Avoid Abes of Maine - rip off

[HTnewbie]

JDJ - I bought the Mack with the 2500 without researching. ARGH!

 

[JeffreyDJ]

I'm sure it will be fine. I think with the philips you could cancel within 60 days and get a full-refund. If that's the case with MACK, you could research a bit further and see if you can get one from another source. I also don't know anything about the Yamaha extended warranty, but when I registered I was offered one through them as well. Might be worth checking out.

 

[WilliO]

I hope everything will work out for you, HTnewbie.

I got my RX-V2500 from an "unauthorized" dealer mentioned earlier with the Philips warranty (I took my chance and did not buy the warranty however). The first unit arrived defective. The replacement unit worked fine since.

I noticed from the pictures, that the tape at the top of your box was still sealed and intact, only the edges that were torn. How could it be possible that someone take the unit out without ripping the whole tape open?

I ask the question because my replacement unit arrived with the same condition, with the tape torn at the edges but still sealed at the top (the first unit arrived perfectly sealed). I also noticed that my replacement unit did not have the paper stickers on the front of the unit like the first one did, but everything else looked fine as "mint," and it has been working fine since.

Again, best luck to you.

 

[sjdgpt]

Long winding answer

I have often wondered how these guys get their stock without buying stuff off the back of trucks.

Not wanting to get anybody paranoid... a portion of the units are really from the "back of a truck". Usually you won't find those "off the back of a truck" units at a fulltime company, rather they will be sold by somebody (often that comes and goes) on one of the auction sites or at an obscure website. The tip is when:

A: the seller only has very, very few units to sell.
or
B: "takes orders" for your requested goods (ie "let me know what you want and I will get it for you").
or
C. Sells at really obscenely low prices.

Typically the seller is a guy working in a warehouse somewhere and slips the requested goods in his truck at the end of the day. This kind of stuff has been happening since the beginning of time. The web is just making it easier to unload the stuff at a really big profit.



So where is most of this stuff actually coming from?

Most of the stuff sold is "excess inventory".

The owner of an independent camera store that I used to frequent when I was in college was kind enough to give his cliental a little lecture in small business economics and the Japanese camera body manufacturer.

The question was raised.... How can you compete with Service Merchandise (SM store located 200% yards from his store).

For those you that forgot, Service Merchandise was a pretty big outfit in the 70's and 80's. Lots of stores in the chain that sold electronics, jewelry, children's toys, luggage, sporting goods etc. I had friends in college that worked at SM and on any given Saturday they could have customers lined up 6 deep for 12 straight hours at the checkouts waiting to buy cameras, electric razors, stereo equipment etc.

So how would an independent camera store compete with the SM buying power?

Answer. Simple. "I out buy them" .... "on the stuff that I want to sell".

The important part of that answer is .... "on the stuff that I want to sell".

His example was a Japanese camera manufacturer that had an interesting sliding discount scale. Either you buy A LOT of cameras bodies (ie Service Merchandise) to get the big discounts, or you buy a big MIX of products, many of which you did not want.

Service Merchandise just bought a few models of the Japanese camera body, and they bought A LOT of them. (somebody told me at the time that SM was considered to be the second biggest seller of cameras in the USA ... second behind Sears)

The independant store owner bought:

More than a few from column 1 .... the premium camera body that he sold to the real professionals. Service Merchandise was never going to buy this camera body, and he could sell the camera body at a very fair profit margin.

LOTs from column 2 .... the near premium camera body that he sold to the die hard near professional photographer that was the bread and butter of his cliental. Again, Service Merchandise was never going to buy this camera body, and he could sell the camera body at a very fair profit margin. He had to grossly overbuy other catagories of product to be able to receive the additional units from column 2.

