Online dealers - random question

[Scotttyd]

This question is simply due to my own curiousity. If certain online retailers are non authorized dealers, where do they get their inventory from? Are some not considered authorized because they sell items below the manufacturers predetermined price? Ie. The Akona backback varies from mid $20's to over $40 depending on who you buy it from. I would assume the dealers all buy directly from the company, but is what makes them "authorized" based at least somewhat on what they charge? I would assume they all would pay a similar price when they buy them (based on volume) but why can some sell it much much cheaper?

 

[cowjazz]

In a non speculative nutshell...

The on-line retailers that are not authorized dealers tend to obtain their products through the gray market. The find authorized dealers who are willing to sell their stock to them, and offer it for sale to you.

They can sell it cheaper than the authorized dealers because they are not authorized dealers, and are not bound by minimum advertised pricing set by the manufactures. An authorized dealer is at risk of losing his authorized status if he sells below the MAP price. Products purchased from authorized dealers carry a full manufacturer warranty. Products purchased from non-authorized dealers does not, but may come with the unauthorized dealer's own warranty.

 

[mike_s]

In a nutshell...

The on-line retailers that are not authorized dealers tend to obtain their products through the gray market. The find authorized dealers who are willing to sell their stock to them, and offer it for sale to you.

while it might be true in some cases, This part is not entirely true......

the non authorized dealers for a lot of products actually get their product direct from the manufacturer. The manufacturer just won't admit to it they they ship it to the 'grey market dealers'. This is just another way of pushing product because if the grey market dealer doesn't sell their product, they'll just sell someone else's product.

Grey Market dealers also buy stuff overseas in bulk. So your regulator or computer might be let's say a European model and come with slightly different battery or a manual in a different language. The scuba industry isn't the only industry that does this. It's much more rampant in the photo equipment industry.


Scottyd, If you do a search on scubaboard for unauthorized dealer, grey market, non authorized dealer, etc, you'll see this subject has been beat to death in many previous threads....

They can sell it cheaper than the authorized dealers because they are not authorized dealers, and are not bound by minimum advertised pricing set by the manufactures. An authorized dealer is at risk of losing his authorized status if he sells below the MAP price. Products purchased from authorized dealers carry a full manufacturer warranty. Products purchased from non-authorized dealers does not, but may come with the unauthorized dealer's own warranty.

This part is true for most grey market dealers. Just read the fine print on anything that looks like it's too good to be true.

 

[tridacna]

while it might be true in some cases, This part is not entirely true...... .

Mike, I agree with you mostly but I'm not sure about this European sourcing theory. I suspect that all the grey stuff comes from regular US manufacturers. I've never seen a reg or comp with different "batteries"? You kidding right? 220 or 240 or 110V, I can understand. Even 50 or 60 Hz. Transformers are global , so who cares. But different batteries??? Manuals are typically produced in 4-7 languages so that they can be sold globally. Have you really seen one sold here or is this just conjecture?

 

[mike_s]

Mike, I agree with you mostly but I'm not sure about this European sourcing theory. I suspect that all the grey stuff comes from regular US manufacturers. I've never seen a reg or comp with different "batteries"? You kidding right? 220 or 240 or 110V, I can understand. Even 50 or 60 Hz. Transformers are global , so who cares. But different batteries??? Manuals are typically produced in 4-7 languages so that they can be sold globally. Have you really seen one sold here or is this just conjecture?

I used European models as an example, but there are reports on SB that people have gotten non US models from certain grey market dealers and ended up with a small part difference based on the country/region they were in. I'd have to dig through the crappy SB search engine to find linked examples posts. Of course you'd figure they'd be all the same based on they were made in the same location, but I guess they aren't. But this could all be called "hear say" easily as the manufacturers of course would never admit to any of this in the first place. I also said it's much more rampant in the photo equipment industry, which has much more grey market sales than Scuba gear does.


Also, the biggest grey market dealer (LP) even admits they sell product with out the US manual. (which means it comes from overseas, but not a 100% given.....), But you're right that products (in general) come now days with manuals in many languages so that they can be sold globally.


here's an example of LP's statement on their manuals might not come with US manual.

