Aqualung's war with Online Consumers

[beanojones]

Something seems funny about this idea.

Grey market comes from gear bought in one market and trans-shipped to a higher priced market right?

How could AL tell the difference between gear I bought at a AL dealer in the Philippines, and gear LeisurePal (Used as an example here, I have no idea how any place gets their gear) buys from the PI distrbution center?

Is every dealer supposed to key in serial numbers at the point of sale? (That seems very unlikely to ever happen, and even if it did, a place like LeisurePal could just key it in when they bought from the distributor in the Philippines).

Have I got the basc concept of how online places are getting grey market stuff to sell?

Anyone know if this is how grey market works in the US. I know it works this way in the Japanese market. But the Japanese market does end up selling it through a shop, just a shop in Japan. Service is not much of an issue wince the selling shop (or more likely a US based branch of the Japan selling shop) almost always does the service anyway. That's what I worked on mostly. Japan sold gear was brought diving and then left for service.

(Japan market strangeness: We had piles of gear that we stored for Japanese divers in the US. They'd dive, and then leave their BC, mask, fins, wetuit for storage and their reg for service then storage. They only dove when in the US, and then only with us.)

 

[redacted]

I don't believe the USA scuba grey market is created by lower wholesale prices outside the authorized distribution network. Rather, it is created by USA distributors attempts to implement artificial price controls at the retail level. As I understand it, both Scubapro and Aqualung requires a dealer agreements for authorized USA retailers that stipulate minimum retail prices (MSRP - 10%) which requires quite a high markup. Such a markup and profit margin allow small inefficient shops to survive creating ready access to LDSs and the mfgrs products. In too many cases, it creates more that could survive in an open competitive environment. This creates an opportunity for a retailer whose business model depends on high volume, low margin sales to thrive if they can obtain the products without being encumbered by such restrictive dealer agreements.

In many places around the world, wholesalers are not allowed to exercise such control over retail sales. In fact, in some places the manufacturer can't even stop distributors from selling their gear to places like Leisurepro without being penalized and expelled from the market.

It's not nice to fool mother nature.

 

[rstofer]

I've got a question. It's my understanding that when you buy graymarket equipment it will be in a factory box but without the warranty card. Is that right?

If so, who removes the card? I can't imaging the company packing the boxes saying "This one goes to retail, put in a card. This one goes to graymarket, don't put in a warranty card". If they did then someone, at this point in the process, knows exactly which box goes where. I would imagine that they are all boxed with cards at the time of manufacture.

I suspect the cards are removed at the manufacturer's US warehouse just before they ship it over to LP. Or, maybe the agreement requires LP to remove the warranty card.

Somebody has to remove the card. It was almost certainly put in the box when it was packaged.

Richard

 

[mike_s]

I've got a question. It's my understanding that when you buy graymarket equipment it will be in a factory box but without the warranty card. Is that right?

If so, who removes the card? I can't imaging the company packing the boxes saying "This one goes to retail, put in a card. This one goes to graymarket, don't put in a warranty card". If they did then someone, at this point in the process, knows exactly which box goes where. I would imagine that they are all boxed with cards at the time of manufacture.

I suspect the cards are removed at the manufacturer's US warehouse just before they ship it over to LP. Or, maybe the agreement requires LP to remove the warranty card.

Somebody has to remove the card. It was almost certainly put in the box when it was packaged.

Richard

Just because it's grey market doesn't mean the warranty card is removed. although that's typical.

grey market just means it's not sold as an "authorized dealer product".


With Dive Gear, the grey market dealers don't typically specify if it's grey market or not... the consumer has to investigate that for themselves. almost buyer beware.

In the Camera industry however, dealers will typically sell both the US Authorized dealer item and also the grey market item and will specify if it's grey market and show the difference in warranty. typically the grey market camera item is cheaper than the US item. go figure.

 

[divinginn]

I am not a fan of Al as I have been asking for an answer to a problem on Sea Quest BCD's for years now! I have now repaired over 50 BCD's when the threded bits that hold the inflator and dump valves have simply broken up! I contacted AL several times and they said that they did not understand what I was talking about even after I sent pictures of the problem to them! My shop, in General Santos City is very small but I have had to repair so many AL BCD's seems wierd to me especially as they refuse to accept responsibility for the problem! Other companies, Aquatech and IST had a similar problem but they exchanged the damaged BCD's with no questions asked! Why cannot a big company get some balls and own up to bad manufacturing of parts like the smaller companies!
How many of you out there had their BCD's break on them!
I did not want any compensation from AQ, just repair kits so I could fix the problem but they would not even supply them!
Will I buy AL products again, not likeley!

