HELP Electrocompaniet stole Christmas


What a mess:
After finally deciding that spending money on the latest EMC-1 parts mod, I contacted Electrocompaniet's distributor back in October to arrange to bring my EMC-1 MkII to him directly in PA so as to avoid RT shipping risks and expense for this 50 pounder. All was set for a Christmas week mod, as I was to be in NJ visiting my relatives that last week.
I called on Christmas eve to arrange a drop-off time, and was told that Christmas Day noon would be fine, but that I had to arrange the deal through a dealer! Yikes! So I remembered Fathers & Sons and called them, arranging for the paperwork and profit to be credited through/to them. Fine. So I drove 2 hours through a nasty winter storm to arrive at Warshaw's house, where he said he'd NOT perform the mod if my EMC-1 didn't have a serial number on it, as there was a grey-market guy in New York who sold a few of these this year. I assured him that mine indeed had a serial number, was produced in spring '01, and bought used by me in summer '01. He said OK, and lugged the player into his house, saying he'd call me in a couple of days to pick it up. Great!..............
I returned to NJ and watched the storm intensify....
Two days later I called to arrange a pick-up hour, and Alan told me that he did NOT perform the mod because the player had been originally sold by a Danish dealer, and NOT through him, so he had made a decision to NOT support any players not originally sold thorough him. No warranty repars, parts, nor mods!..............
I was stunned, couldn't convince him to make an exception since he had never asked me to provide a serial number beforehand, and I went through a total of a half-day of driving through a storm to accomplish this mod.
He just told me to come pick it up at my convenience. I glumly arrived on Saturday and retrieved my untouched puppy, where Alan said that unfortunately I had to share the victimization of the gray-market. I asked if I should contact a Danish dealer to see if a board-swap could be done (of course thinking he didn't really know the answer), but he thought that Electrocompaniet wouldn't support my player either! I asked with some incredulity what was going to happen with all the players that people have when they move from one country to another (!), but he said that this policy was the only way they have of penalyzing the gray market.... I suggested that in THIS CASE he should have installed the mod because of his lack of due diligence in assessing the production/sales history of this particular CDP, ESPECIALLY given my enormous effort in delivering it to his doorstep on Christmas Day.... I left sadly but gracefully.
WHAT SHOULD I DO? I contacted the Danish dealer but he's not responded. Should I contact Electrocompaniet directly and try to arrange a board swap or purchase the parts mod "kit" and instakllation directions (I'm pretty familiar with boards and soldering)? Should Alan have acted differently? Isn't the world getting small enough so that internationally-sold products should have protected lives independent of sales point?
PLEASE HELP!
A Happy and safe New Year to all!
Ernie
subaruguru

Showing 2 responses by sos

Since it seems that many people want me to respond to this issue I will but only as an overview of what has been stated to date. I have not been able to reach Alan to get his reasons although some are obvious and I feel that I have no right to speak for Alan without us discussing the issue.

Before going into this delicate issue I do hope that everyone had a great holiday season and that 2003 is wonderful for us all.

I am a little surprised by some of the comments, "I was thinking of a dac but I have taken them off my lists",
"I know not to purchase a Electrocompaniet product", how is it that a company can be so easily dismissed for one minor issue. We are talking about an upgrade here not a unit that is not working.

Some points I would like to make in the very beginning. Alan Warshaw has always proven to be a wonderful distributor and has always gone out of his way for customers in my dealings with him over the last 4 years.

I cannot recall of a single customer that he has ever refused to help except for those with the "grey market units."

One other point that I would like to make is that many distributors and manufactures rather not deal with the public and that is why they are not dealers. Everyone does not excel at interpersonal relationships.

Now there have been some things stated on these posts that are absolutely ludicrous so let me deal with those first of all.

