HELP Electrocompaniet stole Christmas

Whatever the reason the thread was temporarily closed, thanks to Audiogon for opening it again. Good move. I am sure that we are all pulling for Ernie, but this issue has become bigger than one fellow's bad luck and one distributor's poor judgment. The company itself needs to step forward and take a position, as appears may be happening at last.

Didn't notice that the thead was temporarily closed if it was, but I'm glad it's not now - that would be as irresponsible at this stage as what the distributor did. Fingers still crossed...

Swamp...but how are you going to do that? Ask for a serial number and then send it to BOTH a local distributor AND manufacturer and ask them if they'll support it in the US?
Pretty tiresome, and maybe necessary, but certainly not a model for desired consumer behavior in the 21st century global market, eh?

Ernie - I have been following your frustrating ordeal in this thread (and Audioasylum) closely as I too, have what is considered a "grey market" unit. I bought it used, knowing there was no warranty, but unware that there also was no serial #. I was dismayed to learn through your trials, that the upgrade would not be possible. I am very happy that EC has contacted you and you will hopefully get the upgrade parts. You have exhibited class and patience despite the frustrations and I only hope those of us who also have an "untouchable' EMC-1 will be able to obtain the upgrade kit and continue to enjoy this most euphonic CD player. Cam

Ern- glad to read you're feeling better. Maybe the re-surrected thread should be titled "How the distributor stole Christmas", although after carefully reading and thinking about the subject, this is a VERY complex issue. Be assured that I will do s/n checks on any foreign gear I am thinking about buying from now on.

Sounds like good news Ern, let me know if anything changes.

Peter

THANK YOU FOR REOPENING THIS THREAD!
Some of you may know that this thread was closed for awhile. I wrote to A'gon and started a subsequent "continuation-thread" entitled ELECTROCOMPANIET REDUX. They declined to post the new thread, and I guess reopened this one. Ok. Phew! The timing was most unfortunate because:

This morning I received a short email from a tech at EC/NORWAY informing me that he had read this thread, apologized for the mishap on Christmas, and would assemble the diodes and capacitors that comprise the mod and sell them to me, with schematics for installation, after he gets the parts' prices in a couple of days. Maybe it's better if I just quote his response, but I don'y know how to "cut and paste", so I'll be back later.

No mention was made of reviewing ECs support policies yet, but I'm glad that this first positive step is being taken.

I was SO THRILLED to get his email, and then went to tell you all and found the thread closed! What a slam-dunk.
Glad it's back, as I REALLY want to ensure that EC's reputation is NOT harmed by leaving this thread closed prematurely. EC may come through yet!

Thanks, A'gon, for seeing the light. Now why did you close it in the first place?

I'll post news after hearing back from the EC tech.

One of you was right: I WAS getting depressed by all this. And today for the first time I listened to my system, enjoying live feeds of Chopin's Preludes on my Dynalab. Maybe I'll approach those blue lights of my EMC-1 soon, too.
Thanks again. Ern

Zaikesman, thank you for acknowledging that I have a right to my opinion. I respectfully acknowledge that you have a right to yours. As far as I can tell the sun will still rise tomorrow if we disagree.

Onhwy61, I have reread your post of 1/1, and see nothing there to ameliorate my impressions of your positions on this matter, but you of course have your right to your opinions. What you basically say is that Mr. Warshaw doesn't strike you as being the "smoothest" of businessmen, that he should have stated his restrictive policies up front (duh!), but that you're not sure that Ernie really has "anything legit to complain about". Not exactly a searing indictment of the distributor's actions and policies. You obviously feel that Ernie made his own bed, and that he has not been enough wronged to warrant some sort of palliative remedy. We are still most emphatically not in agreement here.

Zaikesman & D the M, please point to the specific statement(s) where I am supposed to have defended the actions of the distributor. The intent of my posts is to state that any buyer has an obligation to themself to do their homework when purchasing expensive equipment. Please see my 1/1 posting to see what I actually wrote about the distributor's actions.

Zaikesman... I am in TOTAL agreement re: your response to Onwhy61. What is up with people that DEFEND an F-'d up system that treats customers like DIRT?

He was PAYING FULL PRICE for an upgrade, after HE HAD CONFIRMATION by the distributor that it would happen! and then DENIED??!

HELLO?! McFLY!!!!

