Paradigm price fixing (1 Viewer)

[Matt Odegard]

Paradigm does not engage in any sort of price fixing. They are, however, very protective of their dealer network. Paradigm makes a high-quality product. They want to ensure that this product is sold in locations that know the product, are able to advise the consumer and can provide service if needed.

Paradigm is very, very, very strict on one point - no dealer is to sell product online or through mail-order. The reason for this is to ensure that the consumer knows exactly what they are getting. While I'm sure there are a lot of intelligent online shoppers, remember that is not always the case. This ensures that Paradigm's product is properly represented and that customer satisfaction is high.

I guess I can handle that.

 

[PaulXH]

OK I have a question. I am not a dealer, but I have had not one but two auctions pulled off ebay at the request of Paradigm. I did not use any info or pictures from Paradigm's website, and I repeat, I AM NOT A DEALER. Could someone enlighten me on why and more important how a company can stop a person who bought their product from selling it over the Internet? Please help because I just don't get it!

Paul

 

[Jeff D.]

Now, when you have acompany like Paradigm who supposedly has in their contract with their dealers that they cannot sell their product below msrp.

And let us clear this up right now. Paradigm does NOT do any such thing. I work for a Paradigm dealer and there is no clause in the contract dictating what price we must sell the product at. This is fact, so anyone who thinks Paradigm fixes prices - you're wrong, plain and simple.

/Jeff

 

[Matt Odegard]

Jesus, they don't f*ck around do they!

 

[Jeff D.]

Jesus, they don't f*ck around do they!

No they don't. If they discover a dealer has been selling on the internet and/or mail-order, that dealer is terminated instantly. LOL...well, not _terminated_...you know what I mean...they ain't selling Paradigm again.
/Jeff

 

[MarcVH]

My understanding is that they do, however, dictate some limitations on how discounts are to be offered, e.g. a Paradigm dealer is not allowed to quote a discounted price over the phone. One presumes that the intent is to prevent competition by price among dealers.

 

[Matt Jesty]

If what the dealer told you is the truth, then yes it's illegal. But I think it's more likely that the dealer made that up as an excuse to explain an unwillingness to negotiate price.
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Listen, all the price fixing arguements have been used before against Bose and many others ,who have figured out how to legally word and explain in their dealer agreements that msrp is STRONGLY ADVISED ,now the reason they "say" that they're pulling the line may be otherwise ,but everyone KNOWS it is because you discounted it....If you don't think that consumer groups have fought this before (and lost) you haven't been in the buisness...Everyone knows who supports these policies...paradigm, def tech, rotel, bose, elite (on their tv's), ...why don't you just name 'em and boysott 'em if it is that important to you...

 

[Myron]

Paul,
I'm confused. How can Paradigm legally request that Ebay pull auctions that you had on Ebay if the equipment you're selling is truly used? What was Ebay's official response to you as to the reason? They must give you a reason in writing. If you're legally not a dealer and selling your own personal equipment, how can Paradigm object?

Myron

 

[Jeff D.]

My understanding is that they do, however, dictate some limitations on how discounts are to be offered, e.g. a Paradigm dealer is not allowed to quote a discounted price over the phone. One presumes that the intent is to prevent competition by price among dealers.

Again - UNTRUE.

Let's set it straight - Paradigm does not dictate anything in terms of pricing in ANY way. There is no price fixing. There is no limits on quoting discounts. Nothing.

What Paradigm does do is prohibit Internet sales, mail-order sales, or sales to non-authorized dealers - ie. the product cannot be sold if the intent of the buyer is to resell it. These are the only rules Paradigm has and they are VERY strict about them.

/Jeff

 

[Craig Morris]

Jeff,

I'm not saying I don't believe you... you say you work for a Paradigm dealer and I'm sure you know your stuff.

However, 2 dealers in the Ottawa/Montreal area told me the exact opposite of what you've said.
In the first case, I had a quote from another dealer, and the dealer in question wanted the name of the store that had quoted me such a low price (if I had to guess, he wanted to rat him out to the regional rep). His exact words were "my Paradigm rep would pull the product line from my store if I sold to you for that price."
Another dealer where I bought a Rotel receiver and a friend bought some Paradigm speakers went as far as writing up fake trade-ins on our receipts to protect his a$$ from his Reps who apparently check his receipts to see what price he's selling his product for.

