[earlmarc]

What are your expectations of a audio manufacturer to service their products if their products are purchased from an unauthorized dealer in the grey market? Should manufacturer or manufacturer representative offer assistance if their product is defective, even though purchased through the grey market? How far if at all should a manufacturer extend themselves to assist with a defective product purchased in the grey market? I'm just curious about others' opinions on this subject.

My thoughts are that if an audio manufacturer with retail representation offers to service a defective piece purchased through the grey market (usually at a reduced price), then they are counter-productive. They hurt their retail representatives because no one would pay full retail price, especially if they could get their product serviced after purchasing through the grey market.

[markC]

My opinion is that unless you purchase from the manufacturer or a bonified representative, you should not expect warranty.

[earlmarc]

Interesting read from 6moons on the subject:

http://6moons.com/industryfeatures/service/service.html

[MaxCast]

My opinion is that unless you purchase from the manufacturer or a bonified representative, you should not expect warranty.

I agree.

Where do all these gray market pieces come from?

[ZLS]

  I would go one step further.  If I am a legitimate manufacturer or retailer, I must consider the type of person who would purchase "Grey Market" goods.  If I tried to repair an inferior or shoddy product; all I may be doing is giving that person someone to sue. 
    There is an old adage that is even more true in this age of internet transactions.  "If a deal sounds to good to be true; it usually is"

[Digi-G]

Good question MaxCast.  Ditto.  Where are the people reselling these items at such good prices getting them to begin with?  Obviously not through authorized dealers, right? 

No, I don't think manufacturers should (be expected to) warrant such products.

[avahifi]

My take on the "grey market" is that it exists simply because of price fixing and that failure to honor factory warranties is simply another way to protect dealers from competition.  If the factory price to dealers is the same everywhere, then warranty costs are built into that price in the first place, and the factory should honor their warranty no matter what the chain of sales has been.

The AVA factory warranty extends to a second owner, with the only restriction that the first owner notify us of the sale to a second owner, to protect against theft.  I cannot understand why all audio companies cannot do this.

Frank Van Alstine

[ctviggen]

I think the companies should be made to honor these warranties.  The bad entity in this regard is the distributor.  The distributor should be sued by the company, but the person buying the good should be considered to be honorous and therefore the warranty should be upheld. 

[woodsyi]

If an item has a serial #, manufacturer must know when it was made.  No matter how the owner got it (except stolen), shouldn't the manufacturer honor warranty within the warranty period if the item is advertised as having transferable warranty?  This was the whole issue going on with Bryston product and I don't know why a consumer should be penalized for the sales practice of the combined factory/distributor/retailer.

[pingong]

Good question MaxCast.  Ditto.  Where are the people reselling these items at such good prices getting them to begin with?  Obviously not through authorized dealers, right? 

No, I don't think manufacturers should (be expected to) warrant such products.

The way, most grey market sellers with Chinese products, operate is simply set up a web page. After they receive the order, they buy from retail stores inside China. They all have people in China. The retail prices inside China are so low, considering the low distribution cost and retail profit margin inside China. They still can make some profit though not much, but they virtually have no cost and leave their customers in the dark for technical support and service. Buyers pay international shipping, import duties and fees. After the buyers receive the item, the sellers just simply disappear.

Grey market kills brand image of Chinese products. It is a big headache for Chinese manufactures. They know that the brand image is more important than any thing else at this point of the game, if they were not aware several years ago.

I think that most people know the existence of Chinese product grey market. They should not buy from there at the first place. If they did, should manufactures still take care of them? If a product were traveling long way back to the manufactures through normal channel with a receipt from an authorized dealer, they will take care of it. If some body just call them or me asking for service without any prove of the purchase, I do not think so. I do not think it is fair for me to take care of a guy bought from the grey market. The grey market kills my business, takes advandage of my investment for ads and go shows, but, for the sympathy, I will still try my best to help any body bought from the grey market for any thing. I had one case so far.

Ping

[MaxCast]

What does it matter who ownes it?  If the product has a 2 year warranty and breaks within that time frame.....fix it.

Where do all these gray market pieces come from?

?? a distributer sells a bunch of xyz receivers to abc sales at a lower price because of quantity.  Now abc sales can sell for a cheaper price than anyone else.  The manufacturer does not like this and tries to combat this by not honoring the warranty??  which gets us back to price fixing like Frank mentioned.

Okay marketing wizzards...why would a manufacturer want price fixing?  Image, status??

[pingong]

Okay marketing wizzards...why would a manufacturer want price fixing?  Image, status??

Hi MaxCast,

Pricing is a very completed issue. Many cases a manufacture sets up the prices for themselves, their global distributors and dealers to survive. It is a tough business. Most people just try to survive. Customers can continue to get the products. We saw many manufactures got bought at very low prices or disappeared, even some big names.

Ping

[MaxCast]

Understood.  It is for the survival of the brick and mortor stores.  This ties in with larger dealers (with cheeper prices) selling out of their territories via internet.

