Legal Question in Business Law in Utah

biz ethics

Im wondering if it is legal to sell product to customers at cost(what the store has paid for them) if they have agreed to some sort of a membership fee? I know that it would undercut other businesses, but with enough memberships I think the company could still be profitable. I just dont know if selling products for anywhere from $5 to $250 dollars cheaper is ethical or even legal. Any help would be great.

Thank you for your time

Derrick


Asked on 9/29/03, 9:59 pm

1 Answer from Attorneys
Mel Larew

Re: biz ethics

Hello Derrick,

Yes, it is legal and ethical to sell products at cost (or at any price, even lower than the competition -- it's the American Way!). Costco and Sam's Club operate close to your model. You may want to look at some brief survey of federal and/or state antitrust laws. These laws deal with the free market and competition, including pricing.

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Answered on 9/30/03, 2:16 am


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