You've experienced one thing, I've experienced something entirely different.

 

[James Zos]

"Paradigm makes a high-quality product.They want to ensure that this product is sold in locations that know the product, are able to advise the consumer and can provide service if needed."

I just don't buy this argument.

I'm with you on the first part:

"Paradigm makes a high-quality product."

It is the SECOND part I have a problem with:

"They want to ensure that this product is sold in locations that know the product, are able to advise the consumer and can provide service if needed."

That, to me, sounds like an excuse for charging as much as you can get away with.
How much "service" do we really need when buying speakers? As long as they aren't defective from the get-go, aren't they likely to remain in working order?
If I have a choice between buying the same speaker, in the same condition, from someone who can give me a good deal - or paying several hundred more for full MSRP from someone who can offer "advice" and "service," I think I know which way I'll go.

Klipsch trieds to do the same thing as Paradigm. I'm not saying Klipsh is equal to Paradigm in quality, but on the official Klipsch boards they try to persuade people not to buy Klipsch from unauthorized online dealers, claiming they might get speakers, with problems, they won't be buying from a "knowledgeable" Klipsch dealer, etc.
But you know what? I bought Klipsch online, at a price to my liking, and saved hundreds of dollars doing so with zero problems.
I also got speakers in the COLOR that I wanted. If I had gone with my local "authorized" Klipsch dealer, I would have been stuck with blond speakers, because the dealer LIED to me and said that was the ONLY color they came in. How's that for "knowledge" and "service?"
This same dealer, by the way, is the ONLY "authorized" Paradigm dealer in my area. I chose Klipsch over Paradigm because I could buy online and avoid this scuzzball, while saving money in the process.

Are all dealers as sleazy? Of course not.

But with the increasing popularity of DVDs, there are more and more people getting into home theater, and some of them have a lot of money to play with, and this creates a situation ripe for exploitation.

 

[Jeff D.]

Craig:

I won't say I don't believe you either. The simple fact is, those dealers are clearly less than reputable and are feeding you BS. Paradigm does not check to see what we sell our product for and there is never any threat to remove the line - apart from the reasons I have already elaborated on. Any dealer who feeds customers these lines are just lying - whatever the reason, doesn't make them look too good.

How much "service" do we really need when buying speakers? As long as they aren't defective from the get-go, aren't they likely to remain in working order?

First off, there is the service before the sale. Buying speakers is not simply a matter of picking one and going with it. Some questions I pose to my customers before showing them potential product:

1. What will the system be used for? (ie. Home theater, music or both?)

2. What are your listening tastes? (ie. hard rock, smooth jazz etc)

3. How loud do you like to listen?

4. How large is the room?

5. What kind of bass do you like?

6. Do you need magnetically shielded speakers?

These are things no web site is going to answer for you, but are crucial to ending up happy with the product. Paradigm does not just want to sell you speakers and be done with it. They want you to be a satisfied customer. If you have a very large room or like to crank it, the Paradigm Atom is not suitable. Now that may seem obvious to us, but it isn't to everyone. Someone sees the great reviews of the Atom and buys a set online - then they realize that they have to crank the volume to get any decent levels and before you know it - blown speaker.

A good dealer will ensure this doesn't happen. If you have a very large room you will need larger speakers to achieve a certain sound level. Same advice applies for subwoofers - the larger the room, the larger the sub needed to provide the same level of bass.

There is much more to a speaker sale than just closing the deal. A good dealer should be able to steer you to the right product based on your needs. A good dealer can also illustrate the differences between the various lines from Paradigm.

These are the reasons online sales are prohibited. As for service after the sale - generally you are correct. If the speaker works out of the box, it always should. You would be very surprised though, at how often speakers are abused. Again, it may seem simple enough to us, but we always see speakers in for repair because of pure abuse. Mail-order companies and internet sites don't offer this. In our store, we stock all the common Paradigm parts. If you have a Paradigm speaker that needs repair, we can have it done for you often in the same day. Find me a mail order or internet site that does that.

Paradigm makes no claims that buying online gives you an inferior product. What they do claim, rightly so, is that you will receive inferior service.

Just keep in mind that the people on HTF are not the majority - most consumers are uneducated in this field. Paradigm policy gives hope that they will become educated. However, based on the stories I am reading, not all dealers are up to snuff.