[ZLS]

  Upon further consideration, I believe this discussion is about basic economic models.  What is a merchant selling, and what is a consumer buying?
Let us refine this model even further.  What are the manufactures who participate in the Audio Circle selling?  IMHO what they are selling above and beyond anything else is personalized service.  Product innovation, individualized one on one custom modification, reasonableness of price-all this stems from the fact that person who creates the product out of a passion for the sound will stand by the product in case of any difficulty.  Speaking just for myself this is what I am willing to pay for.  There is a contract between the seller and the buyer.  If you do not think this is true go back over the various posts on AC and you will see that a great majority consist of questions asked by consumers, questions answered, and the resulting experience after a particular purchase.  The concept of price is not synonymous with value.  Grey Market is only selling price.  Remember there is no right without a remedy; any price determination should always include the cost and ease of repair.  After all, no audio component has ever had any problems that needed to be fixed. 
    I may not agree with everything that Mr Van Alstine or other manufactures may post, but I always recognize the passion and integrity behind the statements.  Ladies and gentleman it is that passion and integrity that is worth something to me as a consumer.

[pingong]

  Upon further consideration, I believe this discussion is about basic economic models.  What is a merchant selling, and what is a consumer buying?
Let us refine this model even further.  What are the manufactures who participate in the Audio Circle selling?  IMHO what they are selling above and beyond anything else is personalized service.  Product innovation, individualized one on one custom modification, reasonableness of price-all this stems from the fact that person who creates the product out of a passion for the sound will stand by the product in case of any difficulty.  Speaking just for myself this is what I am willing to pay for.  There is a contract between the seller and the buyer.  If you do not think this is true go back over the various posts on AC and you will see that a great majority consist of questions asked by consumers, questions answered, and the resulting experience after a particular purchase.  The concept of price is not synonymous with value.  Grey Market is only selling price.  Remember there is no right without a remedy; any price determination should always include the cost and ease of repair.  After all, no audio component has ever had any problems that needed to be fixed. 
    I may not agree with everything that Mr Van Alstine or other manufactures may post, but I always recognize the passion and integrity behind the statements.  Ladies and gentleman it is that passion and integrity that is worth something to me as a consumer.

I agree. We all have a passion for music, for the gears we have. The market and reality may not some times be prefect, but the passion stays.

Cheers,

Ping

[PhilNYC]

What does it matter who ownes it?  If the product has a 2 year warranty and breaks within that time frame.....fix it.

A grey market product is a product that is supposed to be sold in a specific geography, where there may be different levels of quality control (which is also usually reflected in the retail price and warranty of that product in that country)...and somehow it is sold on the "grey market" in a different geography.  For example, a CD player which is meant to be sold in the Chinese market might only offer a 90 day warranty, whereas the US equivalent undergoes far greater quality control measures and offers a 1-year warranty because the US market demands that level of service...and is thereby priced accordingly.  So the company that is selling the CD player has planned its business around these parameters. 

I'm not saying that this is what happens in reality all the time, but this is the theory behind it.  In the long term, when global economies become more level, you might expect that warranties and quality control to level out around the world, and then you can say that the playing field is level and service should be provided equally everywhere.  But that's not what happens now.

[avahifi]

I don't understand "different levels of quality control for different markets."

Warranty repairs can be one of the most expensive items for a manufacturer.  Thus it appears to me that the only way to build a product is to make it as durable and reliable as you can so chances are you never have to repair it.  With the automated assembly of most consumer goods, it would seem to me to be hard for a manufacturer to make a deliberately poor quality product for one specific market.  Competition abounds everywhere.

And if a "high end" manufacturer is doing this, shame on him.

As far as parts quality goes, 1 percent tolerance metal film resistors cost less than five cents each in quantity, a unit using 100 of them on represents a $5.00 build cost or less.  Put in low grade resistors, you get the unit back to service because of noise and other problems.  Not a very cost effective process I would suggest.

The real issue is price fixing and manufacturers that don't mind evading their warranty promises, end user be damned.

Frank Van Alstine

P.S. Why do radios in Army Humvees sound so bad?  They are built completely from "military grade" parts.

[G Georgopoulos]

we at GGA loudspeaker and headphone AMPS manufacture to a standard which will be based
on the price of our products, gray markets are there for the purpose of Multinationals which
compete heavily on price in various parts of the world, their aim is to sale at any price and under
various other brandnames

cheers
GGA amps hq-stereo products

[PhilNYC]

I don't understand "different levels of quality control for different markets."

As GGA mentions, the whole issue with grey market goods has to do with big company mass market goods being sold globally.  So we're talking about products that are built in large batches (eg. 10000+ per production run).  There are sophisticated statistical methods of doing batch Q/A testing on these kinds of products...the more reliable you want your batch run to be, the more expensive it becomes to do the Q/A...so in certain markets (eg. China) where they need to get the pricing down to an affordable level, they skimp on the Q/A and reduce the warranty period so that they can price the product low and still make a profit.

I agree that a high end manufacturer should not be making these kinds of compromises.  But I also think there is nothing wrong with doing less extensive Q/A and offering a shorter warranty....there is no one forcing anyone to buy a product with a short warranty, and if the market demands better quality, it forces those manufacturers to find better ways to build and test their products.

[G Georgopoulos]

most mass produced gray market products have quality that appears to be substantial but when
the product brakes down, the cost of repair is so big you wonder about its quality

Cheers

GGA AMps unbrakable and long lasting