Those Holo products are a lot cheaper than Gryphon, that is maybe a reason, no 50% dealer markups on prices. More potential customers at a lower price range.
Do Dealers Who Deeply Discount Gear Hurt the Industry?
- Thread starter caesar
- Start date
It’s really simple. In the EU and the UK, there is a two year manufacturers warranty by law. This has been the case for many years and anyone with half a brain knows it.
If you buy additional warranty cover you know it’s only needed for after two years. So, for example, lots of people buy AppleCare because it includes accidental damage which is not included in the statutory warranty.
The responsibility for the statutory warranty lies with the manufacturer, so you don’t have to worry if the dealer goes out of business. For imported products, the responsibility lies with the distributor.
We also in the UK have The Consumer Credit Act. This statute celebrates its 50th anniversary this year, although it was updated in 2006. This provides consumers with a range of protections, in particular in relation to credit finance agreements. It includes “fit for purpose”, “quality“ and “description“ clauses. So if a product doesn’t work, doesn’t do what it’s advertised to do or doesn’t look like the product in the picture, you can just send it back and get a full refund.
Recently, I bought a tonearm and the nice looking titanium arm lift had been replaced with a nasty plastic black thing. I returned it and said I wanted one that looked like that advertised, so they sent me one with the titanium lift. It turned out that the arm lift had been changed because it didn’t work properly so I sent it back again and got a full refund. That was all done under the protection of The Consumer Credit Act. The Consumer Credit Act is quite complicated, but if you are unhappy with a product there are many organisations who will give you free advice, the largest of which is actually funded by government.
These laws are very popular because they work. Back in the 1990s I remember that the U.K.’s largest electrical retailer (my cousin was the CFO) made more profit selling insurance and warranties than they did on selling the TVs and hi-fi systems themselves.
To some extent, but the Holo May DAC is more expensive than the PS Audio BHK pre-amp that has sat unsold for 6 months.
I'm not taking sides on this issue even though I have my own personal feelings.
His point was that these laws and warranties cost you money whether you want them or not - whether you use them or not. They are not "free" like so many people (I'm not saying you do) ignorantly think.
The companies pay ZERO percent of the added costs. Instead they simply add in those extra business costs in the price you pay upfront.
Just like when taxes are added on companies they simply raise their prices and pass that new cost on to the consumer.
Again - I am NOT talking sides. Just helping to illustrate his point.
There is another thread that asks us to break down how many of your components come from what country. I was surprised that about 60% of my components are from the USA (where I am). I realised that this is because the pricing of local products is much lower than say a "Euopean tax" of an import. For me, the value of USA products are much higher than imported products.
I rarely buy at retail, and the only major component I have bought at retail currently in my system is the Holo Audio May KTE which I purchased at Kitsune Audio the USA dealer. I bought it in the first 6 months of the release and any on the used market were only about $200 less than the $4,800 retail price. Today the May and the Serene from Holo are rarely discounted more than 20% on the used market, they hold their value. I think this is because they represent extreme value at their full retail price.
I fully get what you're saying. However, there is no extra cost having a law that requires a manufacturer or distributor to be truthful when they sell a product.
It's called Consumer Protection and it requires manufacturers and distributors to operate in a way that customers would expect. Here we don't consider it an additional cost, we consider it what all good manufacturers should be doing as a matter of course and it is therefore a normal cost of operations.
There is nothing stopping you importing a product from an unregulated market with no come-back or from some random person on the internet.
Moreover, under the Consumer Credit Act, for most items (some are excluded, such as bespoke made to order, etc.) you can return for any reason within 14 days.
It leads to a state of mind that products should not fail during their expected lifetime. I bought Gryphon, a Scandinavian business. Their attitude is generally that if something fails due to a fault, they are honour-bound to repair it irrespective of any warranty issues. I had this with Primare some years ago. I had an amplifier 8 years old, it failed, I called them, they collected, repaired and returned it and charged me nothing.
You can spout all the talking points you'd like. I worked for multi-nationals and am VERY familiar with the laws there, and saw first hand how we in business made you the consumer pay for it.
Again, I'm not here to argue whether the laws/regulations are right or wrong.