UPDATE:
I just got back from the spinal injection and feel wiped out, but thought I should put to rest the notion that there is ANY expectation on my part for a communal finacial pot-passing! I appreciate the expression of support intended, of course, and remain grateful.
As I said I have emailed EC to see if they can offer technical support, and of course read this thread so as to become apprised of the larger issues.
I must disagree with one poster re my responsibility to apply due diligence when purchasing a "nearly-new" item. Although I did expect to POSSIBLY be denied WARRANTY service as I would be the second owner (although this is illegal in Massachusetts), I didn't expect to have to ask if "I would be denied any and all paid services for this unit forever". There's a big difference. Heaven help any EC owners who decide to move to North America from overseas and bring their units (after determining that they're voltage-selectable) and thus thinking it would be worth carrying the load on a plane! Is everyone going to have to ship their units back to Norway for service/mods?...or "bribe" Alan by coughing up a lost $800-1k distribution profit? I'm sorry...I don't mean to fan the flames. I'm really exhausted, will await EC's reply (soon, I hope), and continue to thank you for your ideas and support. Ern

I got it covered, dont worry , end of thread

I can't believe this! You want us to all donate money to buy a player from a company that we have decided needs to learn a hard lesson by losing business??

NO WAY! If I donate money, it'll be for a unit by Ayre, Resolution Audio, or another company known for it's excellent customer service!

Zaikesman, I didn't mean to imply that the issue was one of warranty (though my poorly written sentence certainly could have been read that way -- I was trying to combine two ideas). This is not a warranty issue. It is an issue of poor communication about policies and the unwillingness of the distributor to acknowledge any culpability due to that poor communication. That is the primary driver behind my disaffection with EC.

What the response to this instance points out is that EC seems to have painted themselves into a corner with their past practices and contracts with distributors. They seem stuck. As mentioned, that is seldom good for the consumer unless the distributor is very good.

If Anthony (Chichiuno) puts up 1k than Ernie just needs to put up the other 1k which he felt he might to with Father and Sons and Ernie gets what he thinks he wants - anew EC upgraded player.

Anthony/Chichiuno: If I might presume to take a rather large liberty here and respond for Ernie, who is probably unable to do so himself at this time, while your heart is in the right place and you are *very* generous, Ernie already has himself a perfectly good CDP, and I'm sure he would thank you, but say that your money can be put to much more important and appropriate use donated elsewhere in the world.

Onhwy61, you and I are obviously just gonna have to agree to disagree about this issue, as I am firmly of the belief that you are missing the forest for the trees, as well as conveniently ignoring the flip-flops in 'policy' evinced by the distributor's actions. 84audio has it right: How could Ernie have been expected to "know" anything about such a load of arbitrary, contradictory BS? I say to hell with the franchise agreement, this situation is much simpler and clear-cut than the distributor's position you so valiantly defend would have us believe. The guy has screwed Ernie over, and is now screwing up his market as well, which means he is screwing over not only the consumers, but also his dealers (and quite possibly the manufacturer as well, though it seems as if they may be complicit in this whole scam, or at least overly tolerant of the distributor's apparently less than stellar record and highly questionable motives/ethics - something that seems may also be the case regarding their Danish reseller).

Rationalize it any way you like, blame the victim if it gives you a sense of propriety, but your contention that Ernie was operating in a free market with open information - especially as far as aftermarket service is concerned - is laughable. The whole point here is that the company and distributor are intent on creating a closed market, apparently at any cost in customer good-will. It is they who will need protection from the downsides of their bad decisions. To paraphrase a couple of well-worn cliches using a mixed metaphor, the 'rules' in this case are both the last refuge of a scoundrel, and the hobgoblins of small minds. Ernie is being penalized for nothing he's done, and most of us clearly aren't copacetic with that. Barring any last-minute heroics, maybe you can buy his CDP from him and be EC's last customer among the members of this forum, since you're so comfortable with their policies as long as you know them in advance - and we damn sure all know them now (and I know yours and you know mine.) There's too many other good alternatives in the marketplace for the rest of us to have to tolerate, much less condone, this sort of game-playing crap. Sorry, but that's the deal as most here see it. (Now, why don't you tell us what your beef with Sony is about, instead of just asking us to participate in a boycott without any reasons being given?) Respectfully but resolutely yours, Z.

