Why won't manufacturers warranty internet sales??

Discussion in 'Archived Threads 2001-2004' started by Rob_Z, Apr 15, 2002.

  1. Rob_Z

    Rob_Z Extra

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    I don't get why manufacturers will not warranty internet sales. I mean if it's a Denon 5803, then that's what it is, is Denon claiming they did not build it? It must have come from their factory. Are there other companies building Denon 5803's. I don't thing so.

    Second, how are these people getting the products? Denon is building them, Denon is shipping them, but then they won't warranty them. I say if it was built by Denon then it should be covered by Denon. It's a total scam, you know they are sending them to the unauthorized dealers.
     
  2. Earl Simpson

    Earl Simpson Supporting Actor

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    I think your onto something there. Hold that thought.
     
  3. John Garcia

    John Garcia Executive Producer

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    Authorized means to me that the manufacturer has checked on this company's ability to provide quality service in selling and handling warranty issues.

    I believe it has to do with the price paid by the retailer and the fact that they do not have the resources (or possibly the stability) that a Denon, Sony, Marantz feels would be in the best interest of the consumer or themselves. If the company won't be there next month, then why would Denon authorize them to sell their products? These small, no overhead companies negotiate below wholesale prices and spot buys to keep the price down, then sell below what a b&m would because they have no "store", just a wharehouse and very few personnel. Best Buy probably won't be going out of business any time soon. Proven internet suppliers who have been around a while and have shown they can meet whatever criteria makes a manufacturer "authorize" them are their preferred companies for the same reason.

    Of course a large company expects that what goes out the door works when you plug it in at home. By buying from a non-authorized dealer, you are taking all the risk that it will work.

    Would you buy a "brand new" BMW with no miles but no warranty, from "Joe's Cars" lot down the street from an BMW dealership?
     
  4. John Morris

    John Morris Guest

    A few points on this topic:

    I'd rather send my unit back to the manufacturer than have a local B&M do warranty work. If the local dealer will loan you a unit while yours is being fixed, then that service would be of value... yet, not many dealers do the loaner service anymore.

    Many of the discount online retailers actually buy their Denons, Sony's and Marantz's from authorized dealers who want a lower cost per unit price by buying in larger quantities. So, in most of these situations, the online retailer is only acting as a purchasing agent for you when they buy from the authorized dealer. If the manufacturer wants to stop this, they can just by identifying the originating dealer and pulling the line. Of course, they like this practice since it increases sales.

    B&M retailers are no more stable than some of the online retailers. In fact, I'd rather buy from online retailers like Onecall, J&R, and Oade Brothers than from any B&M that I can think of, especially at prices of almost half of what that B&M wants to charge me...?
     
  5. Hugh Scrivener

    Hugh Scrivener Stunt Coordinator

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    About fifteen years ago I worked for Ritz Camera, a pretty big retailer on the east coast. During my four years there there was a constant stream of company reps that came by parading their wares, and many older reps who had no trouble telling it like it is. We questioned the availability of our product by mail-order companies(we're talkin' late 80's here) at considerably lower prices than we could offer....and it simply boils down to this: These are products that for some reason or another DO NOT meet the companies established standard and are not sold as warrentied products. All manufacturers expierence problems sometimes and don't want to lose this money thats been invested in a product.

    People have used 'grey' market goods for years, most often un-aware of it.
     
  6. Marc Rochkind

    Marc Rochkind Second Unit

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    OK, well, we can always use another opinion, right? :)

    Manufacturers want to control their dealer channel by selecting who is a dealer and who is not. (Why they want to do this is another topic.)

    How can they control who sells their product? It's impractical to go after the unauthorized dealer directly. To name just two difficulties: (1) tracking them down, getting the legal name for court filings, etc., and (2) finding some legal basis for a lawsuit or a criminal charge.

    But, one of the things they can do is to make the product sold by the unauthorized dealer less attractive by removing one of its features. The only that can be removed after the sale is the warranty, since that's the only way the manufacturer participates after the box leaves the factory.

    And that's why the warranty is not honored. It has nothing at all to do with the quality of the equipment.
     
  7. Duke H

    Duke H Stunt Coordinator

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    John and Hugh,

    You are both right. One more point, though. When I saw that I could get a Yamaha htr-5490 off the web for the same price as I could with my employee discount at Best Buy, I asked a friend who runs an online business how he could sell stuff so cheaply. He told me that he used the same technics listed above. The other thing is that he only marked up the product like 5%, because -get this- he didn't profit off the product very much. He made his cash the old fashion way...selling advertising space on his site to other companies!!!!!!!!!!!!!!!!!!
     
  8. John Morris

    John Morris Guest

     
  9. Robert Elliott

    Robert Elliott Stunt Coordinator

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    The gray market is not as sinister nor shady as some would have us believe. Manufacturers love to throw that line out and warn their valued potential customers about the danger of buying from those fly-by-night Internet companies. 'Hell, most of the stuff isn't even real but actually a copy; if it is real, it is a stolen or defective product.' [​IMG]
    PWK - Bullshit. The manufacturers simply want to control pricing and distribution due to some misguided and archaic business philosophy. When Microsoft does it, it's freaking predatory and monopolistic practices.
     