Warranty Policy | LeisurePro.com

Warranty Policy

Leisure Pro buyers find the best products at the lowest possible prices wherever they are. Since (sometimes) that means that we do not buy it directly from the manufacturer, nor are we authorized by them to sell their products, so we are not bound by the official/unofficial manufacturer's suggested retail prices, and we can pass on the tremendous savings to you. In some instances the product will come without an English language manual or manufacturer's warrantee cards valid in the United States. In those cases, we provide our own Leisure Pro Warranty, which offers equal or greater protection.
​

 

[Scotttyd]

Thanks for the info, I was just curious, I really have no agenda, although isn't LP an authorized dealer for Cressi (their products come with a warranty). I purchased a SPG from LP, I went to register it and I saw they were not listed as a dealer on the website (genesis). I only paid $65 for the item so that is not that big of a deal and it works fine so far.

 

[Coalcracker]

Thanks for the info, I was just curious, I really have no agenda, although isn't LP an authorized dealer for Cressi (their products come with a warranty). I purchased a SPG from LP, I went to register it and I saw they were not listed as a dealer on the website (genesis). I only paid $65 for the item so that is not that big of a deal and it works fine so far.

If you are in Manhattan stop in and see for yourself. They always have the newest gear and very good pricing.

Many companies who sometimes say they are not selling direct to Leisure Pro actually do. I have been in the Manhattan store when a sales person was talking to a rep from one of the companies who denies selling direct. Leisure Pro is the largest dealer for many of the companies who publicly deny selling them.

 

[DA Aquamaster]

I agree with the suggestion that many US non-authorized dealers get stock from off shore suppliers who are not bound by the same restrictive dealer agreements.

It may also be the case that companies sell to them directly, but I doubt it and it does not matter as the effect is the same. If the non-authorized dealer buys from an overseas dealer at near cost, the authorized dealer just orders more from the company and in the process improves his standing with the company due to his higher sales. The company still moves more product (probably 30% of total sales) by utilizing on-line retailers, but maintains plausible deniability by saying they do not support the on-line sales they restrict their authorized dealers from participating in.

Companiues claiming they cannot control on-line sales is a farce as most high dollar items are serial numbered and all a company would have to do is buy one back on an on-line purchase, note the serial number and track it back to the authorized dealer they shipped it to originally. Then cancel the agreement with the dealer to plug the leak. They don't do it as they do not want to lose the sales or lose their share of the on-line market to another company.

Other sources are authorized dealers going out of business or switching dealerships and selling inventory outside the dealer agreement to on line retailers as they no longer care what the company thinks, I suspect more than a few of those dealers also bulk up the final order before notifying the company they quit as they know they can sell it off to on-line retailers and still make some profit on the quick high volume sale.

 

[EastcoastdiverLLC]

I agree with many in the forum that many grey market dealers purchase from authorized dealers. A few words of caution, their warranty in't always what its cracked up to be. Many of these online stores and auction houses don't even service gear and probably don't even dive. Buying from an authorized dealer and registering your product means you get the best warranty and are kept aware of recalls which do happen. RE: The overseas market: Be aware that MOST equipment is manufactured overseas, but when manufactured for the US market, may be manufactured to a higher standards.

Just a thought,
Gary

 

[redacted]

Companiues claiming they cannot control on-line sales is a farce as most high dollar items are serial numbered and all a company would have to do is buy one back on an on-line purchase, note the serial number and track it back to the authorized dealer they shipped it to originally. Then cancel the agreement with the dealer to plug the leak. They don't do it as they do not want to lose the sales or lose their share of the on-line market to another company.

In some countries with strong consumer protection laws, it is illegal for a manufacturer to dictate retailer policies or to cancel a contract with a retailer because of how the retailer conducts his business. Canceling such a contract may result in financial penalties and/or loss of the ability to continue doing business in those markets.

There is no doubt that the route the goods take are known to the mfgr. But effectively shutting it down may not be financially possible. I suspect the few who seem to have had some success, like Atomic, have done it with more recent and carefully crafted contracts and probably some attractive incentives to voluntarily not sell to grey market dealers at heavily discounted prices.