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
Ah, distribution. So-called "channel conflict." What I love is when companies forget that their business isn't about distribution, its about designing a kick arse product and maintaining its relationship with its consumers. I should only need to mention the automotive industry in this context as one of the best examples of a distribution channel hijacking a company's focus. Ford, GM, Honda, Nissan, etc. I've consulted with 2-3 myself. EVERY company I've personally done work for wants to CONTROL its sales and service experience because its distributors has been pillaging its customers with horrendous sales experiences and burning down the rest of the relationship in the service counter where service managers drive over 50% of a dealership's revenue. Such absolute BS has given rise to certain companies taking stronger hold of the experience: Saturn, Hummer, Lexus. I worked with one that FUNDAMENTALLY is going to change the way you buy their cars because they can't stand their dealer's practices.

Interestingly enough, I've also consulted for a consumer package goods company (like Johnson and Johnson and Proctor Gamble) that had the same issue. As it turns out, CPGs have zero relationship with their customers because the darn grocery stores stole it away from them. Its the grocery stores that collect all the customer buying behavior and control how the shelves are stocked with goods. So this company is trying to create a relationship directly with customer, working with large grocery chains to drive business into their stores, but maintaining relationships directly with the customers of certain products.

So, what has this to do with EC? Their industry has probably the craziest distribution chain in the world, besides that of honey. We all know how hard it is to find all the products you want in the same retail store, and that's partially due to the distribution chain's antiquated structure and partially due to the fact that stores simply can't stock every $10K amp, $5K CDP, and a range of inexpensive items for the normal hi-end consumer who is not yet an audiophile (in the $1-2k range of components). Its also partially due to the fact that many of our favorite esoteric companies can't manufacture enough products to sell to the mass market via Best Buy, etc. Bose, and say whatever you like about their products, has done a GREAT job at recognizing that customers come #1. They sell goods in all sorts of channels: retail stores, company outlets, online direct, online retail, direct via TV commercials and magazine articles, etc.

My point is that distribution isn't a revenue and CRM strategy, its a cost strategy. If you let your cost strategy drive your business, then you end up in the status quo. If you let your CRM strategy drive your business, everything suddenly changes. EC's priciple problem is that its European, and it thinks that distribution is a country-to-country thing while the EU has open trade and free borders. No passports are required to go anywhere. In a very small continent, it'll take you a couple of hours by train to get to 2-3 different countries. Customers routinely shop where the bargains are. So, EC tries this crazy anti-competive distribution scheme that keeps every country in its own box, pleasing its distributors, but screwing their customers.

I'd suggest that EC reorient their focus and figure out how their customers like to buy their products, rather than how their distributors would like customers to buy their products...
LATEST NEWS:

The intermediate dealer (Mike at F&S) called me last night.
I was hoping that his previous offer to swap out my CDP for a modded one would cost me about $1000 ($650 for the agreed-upon mod and a few hundred for the value of a warranty?). Such heroism wasn't expected, of course...just hoped for.
Unfortunately he said that "WE can offer you a new one for $2000 and your
unit." (I sensed that the collective "WE" was used following some discussion with the distributor, and that I was being given a corporate-approved offer. Just my conjecture, though.) Mike said that Alan (the distributor) would NOT mod my unit under any circumstances (this was a change from his previous offer to mod it for DOUBLE the normal retail price: $1600 vs the agreed-upon $650). Mike had said previously that having my unit as a permanent demo was of value to his dealership, but he now says that HE could not get it modded by EC either, so its value is lower to EVERYONE!
The RETAIL IN EUROPE and WHOLESALE IN US prices of these CDPs are nearly equal ($3200). So if I give him another $2000 he's essentially buying my "untouchable" for $1200 his cost. I noted this fact, and suggested that I certainly could hope to resell my 1.5 yr old EMC-1 MkII for more than $1200, thus reducing my "buy-up mod cost". Indeed even Alan had suggested that I simply sell mine and buy a new one (yes, he regretted saying that, and I hate to uncover this little sore point, because its importance is NOT to point blame nor focus on a profiteering motive but to only note that procrastination by passing the unit on is initially attractive, but upon rethinking, not the wisest option. The collective problem is much larger than that, as we've all come to note).

Mike and I discussed that the mod did indeed originate in the US, at TALON! Wow! So maybe the easiest course is just to ask them about the mod, its parts, instructions, service...whatever they could offer? So I emailed a plea to Talon last night for some advice/service/mod. Their quick and compassionate reply included: "We have made an agreement with Electrocompaniet that we would not perform any mods. The technology behind the mod was purchased by EC and is their property. I really hate to see this type of situation." DARN!

