AVS Forum banner

Status
Not open for further replies.
1 - 20 of 41 Posts

·
Registered
Joined
·
15 Posts
Discussion Starter #1
can someone please explain to me the utility of "authorized dealers" relative to the end consumer. I am new to the AV world and I am confused. I have been trying to locate a Rotel RMB 1095 from an "authorized dealer" for over a week now and cannot get the amp unless i'm willing to drive 2hrs to "nearby" dealer and pay full retail. what a load of crap!!!


the 3 nearby dealers all quoted me a price at full retail (2000US) and said that "this is the retail price and that is what they are selling for...no discounts". Well, i thought i'd email some dealers in several cities where i have friends that could make the purchase and mail it to me but this time i received no return e-mail or phone calls from any of the retailers (all "authorized dealers")


today my brother and his friends were admiring my new system sans amplifier and asked me which i planned on purchasing. my initial response was "Rotel RMB 1095 200wpc x 5". i was just about to continue w/ all the reasons why i was going to purchase this excellent unit when i thought "#@!# it". i told them about the qenious of "authorized dealers" and how efficient a system it is for providing a product to the end consumer and how out of principle i would never purchase any item sold exclusively through authorized dealers. they all agreed, w/ one friend drawing a close comparision to the utility of monopolies (i.e. Microsoft)


well, to make a long story short, i sat down at my computer and ordered B&K Reference 7250 series II for 1850US shipped (retail 2500US). instant service and a discount to boot...go figure.
 

·
Registered
Joined
·
340 Posts
Here, Here......Price fixing at it's best.....Happy listening.
 

·
Registered
Joined
·
1,598 Posts
Quote:
Originally posted by mother
i told them about the qenious of "authorized dealers" and how efficient a system it is for providing a product to the end consumer and how out of principle i would never purchase any item sold exclusively through authorized dealers.
Umm, you will live an interesting existence living to that creed.


From McDonalds to Mercedes you will find products only sold through authorized dealers....
 

·
Registered
Joined
·
2,803 Posts
I've recently had to grapple with this same issue. Apparently, unless you purchase a Yamaha product from an authorized dealer, you will not have your product warrantied. That is, they won't honor their warranty, nor will they honor any specials that go along with that product.


For instance: The Yamaha RX-V1 has a current special offer providing the customer, of a new product purchased at an authorized dealer, with a free RAV 2000 programmable remote. I called Yamaha and learned that there aren't any authorized dealers of their high end equipment on line. Furthermore he told me that I couldn't have a product serviced if I couldn't produce a receipt from the dealer with matching serial number for the product.


He explains that some products may be "grey market" and they cannot service these in the U.S, claiming 99% of internet Yamaha products are grey market. I asked, what if its a U.S. product, he says that the rule would still apply.


I confronted the merchant with this information. I pointed to their web site's guarantee that they sell "all new, no b stock, all US items warrantied" They told me that they cannot take responsibility for a manufacturer that isn't willing to stand by the warranty of their product. They told me this is not their fault. I suppose I can't really argue with either one of these groups.


I ended up deciding this a too big a risk to take for a saving of 40%. Well, with this Yamaha in particular since there is a known problem with the pre inputs that would require a replacement of the input board, done free of charge for Yamaha "customers". Then there's the possibility of the DPLII upgrade, but that's another story....


In any event, I think it's a shame this is the position some manufacturers take, but I can't say it's wrong. I will however say that one must carefully consider purchases of expensive equipment on the net. I'd do all I can to ensure I understand what I'm getting.
 

·
Registered
Joined
·
813 Posts
I took the chance on my Yamaha HTR 5490. I paid $569 delivered from B and D Online Electronics The Link shows their return policy. (see lines 1 and 2). I emailed them about not being an authorized dealer of Yamaha and they said "At the current time we are not a Yamaha authorized dealer. We can asure (sic) you, however, that the products we sell are the same brand new, unopened, factory sealed units that are sold by authorized dealers. All of our products come complete with all of the USA warranty documents enclosed by the manufacturer."


