HELP Electrocompaniet stole Christmas

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.

I appreciate Stewart's position and count him as one of the few really good dealers around. I have purchased from him in the past and would again, but I think Sean said it all. This is an upgrade. It is an aditional product so the worst thing that could happen for Alan would be that he makes a few hundred bucks for performing the upgrade. Instead, he has created a self inflicted wound which continues to get worse. Alan has his principals, his pride, and now, probably a lot fewer sales.

I still think that Father and Son should have alerted Ernie about what could happen in this situation. They should have said that they would be happy to help him but realize that if your unit is a grey market item that it is possible that you will not be able to have it done. It seems they were just trying to help but also to make a quick few dollars. I do not think that 1000 will be the price of a swap. It will be closer to the price of what he offered the DAC to you for or even more. Good luck!

Good morning.
I haven't much time to comment now as 8-12" of the powdery white stuff is about to fall on my 8 Subarus and I have to get to work....
Zaikesman: again, thank you for your incredibly-insightful, cogent synopses............
LjGj: guess I should contact Heinz. Per the comment that the mod started in the US (!), perhaps HE'S the source??! That'd sure make life easier...except the RT shipping to Florida....On your second point: F&S could NOT have been expected to apply due diligence re checking serial numbers as this whole transaction was a swiftly-arranged one on Christmas Eve. If they had landed the EMC-1 back at there shop in Idaho they would probably have checked the serial number before risking sending it cross-country to PA for a mod that would have been blocked by Alan! I cannot blame Mike for ANY of this unfortunate incident. And, again, I do not expect him to be a hero here. HE is the one who suggested that he needs a demo unit, and that this may be an opportunity to buy a used one at a discount ($1000?) and save the day for me at the same time. I appreciate his creative thinking and generosity. I am NOT applying any pressure here. It's just that this is the only solution presented so far that seems reasonably quick and serves multiple benefits. He has NOT called me back yet. Perhaps that's because relations with EC and/or its distributor have intervened...or mabe he's just in bed with the flu. I have no idea what's transpiring............ I have NOT contacted EC, as Mike asked me to hold off until a local solution could be had. So I'm in limbo right now. Perhaps the easiest thing would be to ask EC to read this thread? It'd be the quickest and most thorough method as I'm a two-fingered typist, and you've all said this better than I could......
SoS: I can't comment on each of yours now, but I repeat that NONE of the events I portrayed are ANY different from the truth! I don't know how Alan's version could be ANY different. I want to be clear about this. It is NOT a case of varying portrayals of actual events. To recap: I asked by email in Oct for a mod around Christmas direct in PA so as to avoid shipping risk, and because I knew of no dealer in New England. Alan agreed to perform the mod, and asked me to contact him after his return from a business trip. I confirmed our intent in December, noting that I would pay cash. He agreed to a drop-off Christmas week, and that he would need 1-2 days to perform the mod. I arrived in NJ and called him Christmas Eve to set a drop-off meeting time, and that I was bringing $500-550 cash. He said all was OK except that he would NOT undercut the list price of $800, and would only perform the mod for the full price unless it was purchased through an EC dealer. I was a bit stunned (but fully understood his wanting to not undercut his dealers), and we agreed that since the only dealer I had EVER talked with about this in the distant past was Fathers & Sons, that I would try to contact Mike and immediately purchase the mod through him on Christmas Eve. I found Mike and he sold me the mod at $650, and contacted Alan to verify, wherein I would pay Alan directly, and F&S would be credited their small profit. I called Alan to verify. All was set. Alan said it was OK to drop it even on Christmas Day, so the following morning I drove 2 hours through a storm from central NJ to Phila. Alan and I opened the unit's box in the back of my Outback, wherein he stated for the first time that he would not work on it if it had no serial number, as there had been some recent gray-market units from New York with scratched-out numbers. I stated that mine indeed HAS a serial number from earlier in 2001, but that I was not the original owner. He then took the EMC-1 from my car and brought it into his house, and said he'd call me back in NJ in two days. I drove back in this hellish storm to my sister's farm, then called him in 48 hours to arrange a pick-up either that Friday or Saturday. He THEN announced that the serial number of the unit indicated a Danish sale, and that he had emailed me at my sister's that fact LATER Christmas Day (after I'd returned to NJ). He repeated that he would not touch the unit, nor supply spare parts nor mods, and that I would have to share in the victimization of the gray-market! I was stunned, and drove back on Saturday to pick it up, tail between legs. I softly told Alan that I thought that he's made a bad business decision in this case because he never asked me for a serial number in the past, and he apologized for that. I asked if I should try to contact the Danish dealer or EC to get the boards swapped for newer (modded) ones, but he said that EC would probably not do that either, and that I should just sell my EMC-1 and buy a new one. Other visitors arrived at his house coincidentally, so I parted quietly rather than extend an awkward moment.
There you have it, again! I don't believe I've omitted any fact of consequence that SoS may be alluding to that Alan related to him.
Thank you all for your support, analysis, and thoughts toward finding a win-win here. Gotta go find the snow shovel and take more Tramadol....
Ernie

