricing is upto the seller. Will it sell at that price will depend upon the demand of the item. Like One plus one.

Is it a morally wrong thing to do, I say it is.

Is it unethical, I say it is not. The seller is not doing anything fraudulent. He is selling for profit.
 
I am not sure about applicability of this to private/personal sales, but as far any reselling of retail products by businesses is concerned regardless of how big or small, retail prices above MRP is illegal in India. It is MRP and not suggested retail price in India. A business like a restaurant however can charge for services if they can quantify it as a service charge. That is at least what I know to the extent of my knowledge.

So, next comes the question, how do you define a personal/private sale?

If a person buys one or more units of an item with the intent of reselling them in their original form and at a profit, is it a business or a personal/private sale? I would consider it a business.

Even leaving technicalities of MRP aside, In sales like those of the Xiaomi phones, the extra charge can even be seen of a service charge and there is nothing wrong with that either. But when you are charging people for services, you are again running a business.

So, at best these can be viewed as illegal businesses (just like many of those on ebay) because when you are selling or rendering services for profits, you are also supposed to follow the other obligations of a business like legitimate registration and paying taxes to the govt etc.

If anybody can run a business for profit and portray them as personal sales on a public forum, I don't see why retailer online or offline would go to trouble they do..
Why doesn't somebody like flipkart just setup a forum and just make "personal sales" and just skip all the messy obligations they have as a retailer running a legitimate business.

So, I can only think that if TE is fine with offering its market platform to people whose intent is running a business for profit without the meeting the obligations of a legitimate business, it is only because of our weak legal system and the general apathy and not because its perfectly fine to do so ...??
 
@Lord Nemesis
When a person buys and sells it in the individual capacity, its not a business and hence not illegal. Selling above mrp being illegal applies for businesses only .
There are so many loopholes and ways to bypass the system that even businesses operate by selling above MRP in the name of service.
Overcharging on products is nothing new, we have all experienced it at airports, malls, theaters etc.

There are 2 parties when it comes to selling:

1. Product Manufacturer: They can decide to price the product like they want. An Iphone might cost 100$ to manufacture but Apple can price it at 1000$ or 10000$. Its their decision. But then there are laws of the land and government bodies to keep a check and act as to fairness of pricing & competition so as to not harm the economy of a country. It goes very deep to understand pricing strategies locally & globally.
2. Retailer / Seller: They are provided margins or % from the companies on the selling price to sell. That margin is all they get to operate within.

The reason why retailers dont do a personal sales practice is reputation & legitimacy as a business. Companies wont be where they are financially if just setting up a forum or a roadside kiosk will bring in money. Its the basic model of doing business. You can do it legally as a sole proprietor, partnership or a private limited company. Fact is , its all upon what scale you want to operate on in the present and future and you can always change the model of a business.

Then the issue of nature of transaction for which there are taxes on profit. If there is electronic payment then it can be accounted for by the government on individuals / businesses and levy taxes but if I buy a product in cash from someone and sell it further at a higher rate again in cash, there is no way to track such deals. Thats why you have governments wanting less cash transactions and more accountable transactions which can be tracked.

As far as TE goes, sellers can sell at the price they want but its upto TE users to point out if its way too much or low. General consensus prevails and the impact is seen.
Ultimately, its the buyers who are responsible for this sort of activity. If there are buyers who will buy at any price, there are going to be sellers to sell at that price.
 
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I remember when Canvas 4 was launched by Micromax, it was being sold at 4-5000/- above the selling price set by Micromax. And this was being done by retailers citing high demand and low supply. Was all of that illegal?
 
mrmash said:
I remember when Canvas 4 was launched by Micromax, it was being sold at 4-5000/- above the selling price set by Micromax. And this was being done by retailers citing high demand and low supply. Was all of that illegal?
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Yup it was. But I am pretty sure that the amount on the bill never exceeded the MRP.

And this is how and why forum sales can be termed as personal. Does anyone see a seller providing a bill from their side. I don't think so and hence they can't be bound by the laws governing MRP. How they show the profit and pay taxes on it is the seller's and the IT dept concern.

I have been importing mobile phones and selling them for profit for the past 3 years or so. Earlier, as I wasn't making much, so my CA guy did some jugaads to fill my IT return.
Now since I have taken my business to the next level, I am going to start paying service tax. I didn't know about the intricacies and was just doing it for some pocket money at first while preparing for higher studies.
This is no excuse and I most definitely should have paid taxes before, but there is so much ambiguity regarding such sales, not only here but all around the world. I know this because I had a guy in US who was just like me and he told me that if our transactions crossed a certain no per month, he will have to setup a company and start paying taxes. Under that figure, it was ok.

Coming to my business model, there is a lot of ambiguity. What is to stop me from saying that I bought the phones that I import for personal usd and then after using them for a couple of hours, I decided to sell them off. That way I won't have to pay any service tax. But I actually want to pay taxes and that's why I am not taking that path. Also I am pretty sure, looking at my quantity of sales from next month onwards it will be difficult to convince anyone that I was buying those phones for myself.
But I know of many people who import phones in hundreds and I don't think any of them pay service tax from their profits.