My unit arrived with the gold Yamaha Factory Seal intact on the box seams. I spoke with my credit card company (First USA) and my Visa Platinum will back me up and extend my warranty by one year. So I felt safe enough to buy from B & D. BTW, the unit arrived last Thursday, less than 48 hrs after I ordered it in perfect condition. The HTR 5490 is an incredible receiver.


Just my .02.


AreBee
 

·
Registered
Joined
·
6,980 Posts
Ahhh, the topic arises again. I must commend that at least in this case we have things in some perspective with good examples.


Previously I have been able to just sound-off on the topic as I was only designing, installing, and using systems having had experience in retail. Now that I am developing a product line to address the home theater market, I myself have had to start making the tough decisions of who we can best serve and how. A wise decision would likely be to bite my tongue (unplug my keyboard?) as any PR manager would likely inform me, but OH WELL, here goes:



Distribution is a vital aspect of selling any product. Efficiency is just as important here as volume is. No matter which way you work it, whomever is providing service and support to end users or installers needs to be compensated, and someone or some combination of people need to have the time available for this. A company must decide how they are capable of providing the above services. This final decision will vary depending on the nature of the products which are being sold, and the capablilities and capacity of the manufacturer.


It is an unfortunate situation where any decision made here will undeniably not be the ideal arrangement from the perspective of some customer. A manufacturer must evaluate the benefits, detriments, and costs and potential lost saled involved in the options available to them. As is often said, you cannot be everything to everyone.


So now let's examine the first situation "mother" explained above. What we should note is that he was obviously offered more than a few avenues to purchase the amplifier he wanted. He wasn't offered the price which he feels is fair. What disturbs me is that the complaints are only that the price isn't discounted from suggested retail, NOT that the price is actually too high. Think about that one...


Due to marketing efforts, and years of seeing the words SALE! and DISCOUNT plastered on our television screens and in storefronts, the general assumption is that retail prices are a pre-determined thing, which are set at the high end relative to what is delivered. Most don't realize that each product line has a somwhat different pricing structure. Some would probably be suprised to know that many of the products which are sold in the larger retail chains can often contain more profit AFTER a 10% discount than some of the less rediculously priced "hi-fi" gear! Is it a conspiracy? Sure, but the retail buying public demands it, and even searches it out.


An interesting consideration is what would happen if one of the major manufacturers sold in the Tweeters, Sound Advices, Good Guys, etc. of the retail world, suddenly discontinued all of their products, and introduced a new lineup, with an across the board 15% lower retail price by not lowering their cost, but by simply lowering the "suggested retail." While these products would likely appear to be great values on the sales floor, how many consumers unfamiliar with the product line would be satisfied paying full retail, as the MSRP was designed to eliminate the need for discounting? There are products presently on the market which fall in this category, and they constantly fight an uphill battle with consumers when the actual motives are to reduce stress in the process. Go figure.


What gets more interesting is when we look to direct sales internet manufacturers like SVS or even AV123 where the Swans Diva line of speakers are sold. While paying retail price in a store seems "unthinkable," we generally don't see many discounts for such direct products. Fortunately both products have been percieved by end users to provide a great performance for the retail price. Remember, though, this is only a perception relative to past experience with somehow related retail products. The consumer has little way of knowing how much better of a deal they are really getting compared to the absolute lowest pricing which would be possible, and they won't know until someone else comes to market with a closely competing product with similar distribution.


Getting back to the topic of authorized dealers, if a manufacturer cannot oversee the installation of a product by being the end salesperson, one would hope that the person selling the product is capable of determining if the customer has realistic expectations and an appropriate application for the product. If sales are not done direct, the only "gatekeepers" to avoid such confusion is the dealer. As many have identified with their experiences here at the AVS Forum, all retailers and installers are not created equal.:rolleyes:


Using an example which has come up more than a few times here on the Audio & Hi-Fi Forum, many have gone home expecting their combo of these big, beautiful, PSB Stratus Gold-i loudspeakers to be driven to live or refference levels by their brand new reciever which just recieved rave reviews in all the magazines.... and do so in a 6,000 to 10,000 cubic foot room. Sorry, no go, no can do, just not possible. Now is it the fault of either manufacturer when the reciever goes into protect mode? In most of these cases, which product gets the bad rap, and is it really not performing to what it was designed to do? Personally, I don't want the salesperson who sent this combo home without ample caution or warning to be selling our products without some serious additional training.