More than a few from column 3 .... the pretty good camera body that was desired by the wanna be professional photographer .... the camera body that we used for the college newspaper .... and the high end camera body sold by Service Merchandise. Because SM was treating this as their high end camera body (with the corresponding expected low volume of sales) they (SM) tried to maintain a pretty good profit margin. ... they did not overly discount the camera body. His (the independant's) profit wasn't as good as column 1 or 2. But he always had the camera body in stock, and he only had to come close to SM's price. At the end of the model year, any left over models would be sold at a big discount through his store. Even if he had to sell the units below his cost, he needed to purchase the units from column 3 to support his purchases of camera bodies from column 2.

A few from column 4 .... pure highend hobby camera body, not a bad product, and the primary model sold by SM .... often at a huge discount. The independent stated that there was no way he was going to handle the camera body for just a few dollars profit. He bought the camera bodies just to sell to his regular cliental that were buying the camera body for a relative etc. He did not try to sell the product, and his price was some $75 higher than SM... a big price swing on a $200 camera body. Fortunately, he was not forced to buy a lot of column 4, because he bought from column 5.

Lots from column 5. A pure hobby camera. Sears, Kmart et al were the primary sellers of this camera body. He (the independant) bought LOTS of them to boost his volume to get his discount up on the products that he actually sold. "Where were the camera's in his store?" They are NOT. He sold them lumpsum upon arrival to his brother-in-law (who owned one of those mall stores chains that sold stereo equipment, refrigerators, lawn mowers, cameras etc). Even if he had to sell these camera bodies at a price far below cost, he could do so, just as long as he protected his profit margin on the column 2 camera bodies.


Second note.

I work with several Japanese industrial equipment manufacturers.

The Japanese home office does not always treat the US company as wholely owned subsidiary, rather the US company is often treated as a "customer" of the parent corp.

Therefore, the US company (think YamahaAmerica DenonAmerica PioneerAmerica SonyAmerica etc) is often forced to buy packages of products (specific quantities from each product group), rather then buying the products that would more desirable in the US.


What is sometimes claimed as B market is actually excess product that is being dumped by the American subsidary of the Japanese parent corp. Which explains why some companies have dedicated B market resellers with seemingly unlimited quantity of B market products. By selling the product without the standard warranty, the American subsidary can shift costs and reduce the selling price of these units, just to unload the less desirable units as quickly as possible.


(remember, estimated warranty costs are attached to every item covered by a manufacturer's warranty. If the estimated warrant costs can be removed, the selling price can be {and should be} lower).


Another source is the independant dealer (as noted in my previous example above), that buys up a mixed package of products, and then bids out his excess inventory to online companies for disposal. The excess inventory may also include some return products, showroom demo's etc, which is why many of the online companies may advertise the products as B market. This also explains why the online company will have periods that they are "waiting for more of item #123" ... they have their bid into one of the small independents for his/her excess inventory of stuff that he, the small independent dealer, had to buy, but does not want to sell within his store.


The final source for B market is truly the B Market. The B Market vendor buys up defective, product returns, etc and repairs and repackages the product. With midstream and high end audio, I suspect the real B Market goods are actually quite small in number..... it is really the excess inventory being dumped on the market.

 

[Buckeyefan 1]

So buying "B" materials is perfectly fine with a large enough discount?

 

[sjdgpt]

Generally..... Yep, go ahead.

But I disagree with the high prices that audio B market goods are being sold.


In my opinion:

A: The warranty is being pulled

and

B: Direct Manufacturer support is being pulled

I would expect a really substantial discount.

Really substantial.

10, 20 or even 30% isn't going to hack it. Not even close.


I deal with this issue every day (from the vendor's perspective).



In most cases the manufacturer provides all customer technical support (phone or direct visit), maintains complete warehouse stock of all possible parts needed for warranty repairs, and if the warranty is specific as to the cost of labor, also accepts the labor cost should the manufacturer be responsible for those costs.


These are pretty big costs. Surprisingly big. For one of our Japanese manufacturers the estimated cost of the warranty for a two year period is 31% of the wholesale price of the unit.

