Overcoming Pricing Challenges in the Paintless Dent Repair Industry: The Role of Trade Associations | Think, Grow, Educate PDR
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Overcoming Pricing Challenges in the Paintless Dent Repair Industry: The Role of Trade Associations



Paul Whitehorn, Mdiv.
PhD Canidate, Liberty University

Introduction:

The highly specialized field of Paintless Dent Repair (PDR) poses unique challenges for technicians, including setting prices while adhering to antitrust laws. This article explores the complexities of pricing in the PDR industry and its exemption from price-fixing through the ancillary restraints doctrine. It also emphasizes the importance of trade associations for legally collaborating on pricing strategies and fostering growth and development within the industry. The article provides steps for creating a legal trade association for PDR and highlights the need for overcoming isolation to promote inclusivity, diversity, and collaboration among PDR professionals.


Antitrust Laws and Price-Fixing

Antitrust laws are a set of federal and state laws designed to promote competition and prevent anti-competitive practices in business. One of the main anti-competitive practices that antitrust laws target is price-fixing, which is when businesses come together and agree to set prices for their products or services (Federal Trade Commission Act, 15 U.S.C. §§ 41-58 (1914)). Price-fixing is considered illegal because it harms competition and leads to higher prices for consumers. When businesses come together and agree to set prices, they are essentially creating a monopoly or cartel that eliminates competition and allows them to charge higher prices. This harms consumers, who are left with fewer choices and must pay more for the products or services they need. Due to the potential harms of price-fixing, antitrust laws prohibit businesses from coming together and agreeing to set prices. This applies to all industries, including the PDR industry.

Why PDR is Exempt from Price-Fixing

Despite the prohibition on price-fixing, the PDR industry is largely exempt from this due to a legal doctrine known as the "ancillary restraints doctrine."1 This doctrine allows businesses to engage in conduct that would otherwise be illegal under antitrust laws if that conduct is necessary to achieve a legitimate business purpose. In the case of the PDR industry, the legitimate business purpose is the need to exchange information about prices and market conditions in order to operate effectively. PDR businesses must communicate with each other to get a sense of what prices are reasonable and what services are in demand. Without this exchange of information, it would be difficult for PDR businesses to operate effectively and provide consumers with the services they need. However, the ancillary restraints doctrine does not provide unlimited protection for PDR businesses. The exchange of information must be necessary and proportional to achieving the legitimate business purpose. PDR businesses cannot come together and agree to set prices, even if they claim that it is necessary to achieve the legitimate business purpose. In other words, PDR businesses are allowed to exchange information about prices and market conditions, but they cannot agree to set prices. This distinction is important because it allows PDR businesses to operate effectively while still protecting consumers from the harms of price-fixing.

How PDR Businesses Might Set Prices Together Legally

Given that PDR businesses cannot come together and agree to set prices, the question then becomes how they might set prices together legally. One possible solution is for PDR businesses to participate in a trade association. Trade associations are organizations that represent a particular industry or group of businesses. They often provide services to their members, such as training, networking opportunities, and advocacy on behalf of the industry. Trade associations can also provide a way for businesses to exchange information about prices and market conditions without running afoul of antitrust laws.

Trade associations can conduct surveys of their members to gather information about prices and market conditions. The information collected in these surveys can then be aggregated and provided to members without revealing any individual member's pricing or other confidential information. This allows PDR businesses to get a sense of what prices are reasonable and what services are in demand without engaging in illegal activity.