Our professional sales have similar stories. Our BassTech-7 subwoofer is a rediculously powerful subwoofer for large venues(only 7 have garnered complaints from 7 miles away at outdoor venues), particularly when arrayed in groupings. The motor which drives the system is powerful enough to tear the cones apart if actually asked to, and has it's own limitations. A skilled professional can easily assemble a system to avoid such catastrophies and maximize the benfits of the subwoofers, and will save a great deal of money as compared to if we needed to take such protective measures on our own. So should we not provide the value we can offer to professionals to allow sales to a greater public? As a skilled professional myself, I take offense to such measures presuming my incompetence. This is a prime example where I would shudder at the thought of a BassTech-7 system getting sold to a large club who found a good deal on them but have no clue as to what they are or can do, and were not screened or aided by the seller. Take a guess who gets the call when they destroy something?


As these two examples very clearly demonstrate, some degree of control is often required to maintain the integrity of a product. So don't think of "authorized dealers" so much in the light of having an exclusive, but rather as being selected by the manufacturer. That said, you can definitely learn a lot about a manufacturer by examining the dealers they have selected.


"...and that's all I have to say about that." -F.G. ;)
 

·
Registered
Joined
·
2,173 Posts
Quote:
Originally posted by mother
can someone please explain to me the utility of "authorized dealers" relative to the end consumer. I am new to the AV world and I am confused. I have been trying to locate a Rotel RMB 1095 from an "authorized dealer" for over a week now and cannot get the amp unless i'm willing to drive 2hrs to "nearby" dealer and pay full retail. what a load of crap!!!

Warranty repair work.

Actual correct information from salesmen. (if not, pick someone else or discuss with manger)

Real A-stock goods with original serial numbers.

Local support. (I'll admit 2 hours isn't very local, the nearest Legacy dealer to me is 2 hours by PLANE!)


You must remember this really only applies to 'good' brands. Rotel is small. Sony is huge and sold everywhere, with a (poor) measure of quality in product and service. Sony doesn't have this problem since their stuff is low-end anyway. Just maybe Rotel is worth the extra effort and cost.
 

·
Registered
Joined
·
287 Posts
Hi Spiky and fellow enthusiasts,


You make some good points in an ideal world situation. We do not, however, live in an ideal world. Sadly too many dealers exploit the situation to their ends leaving us customers short changed.


Let me give you an idea of where I'm coming from :-


Quote:
Originally posted by Spiky



Warranty repair work.
What guarantees do I have that they will be any better than buying a brand from a dealer that does not use an authorised dealer network?

Quote:
Actual correct information from salesmen. (if not, pick someone else or discuss with manger)
In an authorised dealer scenario what incentive does the manager have to do something? He's the only guy for 40 or 50 miles with the product line, you want it, so where's his incentive to lift a finger. you either buy it from him or you buy another brand. He's after the fast sale and the easy buck.

Quote:
Real A-stock goods with original serial numbers.
If the goods are not as described that fraudulent. So is using fake serial no.'s so the dealer is operating in an illegal manner. I've never come across this with any product I've purchased or any product I've helped any of my friends buy. The law protects the consumer in any case.

Quote:
Local support. (I'll admit 2 hours isn't very local, the nearest Legacy dealer to me is 2 hours by PLANE!)
Read monopolistic lock in. You can't go anywhere else for the brand, so if you want the brand you must use them or drive a long way out of your way to use another dealer.


Here in the UK the local importers of high end brands use this kind of tactic to protect their high prices. Making sure you can't have an item converted easily from 110V to 240V or making it uneconomic to prevent direct importing so their margin is protected is common practice. Sadly this just means that buyers are a little more careful about the brands they buy and do a bit more research. How easy is it to convert equipment over that's direct imported? How helpful is the manufacturer to the consumer? Who is the manufacturer ultimately responsible to, the end user who buys his product, or the distributor who is a middleman?