  10. Wayne Ernst

    Wayne Ernst Cinematographer

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  11. Niel_JL

    Niel_JL Stunt Coordinator

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    So what you guys are saying is that some warranties are valid depending on the internet store? Or are you saying warranties are voided PERIOD, no matter who the seller is, even reputable ones (crutchfield, j&r, one call)?
     
  12. Earl Simpson

    Earl Simpson Supporting Actor

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    There is a compromise on this issue. If you will die without a Denon, then go to 6th Ave and pay $30 more from an authorized dealer. I am not sure if they carry Yamaha, but they probably do. Or buy Sony, JVC, Pioneer, Kenwood , Onkyo, HK and skip the hassle. JR, Oades, Onecall, 6TH AVE are great dealers who are authorized on everything they sell. Places like etronics and ecost may be a good place to get the other brands.

    I thought I would die without a Denon 3802, and it is a fine machine. But I feel the 5es and the 898(if you have the cash)are worthy purchases.
     
  13. Aslam Imran

    Aslam Imran Second Unit

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  14. John Morris

    John Morris Guest

     
  15. Aslam Imran

    Aslam Imran Second Unit

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  16. John Morris

    John Morris Guest

     
  17. dpippel

    dpippel HTF Premium Member
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  18. Susana Anderton

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    I think price control has a lot to do with it. Have you noticed that most of the authorized dealers usually quote the same prices? Maybe the discount retailers try to haggle for cheaper prices from their distributers who in turn try to do the same to Denon? Or maybe they dump warranty-less units at cheaper prices, knowing they won't have the added expense of warranteed repairs.

    Let's throw another ingredient into the mix:

    What Paradigm's practice of not allowing ANY mail-order sales at all, regardless of the dealer's authorized status? It lets them not only control who gets a warranty, but also lets them control prices by not "authorizing" competing retailers that are too close to each other.
     
  19. Jeff Brink

    Jeff Brink Stunt Coordinator

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    Doug,
    I agree. Plain and simple the manufacturer wants their cake and eat it to. They probably enjoy reading these threads where we actually take the time to decipher the conspiracy. Obviously, they cater to the customers who believe their warnings about not honoring warranties from unauthorized dealers by offering them their products through the "authorized dealer" network. These customers have a comfort level issue that is not compromised by price.
    By this I mean, they will pay extra for the peace of mind and no headache of worrying when their product is going to break and how it will be fixed when it does.
    On the other hand, the manufacturers also don't want to lose the customers that won't fall for the "bananna in your tailpipe" routine, ie. "we won't cover our products if you don't by them through the authorized network". So for these customers, their products mysteriously show up at various other outlets at heavily discounted prices. These customers are more concerned about purchase price and will worry about warranty issues if and when they happen.
    One home theater installer who sells a ton of stuff on e-bay put it to me this way. He buys all of his product in large quantities from a local "authorized dealer" at 10% above the cost that the dealer buys it from the manufacturer. He then turns around and sells the product online at a profit margin he is comfortable with. This total to the consumer cost is still far below the markup that a brick and mortar operation will sell the same product for. When it comes to warranty issues, you send the product back to the online guy and he takes it to the dealer as the original purchaser and has it fixed or replaced - no questions asked. Legitimate transaction. Makes sense - I guess.
    The manufacturer deals with the individuals who take the time to argue with them about warranty issues on a case by case basis knowing that the non-authorized dealer sales will far outweigh the headaches caused by these isolated arguments.
    Does this mean that there are absolutely no questionable business dealings being transacted then? No way! The consumer still has to take some of the responsibility for educating his or herself on the product and buying process. My belief, however, is that the manufacturer is aware of the scenarios above and plots the two against each other to increase overall sales. Of course this is just my humble opinion.[​IMG]
     
  20. Jin E

    Jin E Second Unit

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    I remember reading/hearing this somewhere. An authorized reseller will buy in bulk quantities to bring the costs down (already said). If you follow the paperwork, the second unauthorized dealer actually has to buy the receivers from the authorized agent. Any Joe-blow can goto their local B&M and buy 30 receivers if they want... this joe-blow just happens to have a deal going with the authorized resellers to get them cheap at large quantities. This is not illegal. Once you buy a receiver, you have every right to sell it, just like the now unauthorized re-seller. This is called dealer to dealer selling, which manufacturers (supposedly) highly discourage. Only thing the manufacturers can do to discourage this practice is to stop selling to authorized dealers who do this, but since they account for a large portion of their business, the Manufacturer does not want to shoot themselves in the foot. Now the warrenty specifically states that the warrenty is only good for the original purchaser. In this case, the unauthorized agent was the original purchaser (who bought it from the authorized agent), and when he sold it to you it now invalidates the warrenty. This is just what I've been told/ gathers/ read... so take it with a grain of salt.
     

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