I had the same thing happen on my black diamond bcd,one minute everything was fine the next, inflator not working.

 

[siikik]

I don't believe the USA scuba grey market is created by lower wholesale prices outside the authorized distribution network. Rather, it is created by USA distributors attempts to implement artificial price controls at the retail level. As I understand it, both Scubapro and Aqualung requires a dealer agreements for authorized USA retailers that stipulate minimum retail prices (MSRP - 10%) which requires quite a high markup...

This is the second (maybe more) reference to MSRP in this thread... there's a reason for the "S" in this acronym... And that reason is based on law. Simply put, nobody can tell you how much to charge for something. If you want to sell it at a loss, that is your business... notwithstanding stupid laws like the one here in Florida that says a retailer can't sell gasoline for less than he paid for it... again, an exception to every rule. But seeing how the general retail market is not regulated, manufacturers can only "suggest" a retail price. Regardless of association. So typically retailers (and etailers) do (or sometimes buy) market research to tell them what the market will bear for a particular item... that is what they tend to charge. Discounters use the same information to determine how much volume they have to sell to make the same amount of profit. It really is basic economics.

Aside from counterfeit items, and I'll be the first to say I'm amazed that anyone would want to counterfeit a BC, the manufacturer assumes a moral responsibity for said item with regards to safety. (Although it doesn't make sense when the proper use of a product will inherently put the consumer "at risk"?) Anyways, free trade being what it is, the manufacturer is responsible only to a safety point, grey area or not. It is out of the kindness of their heart (and an inate desire to retain loyal brand-specific customers) that they provide "free" parts for maintenance.

There are still plenty of points to argue, so I'll leave them up to someone else to bring up. I've said what I came here to say.



Ken

 

[redacted]

This is the second (maybe more) reference to MSRP in this thread... there's a reason for the "S" in this acronym... And that reason is based on law. Simply put, nobody can tell you how much to charge for something. If you want to sell it at a loss, that is your business... notwithstanding stupid laws like the one here in Florida that says a retailer can't sell gasoline for less than he paid for it... again, an exception to every rule. But seeing how the general retail market is not regulated, manufacturers can only "suggest" a retail price. Regardless of association. So typically retailers (and etailers) do (or sometimes buy) market research to tell them what the market will bear for a particular item... that is what they tend to charge. Discounters use the same information to determine how much volume they have to sell to make the same amount of profit. It really is basic economics.

Ken

That is basically true. The shop can legally sell it's stock for any price it wants to. The catch is the manufacturer can and will stop supplying the shop and terminate its authorized dealership.

 

[pescador775]

That is basically true. The shop can legally sell it's stock for any price it wants to. The catch is the manufacturer can and will stop supplying the shop and terminate its authorized dealership.

Yes, true. When the states dropped "fair trade" laws due to a Supreme Court decision Scubapro did not wait long to inform dealers that as far as they were concerned nothing had changed. During the 70's I attended a function in NYC in which Dick Bonin and Richardson's (dive discounter) entered into an argument. Bonin shouted that (expletive) if Richardson's continued to sell (expletive) Scubapro gear at discounts that they were (expletive) toast. That's the gist.

 

[beanojones]

I don't believe the USA scuba grey market is created by lower wholesale prices outside the authorized distribution network. Rather, it is created by USA distributors attempts to implement artificial price controls at the retail level. As I understand it, both Scubapro and Aqualung requires a dealer agreements for authorized USA retailers that stipulate minimum retail prices (MSRP - 10%) which requires quite a high markup. .

But how do the retailers get the gear at wholesale prices to sell in the first place then?

 

[redacted]

But how do the retailers get the gear at wholesale prices to sell in the first place then?

Which retailers are you asking about. Authorized US retailers get it from Scubapro USA, the US distributor. Gray market retailers like Leisurepro seem to have many sources. Basically authorized retailers and distributors in the USA and overseas who buy in quantity and send to Leisurepro for about a 10% commission.

10% of $1,000,000.00 over a couple years is not bad.