There are a few really good dealers. I use one to buy used equipment off because his service is good and his prices are fair, but he can't really do much about the high prices he's charged by the UK distributor. I will not pay over the US price for a product, so I wait for a used or ex demo item to appear at my kind of price. In the menatime I also keep an eye on what I can buy direct in the USA for similar money and make a call based on my judgement.


AV123 has thrown the cat amongst the pipgeons by offering first rate service (just look at the comments on this forum about their support and back up, it's second to none) together with highly competitive prices anywhere in the world. I see this as being the model for high end sales in the future whether dealers like it or not.

Quote:
You must remember this really only applies to 'good' brands. Rotel is small. Sony is huge and sold everywhere, with a (poor) measure of quality in product and service. Sony doesn't have this problem since their stuff is low-end anyway. Just maybe Rotel is worth the extra effort and cost.
I'm afraid we'll have to agree to disagree. Sony can and do make components that will better Rotel in many ranges. Sony, I think, have realised that competitive pricing is a big help for sales. Sony do make high end products. So you are forced to compare retail price Rotel with street price Sony. Given you can probably buy a Sony component with a 30% higher retail price than the Rotel, but buy the Sony heavily discounted, in many cases I'm sure the performance would be closer than you may think.


Regards and best wishes,


Dave
 

·
Registered
Joined
·
2,803 Posts
Arebee,


The scenario I described above would in fact send me a new product, A stock, with warranty papers ect.... However, the Yamaha people told me they would not accept the unit for repair, don't take my word for it call Yamaha direct.


The credit card warranty extention is an interesting twist, that may merit some investigation :)


New spin. I called soundpro.com and asked them if they are an authorized Pioneer dealer. They let me know that they are not. I then asked them about the issues regarding warranty work. They informed me that by law the manufacturer must warranty their product so long as it's a U.S. product sold in the U.S. as new. The representative went further to say that what the Yamaha phone representative told me is not true, but just smoke and mirrors to encourage people to buy from an authorized dealer.
 

·
Registered
Joined
·
813 Posts
Panama,


I heard state laws may be able to protect you too. I'm going to look into that with my brother-in-law who is a patent lawyer.


Did Yamaha tell you what their definition of "Gray Market" was? If it's an A-Stock, factory sealed new in the box item, what can be "gray" about it? I may be a little naive on the subject of CE retail so please indulge me. If manufacturers pick who can sell their products as "authorized dealers", you would think that they would only sell their A-Stock factory new units to those hand picked "authorized dealers". Make sense? How do these "Unauthorized Dealers" get their hands on A-Stock new merchandise. If it's stolen, that's not "Gray Market".


And as far as product knowledge goes, that can't be Yamaha's reasoning. I'd like to introduce you to the boob at Sears (Yamaha Authorized Dealer) who told me the Mitsubishi RPTV (55807) that I was looking at had five "color jets" in it instead of the normal three. :rolleyes:


All in all, I figure I have enough documentation to cover my butt (and wallet) :D should something happen. I hope it never comes to that anyway.


AreBee
 

·
Registered
Joined
·
174 Posts
AreBee,

"Gray-market" typically refers to any item being sold outside its authorized distribution channel...typically items intended for sale overseas. This goes on a lot in photographic circles where a distributor in the middle east may sell his stock to a dealer/friend in New York. The items are sealed, factory fresh items, but not intended for sale in the US. Because of distribution agreements, local exchange rates, etc..., the NY dealer is typically able to offer the item at a substantal discount over the authorized dealer's price.


Whether the discount is worth the "warranty risk" depends on the item and what the unauthorized dealer's return/repair policy is. For non-mechanical components (receivers, amps, processors, etc...), if the seller will personally warranty the item to cover DOA or infant-mortality type failures then you're usually pretty safe. I'd be a lot more cautious when dealing with any type of transport, though.


As always, check the seller out before spending any money.
 

·
Registered
Joined
·
2,803 Posts
AreBee,


Yes, Bill is right, this is what they meant by Grey Market. However, they basically were saying A stock Items wouldn't be serviced. The logic being that 99% of online stuff is grey market.