But like I said above, there is ambiguity regarding such sales in every country and every country's IT dept will only get concerned if your revenues are high and trackable.
Most of my sales can't be tracked because I get payment in cash, but since I buy all the phones through my credit card, all of my purchases, hence all of my sales get tracked.
The sellers I was talking about earlier, send payment via Havala and get paid in cash most of the time and they then funnel this cash into some other business. I know this guy in Delhi, who currently has more than 50 G2 available but he never sells online because his sales will get tracked and that means his imports will get tracked where he has a setting. Sellers like me don't have that issue because our purchases as well imports are already tracked.
 
m-jeri said:
This is bullying.
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Its not bullying.
When the majority points out to a discrepancy, corrective step needs to be taken. Be it price or any other factor.
Buy Sell forum works if things remain fair and the majority is involved actively when there is a wrong.
 
m-jeri said:
This is bullying.
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It wont be bullying until you follow the market rules of posting proper source links as per the guidelines. And you still can use the PM route to talk to the seller without all these obligations of posting it on FS thread.

I can see the point you are making here. A little bit of eloboration will avoid any future reference to this when a FS thread goes out of bounds :)
 
Regarding the illegal re-sales of Xiaomi phones everywhere, I had sent a mail to flipkart and xiaomi, here is a reply that I got.

https://www.techenclave.com/communi...r-2nd-for-rs-5999.168291/page-12#post-1976954

"We are thankful to bringing this to our attention.

Please be informed that we have already taken necessary action against customer who is misusing the priority access.

Also, Please be advised that we are working really hard to cut down the rate of resellers".
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So what the people who don't like these sort of illegal sales can do is collect information as best as they can about such sales and send it to flipkart.
 
Lord Nemesis said:
Regarding the illegal re-sales of Xiaomi phones everywhere, I had sent a mail to flipkart and xiaomi, here is a reply that I got.

https://www.techenclave.com/communi...r-2nd-for-rs-5999.168291/page-12#post-1976954



So what the people who don't like these sort of illegal sales can do is collect information as best as they can about such sales and send it to flipkart.
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These sales are not illegal and no one including Flipkart can do anything about it. If we were to believe that these are illegal then selling everything that one bought for themselves at a later date, whether used or unused should be termed illegal.
Once a person buys something, he becomes the owner of that particular object. After that he has a right to sell it at whatever price he/she wants for it and no one can do anything about it. The only thing that comes into play is supply and demand. The only thing that can stop it is govt intervention as happens in cases when there is a man made shortage of goods and we all know how much proactive our govt is in that case.
 
^^ It doesn't work that way. No body would care about taking a retail license or paying taxes otherwise. Everybody can sell stuff they are not allowed to and claim they are personal sales.

When you are sourcing multiple retail units of a item and reselling them in their original mint form at profit using a public channel, they are no longer personal sales. You are running a retail business without the having the necessary authorization from the supplier or licenses to run the business.

That is definitely illegal and Flipkart and Xiaomi can technically take anyone to court and claim damages if they can prove that they are sourcing and reselling for profit though a public channel which is quite easy on those ebay sales.
 
Lord Nemesis said:
^^ It doesn't work that way. No body would care about taking a retail license or paying taxes otherwise. Everybody can sell stuff they are not allowed to and claim they are personal sales.
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Business turnover should be above 5 lacs in one year IIRC for a dealer to be VAT registered. I doubt many people are generating that kind of turnover by selling phones on TE.
 
Wait, by the logic of protest in this thread, prices of rare collectibles and similar items should not go up and they should be re-sold at their original MRP? Suppose I have a watch that is now out of stock everywhere in the world and it is a highly praised piece that is a collectible item, should I still sell it at it's original MRP and not at its current commanding price?

If you can answer that then you will see why this thread is flawed in its premise. There is nothing wrong in selling your retail purchased items at a higher price because you are not running a business here on TE. Come September 20th and we will all see brand new iPhones being sold for 2-3 times their retail selling price. Why is that allowed on a world scale then and a simple minor profit making sale frowned upon here on TE?

If you don't like the price that the item is being sold for, please move on. Or haggle, if that is your thing (and I don't mean it in a bad way).
 
Slightly OT all the original moto g covers Flipkart made available at 199 were OOS immediately and resellers were selling it at huge markups on Flipkart itself , they have not bothered to address that first then talk of te and Flipkart first members selling mi3 on te for a profit , even at lamington road in Mumbai you see shopkeepers selling hardware bought on Flipkart for a profit without removing the labels !
 
Lord Nemesis said:
^^ It doesn't work that way. No body would care about taking a retail license or paying taxes otherwise. Everybody can sell stuff they are not allowed to and claim they are personal sales.

When you are sourcing multiple retail units of a item and reselling them in their original mint form at profit using a public channel, they are no longer personal sales. You are running a retail business without the having the necessary authorization from the supplier or licenses to run the business.

That is definitely illegal and Flipkart and Xiaomi can technically take anyone to court and claim damages if they can prove that they are sourcing and reselling for profit though a public channel which is quite easy on those ebay sales.
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If any big company like Flipkart or Xiaomi were perturbed by this, we would have seen a stop on the sale of imported phones/grey market products a lot earlier as well as they hurt local endeavours of these companies a lot more than these resellers.
You may have a point regarding the legality of the issue but I don't think any company would spend any money or man hours trying to go after these resellers. Their main aim is selling the product and they don't give two hoots about who the buyer is and what they finally intend to do with the product.
In reality, these companies themselves are the real culprits by organising such flash sales and creating an artificial shortage. Xiaomi are known for this approach as then they get to say that our phones were sold in under a minute and create hype for their products and ensuring that each and every piece of theirs gets sold. They have been following this model for years in China and with good effect.
 
Without meaning to offend anyone here , I would like to say that xaiomi and one plus one just create hype and sell phones , else how would they prove themselves any different than micromax , xolo , lava , karbonn , gionee etc . Guys I know all phones are made in China iPhone , Samsung and Nokia but they are of a much better quality than these Chinese players .
 
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