You cannot target Electrocompaniet, Many other manufactures
has the same policy, Some manufactures even post warnings of grey market sales, and warentee issues with grey market.
its a buyers beware type of issue, For everyone , for any product. As far as the other units, thats not the issue here....Ernie had expressed much liking in Electrocompaniet EMC-1, went to great lenghts to get it upgraded,Ernie been a long timer here, and likes the product, so I do not mind to contribute..... last thing Alan would of thought it would be a grey unit at his doorstep. It's a a bad situation for both parties, But Alan does have the right not to service product... he did take the time and Money to import the product. And he is the USA distubutor...

Zaikesman, you need to familiarize yourself with a typical distributor/franschise agreements. These agreements are very accurate in reflecting the relative power of each party in a particular market place.

Subaruguru purchased a grey market product. Immediately prior to his purchase he could have contacted EC or it distributor, determined his purchase was a grey market good and found out EC policy on service issues. For whatever reason Subaruguru did not take these steps. In an open marketplace information is power. If Subaruguru had had all the info he could have cancelled his purchase or maybe he could have pressed for a lower purchase price. It would have been his informed decision to take such a risk. As much as some people think it's unfair, in an open and competitive market there is a penalty for not being fully informed. I guess it's human nature to not only want the low price benefits of a free market, but to also want some downside protection from ones own decisions.

BTW, in a completely unrelated action, I have been boycotting all Sony products since March, 2002. Everybody is invited to join my crusade. Together we can bring that corporate giant to its knees. AUDIOPHILES OF THE WORLD - UNITE!

Ernie, better luck with your health! Pending a quick and satisfactory response from Electrocompaniet, if we were to donate anything, may I suggest that it would be with the stipulation that it could be towards any unit he chooses, so long as it's not an Electrocompaniet.

Chichiuno, that's a very generous offer! But still, what will happen with the other 9 grey market players that are still around? Who will service them if something goes wrong with them? And I am not talking about upgrading, but only servicing (for a fee) them. Pablo.

Onhwy61, the manufacturer's customer is the consumer. The distributor's customer is the consumer. The dealer's customer is the consumer. Audiophiles are the consumers - if the consumers stop buying the product from the dealers, then the distributor and the manufacturer are out of business.

The manufacturer's policies concerning aftermarket service are directed toward the consumer. The manufacturer is in the business of attracting and satisfying customers, so that they will attract even more in the future. Those customers are the audiophile consumers; the manufacturer is not in the business of trying to attract ever more distributors. If they direct all of their energies toward satisfying the distributor, it does not mean he will purchase any greater amount of product for distribution. If, on the other hand, they direct none of their energies toward satisfying the consumer, that does mean that eventually the distributor will be purchasing less product.

You say that Ernie has a problem because he purchased what had originally been a gray-market unit. That is not accurate, because it is circular reasoning. Make no mistake: Ernie has a problem because the manufacturer's and distributor's policies are set up to give him one. Ernie had no problem with his unit because of its provenance. It is the manufacturer and especially the distributor who apparently have a problem with Ernie's unit because of its provenance. The unit's provenance is not Ernie's fault, and it shouldn't be his problem.

Merely saying that the rules are the rules doesn't make the rules smart or fair, and if the companies involved don't make rules that are smart and fair, the consumers will retaliate with the power of their pocketbooks. Then the manufacturer and the distributor will be left with just their rules, instead of customers. It is not Ernie who needs to rethink his decision to buy his CDP as being a mistake, it is the distributor and the manufacturer who need to rethink their decision not to offer their services for sale as being a mistake.

Ozfly, agree to what extent we may, nevertheless your second-to-last sentence implies that in this case, it was free warranty service that was the issue. It was not, though on your last sentence I think we can all agree, and for more than merely "some hint".

I say lets pool to get ernie a new Emc1 Up player, I am willing to donate $1k, what does everyone say? any others willing to contrubute? call me below!

Anthony
Aberdeen Components
6315820677

Zaikesman, I couldn't agree more. My post pointed to the reality of the day, not to an ideal by any stretch of the imagination. Onhwy61's comments reinforced those observations. Manufacturers are often handcuffed by their distributors because the distributors drive revenue growth. Whenever a company relies on independent and exclusive distributors, it will lead to an inevitable decline unless the distributors are very customer-centric or unless the manufacturer took great pains in framing the right types of contractual obligations. It doesn't appear that either of those conditions are met in this instance. (We've yet to hear from EC though ... so there's some hope left) While I understand the business and economic realities of the situation and am very empathetic, my primary obligation as a consumer and audiophile is to exert pressure on the distrubutor via a personal boycott. I remain committed to that. I don't expect the same price in each region of the world. I don't expect free warranty service on clearly gray market units (in this case, that wasn't made clear nearly soon enough). I do expect some hint of common decency towards customers.