Someone mentioned that if you purchased a Mercedes "grey market" that you would still have a warranty that is absolutely not true. The term "grey market" came about because of the practice years ago of high end European luxury cars coming into the states and not a one of those had a warranty and many dealerships would not touch them. But you know what they were alot cheaper! Any time you circumvent the system you initially pay less you just lose it on the back end if you resell the item.

It was mentioned that Electrocompaniet is Mid Fi gear. I would highly recommend that you listen to some of their latest offerings and compare it to any gear at any price point. The EMC CD player is as good as anything out there
and the DAC, Integrated amp and AW 220 amps are stunning.

I continually hear that the distributors over charge for products in the US. I have looked into the issue because there are a couple of lines that I love without US distribution at this time and I have considered importing the lines. When you look at all the costs involved no one is getting rich distributing audio products in this country. Also it works both ways US products in Europe and Asia are alot more money. The Exchange rate dictates what your profit margin will be week to week. The distributor normally pays for the warranty work the manufacture supplies the parts. So there are added costs besides shipping, duties, storage etc. Almost all products go through distributors that is just the way business is done.
A global economy does not mean that you find a back door to purchase a product and then expect that the distributor has a responsibility to you.

Many of you state that Alan at Electrocompaniet has a duty to take care of the customer regardless of the situation and that is being very short sighted. If a distributors costs get too high normally the first thing that goes is the warranties. Look how many companies in audio do not offer warranties to the second owner. Many are US manufactures that do not even go through a distributor network. Alan does honor the transferring of Electrocompaniet warranties to the second and third owners tell me how does he benefit from that?

This has all come about because there has been someone in the US who has purchased EMC's and Audio Aero's and resold them in this country for a significant discount on Audiogon.
Many customers purchased them. Some had problems which I find amazing since I have never experienced problems with the players. Somehow Electrocompaniet got a lists of the players of the Danish dealer that broke protocol and sold them to a consumer in New York who resold them. These units from my understanding are not to be covered by anyone but the Danish dealer at his expense. (That maybe why no one can contact him) I placed a posting months ago warning those of you on Audiogon - - that was about all that one could do.

I just talked to Alan and when he talked to the customer he tells me that he was not given a serial number. Upon realizing that it was one of the banished units he refused to do the upgrade. I find it unfortunate for the customer but Hopefully this can be a learning experience for everyone that when purchasing used audio gear it never hurts to get the serial number and check before you purchase.

Let me reverse the situation a minute and lets say that Ernie purchased a corvette and it came with a 36,000 mile bumper to bumper warranty. The vehicle is purchased used and at 33,000 miles it needs some warranty work and the customer calls a dealership and makes an appointment. Upon arriving at the dealership they find that the car was last serviced at 48,000 miles and the speedo had been rolled back by the previous owner. The dealership refuses to cover or even work on the vehicle as does GM are they in the wrong? Is it the fault of the dealership, GM, or the fraudulant previous owner.

To most of us including me audio is a hobby. But it is also a business first and foremost to many and all business decisions are not always popular.

I just ask each of you who have responded to this post to put yourself in Alan's shoes. You make your living importing a product this is how you exist. You have a huge investment in product that you have purchased, in years of getting dealers to believe in Electrocompaniet, in consumers who depend on you to service and repair the product. Now there is an invasion of a renegade European dealer that could destroy all that you have spent years to build. WHAT WOULD YOU DO? If you take care of one "grey market" unit you give validity to the future forces that could overwhelm you.

Someone mentioned that Electrocompaniet should get a new distributor. Why for protecting what he has worked years to build? Also for those of you that do not know this when a distributor goes away and a new one comes in all the product previously sold no longer has a warranty in this country because the new distributor is not going to cover the expense of repairs. He has no obligations to the past in which he was not involved.

I know that on the surface Ernie's upgrade seems a simple OOPs how cruel and heartless by the distributor but there are many issues involved.

And I will repeat we are not talking about a player that is defective or not working. But about one that the customer wants upgraded.