That means the $1000 item that is sold to us at a 36.5% discount has a cost of warranty of $196.85

{$1000 * (1.00-.365)} *0.31 = 196.85



If the manufacture can dump off those costs, there should be a corresponding dramatic price decrease.


In some instances we are have become "partners" with the manufacturer. My company will accept the manufacturer's offer to provide ALL customer telephone support, we purchase and stock all parts for warranty repairs, we actually perform the warranty repairs or contract for the cost of the repairs if so required. In other words we absorb those projected $196.85 costs. If we don't have to provide those services or support we make extra money, if we have to provide additional services or support it comes from out of our profits.


But it the case of excess inventory being sold as B market, the manufacturer is dumping most (if not all) of the costs off, AND the vendor is picking up little if any of the warranty and support costs.

So what does that mean to you?

Pretty simple.

Go back to the $1000 item.

We normally pay $635 for the item. The manufacturer's cost is far below that value. I would estimate the manufacturer's cost of the item to be about $350 PLUS the $196.85 for estimated warranty. At that estimated price the manufacturer is making approximately $88.15 profit on the $546.85 investment (350+196.85) or 16.1% ROI (return on investment).

Maintaining the same 16.1% ROI on the actual $350 cost of the item, the manufacturer is capable of selling the unit to the vendor for $406.35, a savings of $140.50, and NOT lose one penny of ROI profit.

Same ROI looks pretty good on the balance sheet report back to Japan.


Now, back to the real world for a moment. Normally we pay $635 for the item and add a 45% markup for a normal selling price of $920.75. The 45% markup is our (company's) standard markup for a brick and motar business and is pretty consistant with our industrial competition (audio equipment or other equipment may have a different markup).

Now, if our cost is only $406.35, and we apply the same 45% markup, the selling price is now $589.21


$1000 list

$920.75 normal selling price for our customers.

$589.21 estimated selling price, no warranty.

$589.21 is a 41.1% discount from the list price.

$589.21 is a 41.1% discount from the list price.

$589.21 is a 41.1% discount from the list price.

$589.21 is a 41.1% discount from the list price.

$589.21 is a 41.1% discount from the list price.


And the vendor selling the item is most likely an online or catalog company that cuts overhead costs and is still making as much money, based upon ROI, as the brick and motar?

Hmmmm

Something is wrong with this picture.

From my perspective, in the above price scenario, if you don't receive AT LEAST a 45% discount from the list price, the B Market seller is ripping you off on the price. Personally, I suspect a 50% discount would still be very fair to the B Market seller. At a 50% discount (based upon the above numbers) the B Market seller would be making $93.65 on the $406.35 cost, or 23% ROI .... 23% ROI without any big overhead? Yep seems very fair to me.



So what is a fair price for B Market?

Cheap.

Remember, you the consumer, is either paying for an extended warranty out of your pocket, or absorbing the risk of the warranty. You are also accepting the unit with little or no actual customer service support.

Most of the B Market stuff that I see being advertised is saving about 25 to 35% off the list price. Sorry, that is just not enough discount. As a note of comparision, Big Lots, who is notorious for buying B Market goods, is typically selling at a 40% to 65% discount for their electronic household goods and consumer products (telephones, microwaves, toasters etc). IMHO somebody in the audio industry (manufacturer or vendor) is making just way too much money selling B Market and the selling price needs to come down!

 

[HTnewbie]

sdgpt - WOW! My customer dissatisfaction rant turns into an education process - Excellent! Regarding the original thread, the box is taped up and awaiting UPS to pick it up today. Stay tuned.

Back to your points. I have just ordered a Belkin PF60 power conditioner from PC Nation PF60 . I have never done business with this retailer but they are an authorized dealer on Belkin's site. PCN says the list price on this item is $940 and they are selling it for $320. Froogle shows Dell and others selling it for $750 and others down below $300. Even though PCN was not the lowest I choose them for the authroized dealer status given the product type. If the surge suppressor does its job and is sacraficed in the process, I want to be sure I can turn it in for repair/replacement, most likely the latter. Since this type of product is likely not easily repairable, buying it from an unauthroized dealer, even with a 3rd party warranty, was not palatable.