Dolphin, what can the distributer say? First he says he will do the upgrade, then he tells Ernie to sell it and dump the problem off on some other unsuspecting person, then he says he will do the upgrade for twice the price, then he says he won't do the upgrade at all. Wow! Call me a fool--I purchased a dac a few months ago. This is beyond unacceptable and everyone should consider this before buying EC. Tortching the resale value of my dac is industrial strength stupid but right is right.

Amazing that we havent heard ANYTHING from the distributor at this point. I think their silence speaks volumes!

EC's customer is not the consumer, but the distributor. It seems that they are putting their customer first.

Subaruguru has a problem because he purchased a grey market product. If he had an US authorized unit, then the distributor would have performed the upgrade. I think the real lesson here is when buying used, know what you're getting and do your research. A careful buyer should get the product's serial number and contact the manufacturer for their service policy regarding used products.

Y'know, I do feel compelled to add that if Mr. Warshaw or the folks at EC ever consent to view this thread, they shouldn't just stop there, they should also read the archived one entitled "Companies who have gone above and beyond", where I don't recall them ever being mentioned. My experiences I relate there, and those of so many other memebers, stand in stark contrast to what we've seen so far in this case.

My friend has a new upgraded model and I have a 24/96 one. Together in the same system you cannot tell the difference on any regular basis. Kick in my Chord DAC 64 and that blows everything away - not even close. To think I almost bought the upgrade DAC and not the Chord is scary - of course then I wouldn't know how much better it could be. You have a great player and an even better transport. Life is good - save your 2k. Let Mike ship you a new one to even see if it is worth the money. If not ship it back - only cost you freight.

I just can't figure out why Ernie is even considering getting rid of his current EC player for the new EC unit, if had half the problems he did I would set the unit a flame and through it through Alan's window(he couldn't trace it back to me due to the lack of a serial number). And I would get a different player, maybe the Ayre, Audio mecca, audio aero or something and never look back. I know the EC players are suppose to be good, but I would be god damned if I would ever give this company a nickel of mine again. God forbid something happens to the new unit, you would have to deal with Alan again- though it would be a different location because his workshop would have burnt down. But that's just me, I understand problems and what not but this is blowing my mind, how this Alan is still able to walk under his own power is simply a miracle. Sell the cd player and never look back- and everyone remember this thread and tell everyone about it!! I have seen that happen a few times already since this has happened, if EC is this ignorant then they deserve the reputation they have gained/lost here.

On a more important note I hope you are doing better Ernie, it sounds as though you have ran through the gates of hell and back- remember when your down the only place you can go is up :) ~Tim

Same level of service yes, Onhwy61, but I think we realize we may sometimes have to pay for it. No level of service at all is a totally different story.

Ozfly, I must agree with Leftistelf's basic contention (if I may paraphrase) that the notion of the dealer having to somehow persuade the distributor that the customer should be #1, and the distributor then having to do the same with the manufacturer, would be completely f***ed up if it were true. If a manufacturer can't be customer-driven enough to figure out and adhere to this philosophy on their own without being pressured from below, then they richly deserve their undoubted ultimate fate.

Ernie my friend, I'm afraid I have to say that your reluctant statement about maybe having to "quietly submerge (your) unit back into the open market" is, in light of this thread, beginning to look almost as wishful in its thinking as your provisional hope that you might find "a sympathetic dealer to sell (you) a new unit near cost".

As we surmised above, it's all up to Electrocompaniet now - let's hope they see the light and do the right thing. At the very least though, this is already a great thread for the ages - nice work, everybody! (And thanks to Ernie in particular for dilligently staying on top of keeping us abreast in detail, despite his handicaps of ill health, compromising medications, and lousy typing technique, not to mention general frustration. Hang in there buddy, and best regards for your impending surgery - get well soon. :-)

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.

ERNIE,
Forget this whole mess plug your cd player back in and listen to your music again. This mess is NOT WORTH YOUR TIME AND YOU ARE GETTING DEPRESSED . Do not let the distributor get the best of you, remember HE has to live with himself and look in the mirror every day. Be happy with the 24-192 player. This new upgrade might even not be as good as the last one. I have the 24-96 and I am not upgrading it . You can not win some times so do not let this change you . Life is to short Enjoy !