So how does an online retailer get A stock items :) I asked this question myself. Apparently online dealers will get A-Stock inventory from an authorized dealer or distributor direct. The online dealers aren't supposed to do this since there are rules and regulations as to who a dealer can sell to. So in fact it is possible to get A-Stock, just not by means which are within the manufactures contract with the authorized dealers. This is what the online dealer told me, and because that was the scenario they weren't willing to disclose their source for the product because this be a breach of contract by their source.


This is like a broker relationship.
 

·
Registered
Joined
·
203 Posts
This is a debate that appeared on many boards over the last few years. I have been able to find some retailers who sell B&W, Denon, Marantz to offer their products at between 10-15% off. On demos, close-outs I have personally saved almost 50% (in perfect condition). Yes you can save more on the web. Yes, many of the e-tailers will warrant the items themselves (hopefully they will be around if a problem occurs during the warranty period). It is not true that any company must warrant an item for repair that it manufactures for sale in the US. The company has the right to control the distribution of their products and the warranty that follows the product. The warranty is part of your sales contract with the dealer from whom you bought the item. If they are an authorized dealer, the factory warranty is honored. It does not matter that the item is "new in the box with blank warranty cards".
 

·
Registered
Joined
·
399 Posts
I think I may have mentioned once or twice that I was in the consumer electronics industry for about 15 years in the past.


I've got a little bit of experience dealing with unauthorized distribution that I will share with you.


The questions being asked here appear to be:


How does product get into the gray market? and Why does it matter to the manufacturer who I buy it from?


Let's start with the first, because it's the easiest to answer.


There are two main ways.


The first way (and you see this mostly with domestic manufactured goods) is that the manufacturer has a couple of smaller dealers out there who want to increase their sales volume to qualify for better terms and discounts. But, their own sales are not sufficient to qualify and (presumably) they are not able to increase those sales high enough due to either being in a small market or being an ineffective marketer.


So, what happens is that they are an attractive target for retailers in other markets, mail order retailers and online retailers who the manufacturer will not sell to because they either overlap existing distribution or do not fit the marketing plan for that product line.


The secondary retailer offers to buy enough product to bump the primary retailer into a higher volume category with the manufacturer, plus sometimes pay a percentage. The primary retailer is happy because there are a lot of advantages to being a bigger customer. The secondary retailer is happy because they can fill orders on a product they didn't have access to. And, the manufacturer is happy for a while because they see a small dealer's sales going up but not so happy if they figure out the reason.


The other way product gets into unauthorized distribution is what I would call the true gray market. You see this mostly with goods that are imported to the US.


This is pretty simple. What happens is that the secondary retailer buys the product from distributors in the country where the product is manufactured (or sometimes other countries where there is authorized distribution).


Often this gray market product is designed for different electrical system requirements (i.e. 100v or 50HZ) or it does not have the necessary government certifications for the US market (FCC, UL, etc.).


Now, the question of why it matters to the manufacturer is a little more complex.


Most manufacturers have marketing plans for their product lines that include control over distribution. Most higher-end consumer electronics sell better when the number of dealers in a given market area is controlled because they require a committment to display and present the equipment properly in order to complete a sale. This differs from other, commodity products, where the key to sales is to have the product sold in as many outlets as possible.


Having marketing plans for product lines and limiting the distribution to those retailers agreeing to adopt the plan puts everyone on the same page and everyone is working together to promote and sell the product. Unauthorized dealers do nothing to support the product and confuse the market by offering for sale something that they are not legally authorized to sell and cannot support. Also, many times they work on a sell-now/get-it-later basis, despite claims that they stock the item and people pay for product that is delayed for delivery until the secondary retailer can find someone to buy it from.


The other part of the equation is the gray market goods and you have to understand a little about how international distribution agreements work.


What happens is that, even though the US company who distributes the product may be called (for example) Yamaha Corporation of America, their relationship with the manufacturer in Asia is that of a distributor and not necessarily the company itself (even if it is a subsidary of the mother company).


So, when the US distributor buys products from Japan, they are purchasing the products for this market and their distribution agreement would normally have some sort of provision for handling service on those products. Note that I said those products, because they only get a service allowance on what they import and not on any other product from any other source.


So, when someone buys a gray market product that was imported from, say, the Japan distributor directly, there is no allowance given to the US distributor to service that item and they have every right to refuse service.