Anyway, back to my point. How can Belkin use a $940 list price and yet have authorized dealers price if from $320 to 750? My question is whether $940 (MSPR?) is an artificially inflated list price and yet NOTHING sells at such a price? Is $750 more likely the "estimated street price" that seems to have come into vogue over the past few years? Is an artificially high MSRP used so that "everyone" can say they are selling at a discount? Is this a function of the type of company Belkin is (cables and other lower priced items)?

As an aside (like this whole discussion is not an aside from the original Abes thread), I chose the Belkin unit based on a solid review elsewhere, strong specs and good looks. I was heading toward a Monster unit and was considering Panamax too. (I have read dozens of threads about conditioners and I am not looking for anyone to second guess this decision). The Belkin was priced right and gave me a sense of relief for not contributing to Monster's inflated profits.

 

[HTnewbie]

WilliO's question

Willi: The photo may have been misleading. The factory original tape, under the tape you see along the top opening, was slit everywhere (even the bottom of the box). The intact tape you see along the top was from the repackaging job someone performed. I am lifting it in the photo to show that the factory installed staples are gone which was my first indication that something was amiss. The staples on the bottom side were there but had been pulled loose from the bottom flaps.

Aside from the manual and other bags having been opened, the dent, etc., it was the dog hair that made it clear this had been used previously.

 

[shokhead]

Buy from an unauthorized dealer and you can fill out all the cards you want but they are no good. Only warr will be whatever the place you buy it from offers,30,45 days,whatever. What is a USA warr card?

 

[JeffreyDJ]

True, unless you get the extended warranty. At least with Philips. Called and verified as well as received an email verifying as well from Philips, they cover from day one. Even with adding an extended warranty, I saved a little over $300 on my RXV-2500.

Basically, the unit was almost 30% off what the only local authorized dealer (Tweeter) would sell it ($340 difference total). After accounting for shipping vs. Sales tax AND adding the extended warranty, the difference was still right at $300 total.

That is an amazing difference in price. We could argue Authorized vs. Unauthorized all day, but the fact of the matter is Yamaha knows this goes on and so do the authorized dealers.

 

[shokhead]

Denon reg price for a 2805 is $899 plus tax. Got my BStock from Dakmart with a full factory warr from Denon for 671,total.

 

[Duffinator]

B: Direct Manufacturer support is being pulled

This is not usually the case if it's a true factory B stock. I've purchased many B stock pieces of electronics over the years including my Denon 3805. When I called Denon to have my remote replaced (like everyone else ) I gave the rep the serial number and there were no other questions asked. BTW, Dakmart extendes the Factory Warranty to one full year on Denon. My experience with electronics is they are either DOA or have a problem soon after put into service. Your mileage may vary.

But as I always state, I'd rather but a B stock item from an authorized dealer than an item from an unauthorized dealer with no warranty.

 

[sjdgpt]

I have never done business with this retailer but they are an authorized dealer on Belkin's site. PCN says the list price on this item is $940 and they are selling it for $320.

Dell and others selling it for $750 and others down below $300.


Anyway, back to my point. How can Belkin use a $940 list price and yet have authorized dealers price if from $320 to 750? My question is whether $940 (MSPR?) is an artificially inflated list price and yet NOTHING sells at such a price? Is $750 more likely the "estimated street price" that seems to have come into vogue over the past few years? Is an artificially high MSRP used so that "everyone" can say they are selling at a discount? Is this a function of the type of company Belkin is (cables and other lower priced items)?

Let's assume for a moment that $940 is a legit MSRP.

Remember my previous discussion .... camera body 1 versus 2, versus 3 etc.