Well, until now, I have stayed out of this thread...

Alan Warshaw lives about 5 minutes from my home, in Wyndmoor, PA. Like me, he is just outside the Philadelphia city limits. Alan took over Hales in its final, fleeting moments. Unfortunately, Hales is no longer in business, but that is completely unrelated to Alan. I have no doubt that things were too far gone at that point. He is the US distributor for Electrocompaniet, and I believe myriad other products.

I have had the occasion to be on the other end of things with him, where he was the customer. I was only in that relationship a short time. I don't remember him ever being satisfied the first time, and I don't recall the words "please" or "thank you" being an integral part of his vocabulary. But, I do hold out the hope that there is good in all man, and I hold out hope that Alan will show it in this situation.

Like many in the high end, he was an eccentric fellow. While everyone has their good side, he left people with the impression of him being an snobbish, elitist person. Alan is definitely upper crust. He may not have the most refined "listening skills". I mean that as a person, not as an audiophile. The stubborness he is holding to in this case is not unexpected. I was not particularly fond of him, but again, my dealings with him were over the short term.

I hold the Electrocompaniet marque in the highest esteem. The product exhibits exceptional quality, both in sound and in build. In brief, it doesn't get any better than Electrocompaniet.

Technically, I am not sure who is doing the upgrade of the player, but I would have a difficult time imagining it would be him. He is not a hands on person, but seems more like a "sales/marketing" type. He is not the type to hook up a tv in his home, it takes him 3 or 4 tries to buy the right splitter for a cable. I cannot see him modifying a CD player. It is a crime to underestimate people, however, so I apologize.

Ernie, who we have all come to know and hold in the highest regard, is in a difficult situation. However, being that he has had Father & Son go to Alan on his behalf, I believe that Alan should cede this situation. This is become not a matter of business, but one of ego. At this point, with the current discussion going on here, Alan is doing nothing to earn himself potential business. Rather, he is damaging the future prospects of Electrocompaniet in the US. The market for high end audio is difficult enough right now. Factor in the mess of a distributor who does not make Electrocompaniet ownership a pleasure, and the company just may one day find itself in the same situation which developed for Jadis in North America. A superlative audio company who all but falls of the face of the map for reasons unrelated to the product.

Ernie, may I suggest that both you and Father & Son contact Electrocompaniet in regards to your situation? If I were Electrocompaniet, I would make sure that not only that the matter is put right, but that we did WHATEVER is took to erase the bad taste in your mouth. Maybe it's just me, but I would feel the need to bend over backwards to make a public display that Electrocompaniet customers and potential customers have nothing to worry about in terms of customer support.

Being local, if there is anything I can do for you Ernie, please do not hesitate to let me know. Be it legwork/pickup/dropoff/courier or whatever, it's no problem. I may have a weak mind, but I do have a strong back. If I can do anything to save you the long drive, it would be a pleasure.

GOOD LUCK!