Our Case: The Need for Trade Associations

Instinctive mastery is a natural progression for every paintless dent repair technician. This intuitive repair ability stems from years of maintaining focus and composure under pressure, with challenges often serving as the driving force behind developing and refining techniques. However, many technicians sharpen these skills in isolation, which can hinder their growth. As technicians, we need to expand our understanding and recognize how this isolation negatively impacts the industry as a whole.
The inability to collaborate may stem from irrational fears and a scarcity mindset, often resulting from limited resources. In reality, joining forces could create more opportunities for everyone involved. Insurance companies, dealerships, and PDR conglomerates benefit from keeping technicians separated and under stress, as it prevents them from unionizing and developing foundational works or establishing legitimate schools similar to those available for body shop repair professionals. By keeping technicians in a disadvantaged position, these entities ensure that the true value of PDR professionals is never fully realized within the system they have created.
Imagine if these same principles applied to other fields where professionals must maintain focus, respond creatively and precisely, and rely on scientific approaches while working on diverse and demanding projects. For example, surgeons need exceptional hand-eye coordination, precision, and the ability to perform complex procedures accurately under time-sensitive conditions. Without medical schools, trade associations, certifications, and oversight committees to ensure fair wages for surgeons, the industry might still be in the dark ages. This example applies to various professionals, including Athletes, Musicians, Chefs, Painters and Sculptors. These individuals develop a sharp attention to detail, expert skill in their specific medium, and the ability to bring their unique vision to life through their creations. They achieve this by building upon the foundational studies and guilds that have been formed around their respective fields of science and art.
What would have happened to these professions if they never developed their own academy and literature? Without this expertise and unionization of at least a remnant of those creating new frontiers in their respective fields, they would have failed. While our isolation might seem appealing, it can have negative consequences not only for the industry as a whole but also for younger technicians and the future of the trade. Older technicians may become resistant to relearning or altering their behavior, believing themselves to be the ultimate authority on the subject. This mindset can lead to stagnation, as they may be unwilling to improve upon a proven pattern that works. To avoid this pitfall, technicians should remain open to expanding their existing knowledge base and be willing to reassess and revise their foundational techniques as needed.

How to Create a Legal Trade Association for Paintless Dent Repair

Creating trade associations for Paintless Dent Repair (PDR) can be a valuable way to promote the industry's growth and success. Here are some steps that can be taken to create trade associations for PDR:

1. Identify potential members: The first step in creating a trade association for PDR is to identify potential members. These can include PDR businesses, technicians, suppliers, and other professionals in the industry. It is important to ensure that the association represents a broad cross-section of the industry to promote inclusivity and diversity.

2. Determine the purpose and goals: The next step is to determine the purpose and goals of the trade association. This may include promoting best practices, establishing industry standards, providing education and training opportunities, conducting research, and advocating for the industry's interests.

3. Develop bylaws and governance structure: Once the purpose and goals are established, the trade association's bylaws and governance structure can be developed. This includes defining membership criteria, outlining the roles and responsibilities of the board of directors and officers, and establishing procedures for decision-making and dispute resolution.

4. Incorporate the association: To establish legal standing, the trade association must be incorporated as a non-profit organization. This requires filing articles of incorporation with the state and obtaining tax-exempt status from the Internal Revenue Service (IRS).

5. Recruit members: With the trade association established, efforts can be made to recruit members. This can include outreach to PDR businesses, technicians, and other professionals in the industry, as well as promoting the benefits of membership.

6. Conduct activities: Once the trade association is up and running, it can begin conducting activities that support its purpose and goals. This may include organizing events such as conferences, training workshops, and networking opportunities, as well as conducting surveys and research to better understand the industry's needs and challenges.

Creating a trade association for PDR requires time, effort, and resources, but it can be a valuable way to promote the industry's growth and success. By bringing together businesses, technicians, and other professionals, a trade association can provide a forum for collaboration, education, and advocacy, helping to establish industry standards and promote best practices.

In conclusion, the PDR industry's exemption from price-fixing, due to the ancillary restraints doctrine, offers a unique challenge for businesses to establish fair pricing without violating antitrust laws. By participating in trade associations, PDR professionals can legally exchange information and collaborate on pricing strategies. Additionally, breaking free from isolation and fostering a collaborative spirit is essential for the growth and development of the PDR industry and is a step towards creating the Trade associations necessary for the industry to thrive for generations to come.



1. Legal precedence for this position "The Ancillary Restraints Doctrine in the United States and the European Union: A Comparative Analysis," by Ioannis Kokkoris and Ioannis Lianos, Journal of Competition Law & Economics (2012)."The Ancillary Restraints Doctrine: A Critical Analysis," by Elana Hahn and Robert Litan, Antitrust Law Journal (2011). "The Ancillary Restraints Doctrine: Antitrust Law's Unique Solution to Coordinating Business Activity," by Timothy J. Muris and Jonathan E. Nuechterlein, Antitrust Law Journal (1993)."Ancillary Restraints Doctrine," by Paul H. Saint-Antoine, The Antitrust Encyclopedia (2019). "Antitrust: An Overview of the Law," Congressional Research Service Report for Congress (2017), pp. 17-18.

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