So EC really locked this up. They cut off an independent service person (Heiz Preiss in FL...see above) in '99, and restricted the simple analog modding technology of their CDP. I was really hoping I could just send Talon the board(s) to mod.
I'm getting really frustrated with my lack of options....

Forgot to mention that I phoned Mike (the kind EC dealer) back and asked him if the only option left to me was to sell my unit myself, and wondered if it was tenable to only expect about $1000 loss after buying a NEW one at a discount as a favor from him or another EC dealer. It seems that I would have to sell my unit for almost $3000 in order to have it still cost me only $1000 to get this $650 mod.
I just can't see selling my unmodded MkII for $3k when the new wholesale is just a couple of hundred above that. And what do I say if someone asks how they would get service/parts support in the future? I'd be just passing the buck to someone else, only to potentially resurface with another fiasco, as many of you have pointed out. Sigh....
It just occurred to me that if the retail in the EU is $3200 equivalent, then the wholesale is probably about 60% of that, or just under $2k. Add shipping, import duty and brokerage fees probably totals $2400, explaining the US dealer wholesale of $3200, and the subsequent retail of $5500. I am NOT going to comment on the fairness of the margins, nor the discrepancies among pricing structures and policies, but for elucidation. Distributor and dealer networks for luxury items ARE important...but it IS getting to be a more global market, as some of you have pointed out.
It'll be interesting to see where longterm evolution leaves us, but in the meantime there're fires to put out.

I laughingly suggested to Mike that perhaps my best option is to go to Europe on vacation next year (after my wife retires from teaching: 35 yrs in 5th grade...can you believe it?) and buy another EMC-1 in the UK or wherever, saving the 17% VAT, paying the 10%duty, and drag back a 50lb box for $3k, and then sell mine for a quite fair $2k and then be done with it, getting my $650 mod for $1000 and a ton of effort. We both joked that this would work, but only further extend the problem if I ever wanted service.

So I'm still REALLY stuck here:
My wife won't let me solve the problem by buying a discounted separate DAC/modded analogue stand-alone for $1500 because of aesthetics (AND it's still too expensive); EC won't mod my player AT ALL;
the intermediate dealer won't pay much more (if any) than $1200 for it (his net), costing me $2000; and if I want to solve my problem closer to $1000 I have to quietly submerge my unit back into the open market and look for a sympathetic dealer to sell me a new unit near cost.... C'mon!
None of these circuitous bandaids are simple, efficient, cost-effective, reparatory, farsighted nor resulting in movement toward solving the larger problem of EC and product support.
I would really like EC to step in here and offer to trade out my board(s) for modded one(s), mod my unit, trade it for a new modded one for $1000 (if they're selling wholesaling new ones for $2000 why won't they swap mine for $1000 to put this fire out?), or some other easy way to satisfy my needs. (Although I'm not an active benchtech, nor have wave-soldering tools, I'm sure that I could easily perform entire board replacement, thus preventing having to send a 50 pounder back and forth to Philly or across the pond if they want to just send me spare boards to swap out).

Mike is waiting for me to offer an amount intermediate of my $1000 offer and his $2000 buy-up offer to get this $650 mod.... This is just getting way too frustrating. I'm not even listening to music anymore. I'm now feeling like I'm being punished even more. I realize that it's simply old relapsed-Catholic-upbringing stuff fortunately, and that I'm just the unlucky victim of a brutally-enforced arcane corporate policy, but I sense that my hurt is somewhat turning toward anger, as I don't sense that there'll be a fair outcome here, either on the corporate level nor on an intermediate's anxiously sought offer generous enough to not seem punitive. I wasted almost an entire day of my time driving in a severe storm, and am still willing to pay 50% more than an agreed-upon price to buy a service from this company, well after they screwed up, and no-one's listening?!

Well, I DID rewrite and forward my plea to EC, and I guess they won't become aware of all this until tomorrow (Monday AM). At that time I'll be undergoing my 3rd spinal epidural steroid injection for this friggin herniated disc, so I'll be out of it for a couple of days. Even writing cogently with all this Tramadol and Neurontin I'm having to take is much effort.
I'll try to keep abreast of all your input and support in the meantime.
Thanks again, everyone. Gratefully, Ern
all i have to say is EC sucks. there are other high end electronics companies that have figured out a MUCH better way to deal with customers. why can't they?
I guess it's only human nature. People want the low prices available from internet based sites such as Audiogon, but they also want the level of service offered to customers who buy new from a bricks & mortar store.
Jeez, Ernie, $2000 plus your old one for a new model sounds pretty good to me. How much does the new one sell for? How much is your old one worth now that you've driven down the market value of used Electrocompaniet cdps? My guess is that Mike at F&S is offering to take a loss on the transaction.