In the case of some companies, like Yamaha, they have taken the stance that the only valid sales of their product are those which have passed through their authorized distribution channels. Yamaha only wholesales their products to authorized retailers and only warrants it to the original purchaser.


(This part is conjecture on my part. I never asked Yamaha exactly how they justify their policy but this is one way it could be done)

If an authorized retailer sells the product out the back door to another retailer, then they are the original purchaser, warranty cards or not. You, would, in essence, be buying the equipment used and not be entitled to any warranty whatsoever.


They have every right to do that, as is discourages secondary market sales and also addresses the gray market problem.


Chances are that none of this will make the original poster feel any better about the questions he asked but maybe it will give you some insight to how products are distributed and why this is done.


Mongo
 

·
Registered
Joined
·
392 Posts
A good deal is a state of mind. Perception is reality. Obviously the dealer didn't demonstrate the value of the Rotel to Mother's satisfaction. A little flexibility helps too. A take it of leave it attitude will make most people leave it. As an aside, I purchased a Rotel RMB 1095 from a dealer in Florida who did build value, offers good service and was flexible on the price. As a result I've bought interconnects, a line conditioner and a remote from him, because he took the time to satisfy my needs.
 

·
Registered
Joined
·
750 Posts
Let's get right to the bottom of it.... These companies love yet hate capitalism!!! They love the fact they can make an item for 250 dollars and sell it to a distributor for 800 and he turns around and sells it for 2000 everyone is happy... Yet the consumer pays an awful lot for a 250 dollar item!!! This whole we will not honor a warranty from a non-authorized dealer is a way of price fixing! This ensures that the distrubtor is loyal to the company and the consumer gets hosed!!! Legally, unless they can prove that you have contraband goods (so to speak) I think the company will have a hard time refusing service for an A stock item even if you got a good deal...
 

·
Registered
Joined
·
38 Posts
Lawyers and corporate greed, the manufactures are guilty of "legalized" price-fixing.

We need better consumer protection laws.

I manufacture electronic equipment and i would not dare to refuse service to customers.
 

·
Registered
Joined
·
38 Posts
Denon is a culprit
 

·
Premium Member
Joined
·
2,468 Posts
How can you call it price fixing when 1 manufacturer sets its price and wants to protect its image & dealer territories ?


Now if Denon & Yamaha & Onkyo & Marantz all got together over a friendly bottle of whiskey one night, and ironed out some global pricing strategy, than that's something different.


A big manufacturer makes a product and spends a tremendous amount of money is engineering, advertising, distribution, and establishing a dealer base. It is not unnatural for a dealer to expect some amount of exlcusivity or territorial rights, as there is time inevested in trainging on producrts, and establishing the reputation that we are the best dealer for brand X.


I will elaborate an good point made previously:

No one here is complaing that the value of a reciever X at $MSRP is a rip-off. People just can't sleep at night knowing that 3 states away, someone is selling it for $100 less. Get over it, and buy from a reputable lcoal dealer. If you plan to keep a product for a few years, then whats is a little $extra to have the benefit of a local authorzed dealer for all the good things they can do for you. If you a flipping gear every-year, then "youz gotz to pay the price" ... just like cars.


I have bought plenty from my local dealer, then did a bunch of $major used purchases at the used sites. I have re-discovered my local dealer once again, when I eval'd a bunch of centre channels at home ... and he still gave me a generous discount when I bought. I can't get this level of service online.


That said, if a manufacturer won't honour a warranty from a non-authorized seller, then the manufacturer should track down the source of the gray-marketeers, via serial number tracking. However, since they don't do this, they take the other "easier" road by dishonouring the warranty.


- Andy
 

·
Registered
Joined
·
38 Posts
Socialists don't understand capitalism. Products are manufactured based on the wish to make a profit. To cover parts, labour, overhead, etc. They sell this via dealers, or direct or stores and they warrantee (guarantee) the product. The dealers then adjust the price up or down to make a profit over their cost. Registration and serial numbers are used to control warranty abuse. If someone cannot compete they go out of business, prices then increase because of demand, etc.
 
1 - 20 of 41 Posts
Status
Not open for further replies.
Top