I know one of the things that makes Ernie's situation more appealing is that he drove to Alan and brought him the unit.
In my opinion the only mistake Alan made was not opening the unit then and there seeing what it was and returning the unit. But I must admit I never open units when they are first brought over because you do not expect them to be "grey market."

As to my taking care of Ernie I cannot because the only person doing this upgrade is the distributor. Furthermore I would not go against Alan on this I do not have the right.

But there are alot of other CD upgrades available aftermarket.
JCBtubes very insightful response. The story that I am told by Alan is a little different but that is not the heart of the matter anyway. I have no idea what actually took place and I will be the first to state that I would have handled it differently whether it went down the way described by Ernie or Alan.

The issue is what do you do with "grey market products" and still protect the integrity of a product lines value and dealer network.

We are talking about EMC 1 players that retailed at the time for $5000 and were sold between $3000 and $3400. Doesn't anyone believe that is destructive to a product line? Is it fair to the dealers who have stock in inventory, is it fair to the distributor that has spent years developing a line, but most important is it fair to the majority of the customers in this country who paid anywhere from $4250 to $5000 for their CD players.

The issue is not so much protecting the used market because the people who purchase a product that cheaply will dump it for less than the person who paid $5000. The used market is already damaged but more important an artificial price on the new units is established which could hurt the dealers who are responsible for taking care of their customers, and the distributor who does the warranty work not only for the original buyer but the future buyers.

I agree that it would be nice to find a solution that is more inclusive than exclusive. But what is to keep rogue dealers in Europe from selling to friends in the states brand new units that they turn around and market on the internet?

Ernie is the first one to complain on Audiogon but I have had several customers who purchased these units before I even knew about them and they have had problems. I have tried to intercede and help them but the issue comes down to what do you do? What is fair?

Yes, there is profit in doing the $800 upgrade but Alan in doing the upgrade felt that he was betraying his dealer network. We were told not to take the units in on trade, not to work on them or be involved in anyway. How could he demand that of us and then go against what he had instructed us to do?

F & S is a great dealer and a friend but in the final analysis I would be glad to hear a solution to resolve the issue for the 10 units on the market because this will not stop here - - someday those units without a warranty will be resold and what happens to those buyers?

The easy solution is since the pool of Electrocompaniet products has been corrupted just give a warranty to the initial owner only which is becoming more common everyday.

I hope to never see that happen but more and more companies are going to that and one reason is to limit used sales and to fight products that are grey market.

I am impressed with all the responses even the ones that slammed me. And I must admit that at first I was not going to respond but I had so many customers contact me and request that I respond in some way even though this really has nothing to do with me except for the fact that I carry the product and love it, consider Alan a good friend who has always been wonderful to me and my customers and has always responded in every situation.

The only times that we have disagreed has had to do with what to do with the "grey market units." Not as far as upgrades but performance and warranty issues.

Since so many of you have responded I am curious please use your imagination and imagine that you are responsible for a product line in this country. "Grey market" units are being introduced into the US how do you protect your dealers, customers, and your own interest?

I know many of you seem to have trouble with the fact that it is an upgrade we are discussing but the upgrade was created in the US and that is one thing that Europe did not have available till just recently only the US market. So the upgrade has significance since that is something that no "grey market unit" could have nor does have!

So in the final analysis what is fair. If someone purchased a "grey market unit" offer them the difference between the new retail price of $5500 which includes the latest upgrade versus what they purchased the "grey market" unit at minus a 15% discount which is about what they discount at? So $4675 minus the $3000 they paid so they get the upgrade plus the full warranty for $1675. Then there are no units without warranties?

Be creative I have no control over what happens but I can bring this up to Alan at CES. I mean whatever happens if people are looking for what is right should be win win for everyone.

When I state everyone here I am referring to those customers who purchased the "grey market units", Alan who has invested years to Electrocompaniet and done wonders with the line, the hundreds of Electrocompaniet customers, and the US dealer network.