Tied selling consists of selling a product with the certainty that another product will be bought when the first one is sold. They are conditions of the manufacturer or the product they demand to complement the quality, reputation or good use of the goods or services that it commercializes.
Typically these are complementary products or services, that are related to each other or that help to improve the quality of the products that have initially been purchased.
You have to be especially careful with tied sales that some companies require from some distributors or end customers. Many times, the company's strategy is to try to sell a product through another market that has nothing to do with the initial market.
If this happens and things work out, the company can remove customers from its competitors, creating company exits from the market and creating barriers at the entrance of new.
Therefore, it is important to know what are the conditions that must be met for a tied sale to be called anti-competitive. We comment on the most relevant data:
- The company that carries out this strategy must be dominant in the market for the product that ties another
- The strategy may distort the market because the affected segment is significant and / or competitors cannot survive if they do not sell their products to the market.
- The strategy is not justified for efficiency reasons
- The products that require you to buy one and then another are different from a technical point of view, as they are not usually directly related (and much less in the market)
- The consumers must be forced to buy the two products tied