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.

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?

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

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...

I like Resolution Audio's method of "distribution": all through the internet, direct to customer, with a trial period for anyone interested. No middle men. And you can see for yourself, in YOUR system, what the piece sounds like. And, everyone gets the same price... fair, smart, and appreciated!

Leftistelf, you raise a number of good points (with Unsound's caveat) and all companies must now face increased price transparency. But, where should CRM (customer relationship management) be applied? The company must walk a fine line between their customers (distributors) and the end customer. It is distributors and their networks that still drive most of the business. Plus, distribution costs do vary widely from country to country as transportation costs, duties, insurance, operational risk, financing costs, economies of scale and exchange rates vary.

If the company could cut the middlemen, they would. But the distributors serve a valuable function and drive demand (via supply availability) for the product. The internet has not yet come close to replacing that channel in most businesses. It seems to me that a forced equalization of pricing could end up bankrupting the company. Countries with higher cost distributors in many areas would vanish as would the distribution and product demand. Countries with lower cost distributors would be charged a higher price since demand fell and fixed costs would have to be recovered (by the way, r&d would also suffer). I won't argue that price differences only reflect these cost and risk differences, but I will argue that most companies simply can't offer a product for the same price in all countries.

The best long term solution is clear and you point it out eloquently. But, you have to get through the short term first and differential pricing based, at least on large part, on different cost structures is something that is here today. I'm hardly defending EC's actions in this particular case -- this situation is a no-brainer for most people. Rather, I'm suggesting that many companies need to balance two kinds of customers -- their distributors and their end customers. Focusing on only one of these will kill the company unless, like Outlaw, they started off without distributors so don't rely on them today.

So, the company must focus on their distributors. In the same way, the distributors must focus on their dealers. The dealers must focus on the customer and must convince the distributor to do the right thing by the end customer. The distributor then places the pressure on the company to do the right thing for the customer. In theory, this works great. In practice, a bad distributor with an exclusive franchise can really screw up the works. Then it's up to the consumer to place pressure on the company through buying elsewhere. Smart companies demand that their distributors maintain some consistency in service and customer relationship practices across all boundaries to avoid potential disasters. Let's see how smart EC is.

Leftistelf, I agree with your position re: customer relations/service. I think your comments on the airlines may be a bit incomplete. Airlines have been troubled with bankruptcy for a very long time. The airline industry is particularly sensitive to world affairs, and the current state of the world is not helping the airline industry.

This is simply Byzantine and Neanderthal. I recognize that some companies' management decides to price products differently in different markets. Their hope is that their pricing isn't transparent because customers dont travel that much, dont have friends in other places, or are too lazy to get competitive quotes on a product.

Companies have gone through GREAT efforts to make this happen. After all, why should the wealthy who can pay more, pay what the poor pays? Its all about segmenting customers and applying a pricing policy. Its like B-School 101. So, certain companies brand their products differently or distribute under different names to hide their pricing (alcohol companies, automotive companies, etc). Some forbid publicizing their prices, hoping that ignorance would be bliss (check out some camera gear in shutterbug sometime). Some use grey market warranties.

The essential element is to do anything a company can do to avoid price transparency. Basically, don't let a customer buy something for less than they are willing to pay for it by not telling them there is a lower price.

The biggest con artists, before the mid 1990s, was the airline industry. No one had a clue what the right price for a ticket would be. Basically, some clueless $10/hr telephone agent would use archaic text commands in a green screen terminal to call up prices based on the customer's request. The problem was, that airlines price every seat differently on every flight. They call it Yield Management. It gets so damn confusing to the customer, you end up in mini revolts about airlines not sharing accurate pricing.

Then the internet happened. Customers could log into expedia, etc. and see prices for all tickets on competing airlines, and change dates/times/flights to get a cheaper price. You know what happened?

The cheap, who always traveled cheap, traveled more because they realized just how much cheap travel there was. The business men, who routinely got screwed by the airlines by paying full fares, got HUGELY upset and starting booking cheap tickets. The airlines suddenly became awash in people wanting cheap travel, but their infrastructures cost too much for those low profit customers. And now, one by one, they are going into bankruptcy.

