Thursday, 12 June 2008

Massage Chairs - Understanding Massage Chair Manufacturers and Retailers

This article is intended to give consumers a flavor for what happens behind the scenes in the massage chair world, on both the manufacturing and the retailing side. Understanding those relationships allows consumers to make the most informed decision and to save money. Let's start with the manufacturing side.

First, the basics. Massage chair sales are highly competitive, and only the most aggressive and consistently well-priced manufacturers can survive. Further, massage chairs occupy a very small range of technology that is very densely-populated with innovative ideas. Consequently, the patents obtained by the manufacturers are often closely related, and their protection is crucial to the manufacturers' long-term well-being.

In our experience, these facts result in a level of competition that is unmatched in most other industries. Manufacturers are keenly aware of what their competitors are doing, and they are constantly trying to out-maneuver "the other guy." This can take the form of trying to pirate competitors' ideas (infringing on patents) or the reverse, attempting to draw one's own patents exceptionally broadly and making claims against other manufacturers when their ideas come anywhere near one's own patent-protected innovations. Litigation is the inevitable result.

This competition can also take the form of bad-mouthing the competition with retailers. "The problem with X manufacturer is that his chairs don't A, B, or C." Or the ever-present, "Yes, but his warranty is only Z years long. How can you trust somebody who won't stand behind his chairs?" Of course, this is only natural in a capitalistic world, but the disparagement seems to be exceptionally bitter in the massage chair world.

What does this mean to consumers? It means you have to be exceptionally careful when you read what one manufacturer says about another. The best approach is to find a non-biased third-party review, either from somebody who does not sell massage chairs, or from somebody who sells many different kinds.

It also means one should be careful researching the quality of the manufacturer. As I noted, only the strongest manufacturers can survive in this competitive industry. Consequently, one should seriously research not only the chair he intends to purchase, but the manufacturing company itself. In the world of internet sales, looking into a manufacturer is easy. Simply go into Google and type in the name of the manufacturer and a couple accompanying words (one at a time). For example, searches for "Human Touch massage chairs and share price" or "Premier Health Products and patent" might turn up the kind of information you need. (I use these names just as examples and not as recommended searches.) You might also look at "Omega massage chair and dispute" or "Homedics and financial report." You want to check into whether these companies are financially healthy, since a long warranty period is worthless if the company is no longer in business when you need the warranty.

Now, what about the retail world of massage chairs? Again, a little insight into retailers' relationships with manufacturers can really assist consumers make good choices.

For example, understanding MAP policies can save buyers hundreds of dollars. MAP stands for Minimum Advertised Pricing. It is the price below which retailers are not allowed to advertise. Let me explain. A retailer may purchase a massage chair for $3,000, but the MAP may be $4,000. Manufacturer Suggested Retail Price may be $4,999.99. The retailer is not allowed to advertise the manufacturer's chair for less than the $3,000.

Most manufacturers in the massage chair world are dead serious about MAP. Human Touch is especially vigilant about making sure no retailer sells for less than MAP. Why is this so important to manufacturers? Because it's important to retailers. A retailer, especially an online retailer who has no brick and mortar overhead) is sometimes motivated to move a lot of product (whether for cash flow or other reasons). That retailer may not be interested in making much of a profit in the short run. So he may slash his prices, which hurts the other retailers in the industry. If that happens often, those other retailers will be forced to close their doors or curtail advertising and other promotions. While sales for a manufacturer may receive a temporary boost from the undercutting retailer, the long-term result is fewer retailers willing to sell that manufacturer's product.

Our own company has experienced just such a situation. One online retailer was cutting the legs out of the market on a particular line of products by offering them for very little over wholesale cost. Our reaction was to insist that the manufacturer enforce MAP or risk losing our long-term business. This is what manufacturers experienced many times over, and the MAP policy is their answer.

Manufacturers are in a little bit of a quandary, though, because they cannot fix prices, or they risk getting into litigation. Enforcement of a MAP policy entails cutting off retailers who refuse to abide by the rules, and that addresses the price undercutting issue effectively.

So what does this mean for consumers? It means that when a retailer urges you to call and ask for best pricing, you should do it! Even if they do not urge you to call, you should. They cannot advertise a lower price, but they can quite often offer you a better price (or in some cases a package of incentives) on the phone, which does not violate MAP policies.

In the massage chair industry, MAP generally preserves a relatively good margin for retailers, anywhere between 25% and 40% or even more. So retailers will generally advertise right at MAP. (There is no need to ask for a higher price, since the margin is good.) For those who do advertise above MAP, they may be including shipping or some other factor into their pricing, so you should always work all the way through your shopping cart to determine what your bottom line price will be (after shipping, taxes, and any other price factors such as white glove delivery). Do not assume the price you first see is the price you will pay. If you see an advertised price that is lower than everybody else, you should beware, since the manufacturer will catch on at any time, and the chair may not actually be shipped to you.

There is one last thing for you to consider with regard to massage chair retailers. It is extremely easy to put up a website and start selling massage chairs, so you have to be careful not to do business with a fly-by-night operation. Let me give you a few tips to make sure you're dealing with a reputable and solid retailer. First, look online and determine who comes up first in the natural results in the search engines. As a general rule, older sites with an actual history will come up first in the natural listings section, since Google likes older, more-established sites. Do not trust the pay-per-click sections (at the very top and on the right side), as anybody can purchase spots in the top sections of this advertising. (The only exception would be if you are searching for a very specific product and you see exactly what you want in the pay-per-click section and not in the natural results.)

Second, look for a site that provides an 800 number and actually answers the phone when you call. Listen for tell-tale signs of a home operation, such as non-business noises in the background.

Third, look for a well-organized site that has a wide selection. A company that has relationships with several different manufacturers is more likely to have the connections you need when you need to assert your warranty or return a defective chair. We recently experienced a situation where a customer needed to return a damaged chair and called the manufacturer to do so. The manufacturer refused to take the return, despite our customer's pleas. When our customer called us, we were able to use our influence and the weight of our continuing business to insist that the customer be treated fairly. (It required phone calls and finally an e-mail from our vice president to the manufacturer's national sales manager.) You will not get this kind of response from a retailer operating out of a basement and selling just one or two kinds of chair.

I should make one caveat to that statement, however. Premier Health Products only accepts retailers who sell PHP chairs exclusively (along with some Panasonic chairs, with whom PHP has a special relationship). This means that, for PHP at least, the fact that a retailer only carries one or two lines does not mean the retailer is not a professional operation. It just means the retailer has made a commitment to PHP to sell only PHP chairs.

I hope this information has been helpful and that you find success as you search for that perfect massage chair.

Doug Marks writes for which offers a wide selection of massage chairs and other massage products. Visit other articles within this site for massage chair reviews of the Top 25.

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