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resale price maintenance

Also called: resale price fixing, minimum resale price

A supplier dictating the price, or a minimum price, at which partners or distributors must resell its product. Under EU and Ukrainian competition law it counts among the most serious restrictions, so it is never a legitimate sales tactic: a supplier may recommend a resale price or set a maximum one, and contract wording should be checked with a lawyer.

Resale price maintenance is when a supplier dictates the price, or a minimum price, at which its distributors, resellers or partners must sell its product on. It is the classic answer people reach for when partners undercut each other or the vendor's own list price, and it is the wrong one: under EU competition law and Ukrainian competition law it is treated as one of the most serious restrictions of competition, with no easy route to justify it.

What remains allowed is narrower and different in kind. A supplier may recommend a resale price, as long as the recommendation is not enforced through pressure, threats, delayed deliveries or withdrawn discounts; it may usually set a maximum resale price; and it sets its own selling price to the reseller freely. Related lines sit nearby: a supplier must not ban a partner from passive sales (serving customers who come on their own), and competitors who also partner with each other must not discuss prices or split customers.

In practice this means channel problems are solved with structure, not price fixing: clear account ownership, deal registration, partner tiers, margins that leave each route a reason to sell, and a choice of partner model (referral or reseller) that fits. This entry is a guardrail, not legal advice; the rules have exceptions and differ in detail between jurisdictions, so any partner agreement with pricing or territory clauses goes to a competition lawyer before anyone signs.

Example

A corporate training agency, which also has its own English trainers, offers to resell Klasna for Teams. It would buy lessons at 640 UAH (20% below the 800 list price), so Klasna keeps 640 − 461 = 179 a lesson. Its letter sets two conditions: Klasna must fix one resale price for every partner so nobody undercuts the agency, and other partners must not serve companies that contact them directly.

Klasna refuses both, because both cross legal lines: the first is resale price maintenance, the second a ban on passive sales. It also refuses to discuss its own prices or client split with the agency, which competes with it on English training. What Klasna offers instead: the agency sets its own resale price, Klasna may publish 800 as a recommended price with no pressure behind it, and deal registration (90 days) decides who works on which company.

The agency also asked for exclusivity, promising 5 deals a year (6,000 lessons, 1,014,000 UAH net for Klasna). Klasna's non-exclusive portfolio of five partners is estimated at 3,332,900, so the exclusive offer would have cost money as well as crossing the line. The draft terms go to a lawyer before signing.

Common mistakes

  • "Not below list price" clauses. A minimum resale price in a partner agreement is the core of the prohibited practice.
  • Enforcing a "recommendation". A recommended price backed by threats, delayed deliveries or withdrawn discounts is treated as a fixed one.
  • Solving undercutting with prices instead of rules. Use account ownership, deal registration and partner margins instead.
  • Talking prices with a partner who is also a competitor. Never discuss your prices or who takes which clients.
  • Treating this entry as legal advice. Exceptions exist and details differ by jurisdiction; a lawyer reviews pricing and territory clauses.

Learn it in the course

  • Partner terms and legal guardrails · Tiered commission, deal registration, a partner marketing fund and conflict rules, plus the lines you don't cross: no fixed resale prices, no ban on passive sales, consent before sharing client data.
  • Case: a training agency asks for exclusivity · A training agency promises more deals if Klasna drops every other partner and fixes one resale price. Score the candidates, price the exclusivity, and counter with terms that are good business and stay legal.