The dealers may have to buy this particular model, in order to receive their best pricing structure. The dealer is free to dump the model at any time they like.

Secondly, when does the model year end for these products?


That is assuming the MSRP is proper and no other price or model games are being played.

What else could be happening? Remember camera bodies. Back in the 70's and 80's the Japanese manufacturer was making 5 different models. I suspect it was even more models. Today, I know it is more models.

Why?

So OfficeDepot can sell model #123.12A
So Staples can sell model #123.13A
So Sears can sell model #123.12B

etc etc.

Consumer product manufacturers are getting creative. Creative pricing allows each vendor to sell the product at "the best advertised price", to price match the competition "for identical models".

You get the idea.


Could that be happening in this issue?

Possible.


Back to the idea of a "street price".

Any consumer product, whether it is an automobile, toaster, what ever, there is typically either a net cost to the dealer, or a list price and a discount to the dealer.

The basic idea behind a "street price" is for manufacturers that use net pricing. Those manufacturers also know the typical markup for their dealers. Hence the "street price".... what the typical dealer is selling the item.

I would not say the MSRP or street prices are being inflated by the manufacturer (yes it does happen, but that is not the norm, especially with widely sold products), but it is the dog eat dog selling world that causes vendors to sell at a reduced price.


Since Dell is selling the model for about 750, I would suspect 751 or a slightly higher number would be a fair price for most vendors. Dell is generally pretty aggressive in pricing .... the wallyworld of direct sales.


So what is happening?

Model # confusion
Being dumped by some vendors
Model year about to close out, or has closed out.


By the way, I have a product line that the manufacturer's discount to my business is a "huge" 20%. We pay all inbound freight costs. The customer normally pays all freight from our business. Our normal markup is typically 45%. If you do the math, we must be selling the unit above MSRP. And you would be wrong. We sell it for MSRP, and have been known to even pick up the freight costs to the customer. Why? It is a price leader. Hopefully, we sell something that makes up for the lack of a profit margin. Never forget that price leaders do exist.

 

[sjdgpt]

Denon reg price for a 2805 is $899 plus tax. Got my BStock from Dakmart with a full factory warr from Denon for 671,total.

I purchased the 2805 for $725. "A" Stock with the full 2 year warranty. From a storefront, authorized dealer.

Like I have said, somebody is making way to much money selling "B" stock products.


How did I get the big discount? I am a nice guy? I spend a lot of money? I know the manager of the store? Somebody owed me a favor?

Yep

 

[shokhead]

Well thats nice. Good for you but most of us normal shoppers dont get those kinds of discounts. The going reg price in SoCal is 899. Lower in other states,dont know.

 

[sjdgpt]

Well thats nice. Good for you but most of us normal shoppers dont get those kinds of discounts. The going reg price in SoCal is 899. Lower in other states,dont know.

10% discounts are common enough for "valued customers", which means repeat customers are or guys buying multiple items.

Which gets back to my point... somebody is making way to much money selling "B" market units. The price swing between what is common on the street for an A Market and the B market should be much greater.

I would estimate the fair consumer price for a B market Denon 2805 to be about $450.

$671 for a B Market is just not going to hack it in my opinion. Not when just about any customer can buy an A Market unit for $800, and valued customers can get it for even less than $800.

 

[shokhead]

I dont know where you live but there isnt any of that valued customer stuff around here in SoCal. Well maybe if you spend a few grand at one time. Do you know what BStock is? I know what was wrong with mine. $450,in your dreams. But,i'd say if they sold them for $450 bucks they would still be making money so i'd say we both payed to much. $899 in SoCal is the going price and $849 when its on sale and the lowest i've seen an open box was $829 so there ya go. I'll buy BStock for 200 bucks off every time as long as it was fixed{if that was the problem} by Denon and is a full warr by Denon or whatever brand.

 

[sjdgpt]

Do you know what BStock is?