An understanding of basic business economics (and real life experience vs. just theoretical) proves thinking these laws have no financial cost and thinks business absorbs costs and don't pass them along to the consumer is not based in reality.
Remember - when laws give something to someone for free they first need to take it from someone/somewhere else.
You are welcome to like / dislike the law. Just be informed enough to know it's not free.
I know you like to argue over everything on this forum, create arguments where none exists, never let anything go and always need to get in the last word, but I am not arguing with you about the law. Just explaining nothing in life is free.
It's very simple.
Last edited:
In Europe we have sales tax that varies by country, but is mostly between 17% and 27%. In the UK it is 20%. If you're selling to consumers who cannot claim back VAT/sales tax, you have to state the price including VAT. If you buy from a UK business and import into the USA, they will exclude the VAT and you will pay whatever import duties and sales tax that apply in the USA.
I think USA prices are stated locally excluding sales tax. Is that correct? Here all consumer products should be priced inclusive of 20% VAT. I have seen some people advertise consumer products excluding VAT to make them look cheaper. Network Acoustics do that, they really shouldn't. If you export a lot of consumer products, like Magna Hifi who are the European distributor for Holo Audio, the prices should still be stated including VAT/sales tax.
Magna Hifi do it correctly. They state the price including VAT and in brackets the price excluding VAT for export customers. Cross-border sellers usually give the option of exporting (a) exclusive of VAT or (b) VAT and duty paid. The first way you have to pay the VAT to get the goods through Customs, the second way the item gets through Customs automatically and you get it quicker.
Probably the best value UK product is Cambridge Audio. Designed in the UK, globally shipped from China to international distributors, and under common ownership of the UK's largest hifi retailer. They've been manufacturing in China for 40 years and have got it state of the art. Brilliant distribution process.
I've advised thousands of businesses over the last 40 years and have been on the board of two listed companies. Nothing is for free in business.
I fully appreciate that we are far more regulated in the UK and EU than you are in the USA, but it is part of our consumer culture. It likely leads to different business practises and different cost structures. Some of us remember the days before these regulations when you took a real risk buying without a warranty. The warranty business was a real scam, often adding up to 25% on to the retail price, most of which was pure profit.
The main factor in recent years has been the general increase in manufacturing quality and product reliability, in large part thanks to the internet.
Take for example Topping. Some is very good value. Shipped from China. Good luck if you have a problem. Over time people have realised they are very well made and some dealers are starting to carry Topping products. Their No. 1 concern is warranty costs and returns. Sometimes the manufacturer will indemnify the dealers for their warranty costs. This happens in the automobile market.
It's just different, what people are used to. Some people in the UK want the cheaper USA prices and there are businesses that do the 120v to 240v conversion (if needed).
The other massive difference is of course that that the USA is big and the UK/EU is small. So here dealers likely have a greater proportion of customers visit their stores. More relationship building, more opportunity to offer added value service. Less price dependency. Who knows.
Republicoftexas69
Well-Known Member
It actually has a cost and that is the cost of underwriting the additional warranty. There is always a cost to the consumer. You are naïve to think otherwise.
Similar threads
Members online
- MarkusBarkus
- Danielaruso
- Kingsrule
- pcosta
- TonyW
- hopkins
- Beltane_sun
- Zarir
- fizzletop
- patleguen77170
- audioguy3107
- dminches
- Bonesy Jonesy
- Davidny
- roundhead
- Thundersnow
- tapepath
- kadiddle
- Sound Dragon
- engadin
- octaviars
- Ackcheng
- olivier
- ationg
- Salectric
- GSOphile
- Foxbat
- jazzdude99
- mtemur
- andromedaaudio
- GHasley
- hols
- matthias
- zerostargeneral
- nonesup
- MusicFellow
- golfball1987
- rad
- Georgios
- audiobomber
- an.vamv
- Rensselaer
- MOTU
- John T
- IvPa77
- vjayh
- ecwl
- rafale
- Supermario
- Joe Whip
 | Steve Williams Site Founder | Site Owner | Administrator |  | Ron Resnick Site Co-Owner | Administrator |  | Julian (The Fixer) Website Build | Marketing Managersing |