So, what does this have to do with EC? The company thinks it can swindle the customer by pricing items differently in different markets. Its probably right in some regards. However, the problem with goods vs. services is that goods have a lifetime...and they may end-up anywhere in the world after their initially sold. So, while EC practices 1980's pricing strategy games with its consumers (pissing them off more now than ever because we can SEE the european and asian pricing), the consumers eventually want to sell their products as they continue the road toward audio nirvana. And you know what, EC? These customers sell them to the highest bidders, just like you're doing on new products because now there are internet sites, like this and ebay, that makes pricing COMPLETELY transparent. And voila, the products end up in the USA.

So, what is good for the goose isn't good for the gander? EC can sell its products for whatever it likes to specific markets, but restrict free trade of the used products by its customers through grey market warranties and explicit policies to not upgrade so-called "grey market" units? Its no wonder that customers get angry.

You know what I like? I like companies that warranty and service their products because they know that the products and the accompanying services are their ONLY vehicle to make a customer relationship. Companies that dont understand this are going to go the way of Communism - extinct because the governments/companies forgot that their citizens/customers are their #1 objective. Customers should be anyone using one of your products. I could cite a dozen CRM books on this exact subject, but I'll let EC figure out how to manage their own customer relationships. Hint: customer acquisition is the first part, initial customer retention/cross-selling/servicing is the second, and 2ndary customer retention/cross-selling/servicing is the third. Your competition shouldn't be on PRICE, it should be on product differentiation and COGS.

I, too, have been shopping for certain components, a preamp and a CDP. I struggle with BAT because they wont support 2ndary customers with the initial warranty, so I'll probably go to a company like Thor or ARC that warranty products, not initial customers. As far as CDPs, EC wont get a nickel from me, either as a customer of new products or as a customer of old products. I want a relationship I can trust when buying a $5k CDP.

Subaruguru,

I've read with great interest your past threads (especially the one detailing all your system tweaks). I also own an Aleph P & Aleph 2s - I love them.
After seeing your problems w/Electrocompaniet, I'm going to talk to my local Pass/YBA/Electrocompaniet dealer here in Phoenix. They are very fair & will check into this! They just took on Electrocompaniet & sold their first EMC-1 a week ago.
If the distributor is going to be this hard-nosed with you, he does not deserve anyones business!

Ljgj...For the record, the price I offered you for a new ECD-1 is what we, Father & Son Audio, sell ALL new ECD-1 units for (give or a take a few bucks). I was giving Ernie a HUGE discount because I was simply trying to help him out with an alternative in a sucky situation.

For those that care, Ernie and I are still trying to work something out. I am sure he will let everyone here know the details if/when we decide on the best solution.

Best Regards...Mike - Father & Son Audio

After reading all these threads where is Alans reply to all this? He seems that his mouth and actions work okay when dealing with the innocent people who bought his product and not giving them the courtesy , and service they deserve. I am sorry I have a Electrocompaniet product now. It is time for a Change and for the Company and Dealers to get there heads out of the sand. Is the all mighty dollar your only concern? Treating people with compassion who have invested in your product is the right thing to do, just wait until your sales start to fall on Electrocompaniet products than it will be to late.

I have read this ENTIRE thread (phew!):

1) Thanks for everyone's REAL experience dealing with Alan. It is necessary in order to confirm Ernie's side of the story (since SOS said there were apparently two different stories being told).

2) Alan is royally F-ing up. EC and Alan have a chance to turn this into a good situation, by publically and quickly finding a solution to this specific mess, and then to come up with sensible policies that deal with grey market players.

3) Completely agree with Sean, Zaikesman... thanks for being bold and eloquent guys. This is downright bad service, and reflects poorly on EC. If EC doesn't come up with a solution for Ernie and others with these players, than it just confirms EC as a company that doesn't value it's customers, is out to make a buck, only wants to protect it's dealers/distributors at the expense of customers, may not support other products it carries, etc, etc.

4) There are SO MANY other options besides this CD player! When you're spending an arm and a leg for electronics, you better get great customer service.

5) I have a used VAC 70/70 MKIII that has had some intermittent hum issues: Kevin Hayes has ALWAYS taken my call, spent WHATEVER time necessary to talk me through the "next step" in solving the problem, and has ASKED that I KEEP HIM INFORMED and to CALL BACK with WHATEVER I may need, and offered to take the amp back to look at it at my convenience!!, even though I told him I bought it for over 60% below list price! After having this kind of service, I realize that this IS HOW IT SHOULD BE!