I am the Vice President of the family's industrial supply business. I am solely responsible for financial operations of the business including purchasing, inventory management, and profit management.

Yes, I have a pretty good idea about the definition of B Stock. Would you like some? I can sell you some.

$450,in your dreams.

No, not in my dreams. Reality.

Like I have said, somebody is making too much money selling B Stock.

Two years ago I made a model year closeout purchase. I purchased the entire remaining model year inventory of the manufacturer in a lumpsum. Nothing wrong with the products, just the normal model year/new design changes (in reality they just changed a microprocessor and the color of the paint used on the metal case). The normal discount to my business was 55% for that product line (45 cents on the dollar). My cost for the close out purchase? 89% discount (11 cents on the dollar). As soon as the model year change was complete, we offered the product to our customers for an 75% discount (25 cents on the dollar). Huge profit ROI for us (we did take the risk of selling the product) and a great price for our customers.



I think $450 would be possible for that Denon unit. It is only a 50% discount.


Starting just yesterday, I am negotiating to purchase the entire line of products from one our manufacturers. The entire line is being closed out. Not a model year close out, an actual dropping of the product division. What I will be purchasing will include all "A" stock inventory, all demo's and displays, all product returns, freight damage, all repaired units, all outstanding warranty claims. I have pretty good idea what I will be paying for the entire line.


I will say it again, somebody in the audio industry is making way too much money selling B Stock.

The price for A Stock at the typical storefront dealer is fair, it is the price being quoted by our online friends selling the B Stock that I am questioning.

there isnt any of that valued customer stuff around here in SoCal. Well maybe if you spend a few grand at one time.

I have lived in California.

I was a poor, just out of college, menial wage earner.

I was treated as a valued customer by most businesses. Being a valued customer is more than just the $ being spent.

I'll buy BStock for 200 bucks off every time

Why? Wouldnt you rather have it for $450 off?

 

[HTnewbie]

Original thread update #3

Back to the original Abes theme - UPS picked up the item yesterday. A call to them at 2:00 in the afternoon indicated that a new item had NOT been shipped as yet. Told ther cust svc person is out until Monday. Will call then and update.

 

[shokhead]

I am the Vice President of the family's industrial supply business. I am solely responsible for financial operations of the business including purchasing, inventory management, and profit management.

Yes, I have a pretty good idea about the definition of B Stock. Would you like some? I can sell you some.




No, not in my dreams. Reality.

Like I have said, somebody is making too much money selling B Stock.

Two years ago I made a model year closeout purchase. I purchased the entire remaining model year inventory of the manufacturer in a lumpsum. Nothing wrong with the products, just the normal model year/new design changes (in reality they just changed a microprocessor and the color of the paint used on the metal case). The normal discount to my business was 55% for that product line (45 cents on the dollar). My cost for the close out purchase? 89% discount (11 cents on the dollar). As soon as the model year change was complete, we offered the product to our customers for an 75% discount (25 cents on the dollar). Huge profit ROI for us (we did take the risk of selling the product) and a great price for our customers.



I think $450 would be possible for that Denon unit. It is only a 50% discount.


Starting just yesterday, I am negotiating to purchase the entire line of products from one our manufacturers. The entire line is being closed out. Not a model year close out, an actual dropping of the product division. What I will be purchasing will include all "A" stock inventory, all demo's and displays, all product returns, freight damage, all repaired units, all outstanding warranty claims. I have pretty good idea what I will be paying for the entire line.


I will say it again, somebody in the audio industry is making way too much money selling B Stock.

The price for A Stock at the typical storefront dealer is fair, it is the price being quoted by our online friends selling the B Stock that I am questioning.






I have lived in California.

I was a poor, just out of college, menial wage earner.

I was treated as a valued customer by most businesses. Being a valued customer is more than just the $ being spent.





Why? Wouldnt you rather have it for $450 off?

WOW! Your my new hero.