/Jeff

 

[James Zos]

You make some good points, Jeff. I don't see this as a completely black or white/right or wrong issue. And I do tend to forget that not every consumer knows as much as your average HTF poster. That is, however, why I think many will be taken advantage of by those dealers who are unscrupulous.
As for customers who abuse their speakers - they should go to jail. Okay, maybe not jail. But I have a hard time feeling sorry for them if they damage speakers through their own carelessness.

 

[James Bergeron]

Craig, I'll have to agree with Jeff here, I have had some pretty amazing price quotes on Paradigm speakers here in Ottawa. I ended up with 4 Studio 40's and a CC for $2k that's about $1k or more off the MSRP. I was never told that they would get pulled if the rep knew the pricing.

I was told at one shop that if I wanted the great deal (this was a worse deal, IE $3K after tax for the 5 speakers) I would have to buy within 1 week (ie their stock base). But that's fine, he's giving me a deal for his stock.

I've dealt with one local dealer that won't move much, and I refuse to go in that store anymore. Not because of price but because of the WORST service and product knowledge I have ever seen.

I was actually told that paradigm doesn't release specs on there speakers when I asked, the guy was an arse to boot.

 

[Matt Odegard]

Does anyone have the Canadian postal code or area code(the code closest to Minnesota) to find out which Paradigm dealers are in canada that I could drive to and see what they offer?

I'd greatly appreciate it. Or atleast where I can go to find the code.

Thanks Matt

 

[Jeff D.]

But I have a hard time feeling sorry for them if they damage speakers through their own carelessness.

No one feels sorry for them, including Paradigm. Such abuse is never covered under the manufacturer's warranty. I think that goes for pretty much any speaker manufacturer I know of - maybe not Bose though.
/Jeff

 

[BobJ]

So if Paradigm has the luxury of dictating who gets to sell their stuff then it behooves them to be more vigilant in not authorizing deadbeat B&M stores. I'm not talking about the ones merely charging MSRP. I'm talking about the ones charging MSRP and not wanting to waste their time on you demoing speakers, putting ALL SALES ARE FINAL on their receipts, and basically giving you no better service than www.noservice-cheapprices.com. Not doing so can give Paradigm a black-eye.

You said it.

 

[Jeff Ery]

You all have the option of sending Paradigm a letter outlining your problems with said dealer(s)...I'm reasonably sure that there are other dealers in the area that would like the line...Express your problem with Paradigms policy in the letter and say that if they are going to restrict distribution that they should really be selective....
As for unscrupulous dealers...I think that you will find good vs bad service in this industry in the same proportions as you would in any,,, lawyers, car salesmen,mechanics, doctors, politicians, police,etc...the differance is that in this buisness they don't "generally" take your money and dissapear like the unscrupulous "dealers" on-line.....also ,however ,probably not in any greater proportion than you'd find anywhere else...I always wonder(knowing companys in this buis that get more love-mail than hate-mail) why when I frequently see people in stores who will scream from the tops of the trees to everyone in my company that they weren't given good enough service, thereby having the higher-ups "inspire" their sales staff not to act snooty at the risk of their jobs (good salesmen don't already 'cause of the risk to their commission), people here just suck-it-up, take that attitude and walk out...I feel that you ought to have enough interpersonal relationship skills to find at least ONE friendly person in EVERY STORE who would like to serve you in the hopes of making money....As I have said before, if the OVERWHELMING majority of salespeople you meet you can't get along with, I would be somewhat introspective on the matter...most of the people who make a healthy living at this don't do it by being as$h2L&$.....

 

[Jeff D.]

So if Paradigm has the luxury of dictating who gets to sell their stuff then it behooves them to be more vigilant in not authorizing deadbeat B&M stores.

Absolutely, and Jeff's post after this is a good follow-up.

They need your help to be vigilant. If you're unhappy with the service you receive from a store, you should contact Paradigm and let them know.

I think, more than likely, that the majority of dealers are reputable. We are reading of a few bad examples and the tendency on this forum is to paint everyone with the same brush.

/Jeff

 

[DerekF]

Matt,
The closest place would likely be Thunder Bay, Ontario, Postal Code P7B XXX (you only need the first three digits).
Here's a map
...you're also fairly close to Winnipeg...another map...
Click on "find a postal code" to find others.
Derek