Good luck Ernie. I hope you get in touch with EC and that they see this thread. And yes, I believe that this should be reference on AA. The more public the mess, the more pressure. Manufacturers/Distributors must realize that there is a STEEP price to pay for less-than-STELLAR customer service.

When my amp went down after three weeks it was sent to Alan. It took six months to get it back. It didn't work - sent it back - it took three months to get it back - it didn't work. I took it down the road to a local amp fix-it guy and had it back in one day. Alan's excuse was trying to get a technician and then he said he had no excuse. He said he would send me some cones to compensate me but never did. In that time I emailed EC in Denmark and they replied that they have the utmost faith in their dealers and distributor. So what does that mean? I still had no amp for almost a year. I asked the dealer for a new amp - he said no but if I sold my amp on Audiogon he would help get me another brand like Gamut at a good price. How do you sell a broken amp? Good luck with Father and Son - they may be your only help or sell it and buy a new one. It will cost you a fortune to do that. The used market on EC compared to the new price is quite a difference. I emailed Father and Son and asked for their best price on a EC DAC and they responded around 1750 shipped. They will sell you one for 1500. He harped when I asked for 20% off. Another dealer offered one to me for 1550 when I just asked for his best price. That may be your cheapest route for the upgrade and flexibility on future transports. I called Alan to check on the 1550 dealer being legit and was reminded of why I didn't want to go in this direction. I had emailed Alan earlier asking for a break on price on the DAC as compensation for not having my amp for so long - he did not respond at all. This is why the high end is in the shape it is in. It will self destruct as many companies will and have, Competition is a no-no in the industry and the customer should be happy with you as a dealer and not the reverse in too many cases. I have probably said too much in this case but I hate when someone gets the shaft. I hope everyone comes out for the better in the end!

http://forum.audiogon.com/cgi-bin/fr.pl?aamps&1041706030&openusid&zzTok20000&4&5#Tok20000

Ernie, I think you have a soul mate.

KF

Sean's response to Sos's first post seems perfectly on target to me. The warranty verbage is completely moot. This problem exists primarily because one arm of EC wants to make sure that their cut of the profit stays as big as possible above all else. It looks like they've run into and tested the boundries in this instance.
I don't know Sos, but he might try to employ better critical thinking skills when posting in a contentious environment. Analogy is the weakest form of epistemology, and the Covrette comparison he used is as flawed and poorly thought out as any I've seen on this site. The EC unit in question here is not a used Corvette and there is no warranty issue. There is also nothing remotely analagous to a rolled back odometer in this case.
Generally, dealers and distributors do not design or build components, they have value when they can make intelligent observations, offer sound advice, or make a product available. In short, the real worth of a middleman in this industry is predicated on the quality of service he provides. So far it doesn't look like Ernie has received anything resembling good service. Hope raising the body count can help EC get this right.

I buy alot of greymarket video and camera gear from those dealers that you see from NY. Most you see are those strickly mailorder ads in Magazines. Most are located in Brooklyn Ny, by the shipping piers. I went to alot of these
middle of no where hole in the walls, where they do not allow customers go (find to their Secret locations (but wad of cash in hand, makes them very weak, lol). You can get brand new gear, with a third party warentee" Being aware it's grey, but new, I am aware if the product fails, or needs repair, I will take a loss. so this if figured in to the "SAVINGS". Being that I always had very good luck with Electronics, Warentee on such never bothered me.
I did however had a Canon lens go to crap, costed me about $450, I just threw it a way. with high End Audio gear, I am carefull with, usually on a purchase, I will obtain Serial numbers, and contact the manufacture yo find status of warentee, and it is legit, before purchasing. It is Buyer beware, before purchasing ANY product used or New, do some research on the item, First step it to ask seller for a serial number, their way of a responce will give you a good insight what your dealing with....
Could be worse, the Player could be on a Hot list, then you would of taken a really good loss. As the player would of been returned to the rightful owner..... check out Tag McLaren site!

http://www.tagmclaren.com/great/sounds.asp

So look at the bright side, you still have a player!

Man, I am itcing to get my hands on an Electrocompaniet. At first, I was only atttracted to their products because of their mellifluous brand name - if the name sounds good, the products gotta sound good is my theory. But now it seems, they are so hard to get ahold of and so exclusive, if I get one I'll be pretty special.

Oh, hmm, how did those cdps get into the hands of that gray market dealer?