How to kill Naim sales in a perfectly healthy country. A lesson in smart economics.

Huge posted:

Halloween Man posted:

...

Are UK dealers, or indeed any EU dealer able to ship Naim products direct to Italy? It's supposed to be a free market here in the EU, at least for now anyway.

Cbr600 posted:

...

my understanding is that Naim dealers are not allowed to sell outside their region/area.

...

It may be part of the contract Naim has with dealers and international distributors, however this can be circumvented.

There are import/export companies who will, for a commission, purchase anything in any country and transport it to another country provided that is legal (at all steps - purchase, transportation and supply in the destination country).  And within the EU there isn't even any question of tax or import duty nor one of mains voltage.

This works to circumvent Naim's contract with it's dealers and international distributors because the purchase in made in the country of origin (the UK in this case) not in the destination country, followed by a private import.

Any attempt to prevent this within the EU would be illegal due to the combination of the EU treaties concerning free movement of goods and labour, tax harmony (paying VAT in the place of origin) and the EU Customs Union (of which UK is a member).  The only exception would be where a destination country has a specific internal excise duty on a class of product (e.g. alcohol and tobacco in the UK).

True Huge, but wouldn't it be better if Naim removed these artificial barriers and let market forces operate?

Cbr600 posted:

Huge posted:

Halloween Man posted:

...

Are UK dealers, or indeed any EU dealer able to ship Naim products direct to Italy? It's supposed to be a free market here in the EU, at least for now anyway.

Cbr600 posted:

...

my understanding is that Naim dealers are not allowed to sell outside their region/area.

...

It may be part of the contract Naim has with dealers and international distributors, however this can be circumvented.

True Huge, but wouldn't it be better if Naim removed these artificial barriers and let market forces operate?

Naim would probably argue that in setting prices and restricting sales to a particular market place they are protecting dealers...

Eloise posted:

Cbr600 posted:

Huge posted:

Halloween Man posted:

...

Are UK dealers, or indeed any EU dealer able to ship Naim products direct to Italy? It's supposed to be a free market here in the EU, at least for now anyway.

Cbr600 posted:

...

my understanding is that Naim dealers are not allowed to sell outside their region/area.

...

It may be part of the contract Naim has with dealers and international distributors, however this can be circumvented.

True Huge, but wouldn't it be better if Naim removed these artificial barriers and let market forces operate?

Naim would probably argue that in setting prices and restricting sales to a particular market place they are protecting dealers...

When it comes to wanting dealers to provide Naim's expected level of support, including home demos and installation, there is sense in that - and the scenario mentioned in an earlier post of people going to one dealer for demos then buying from another could ultimately kill that. It is a difficult balance - but that of course is quite a different matter from apparent extreme profiteering in another country, especially if that is not backed up with exemplary service, sucking up to every whim of all would-be and actual purchasers.

the big problem comes when a dealer's attitude creates a wrong impression of a brand.

Cbr600 posted:

True Huge, but wouldn't it be better if Naim removed these artificial barriers and let market forces operate?

Hi CBR,

while this sounds like a good idea, it would require a level playing field for all competitors to truly work. And the playing fields are decidedly unequal. Even within the EU you have different  VAT levels and perhaps even additional taxes in some countries. This puts the dealers in countries with a relatively high tax level at a huge disadvantage.

Another aspect are the cost of in-store demos, loaning gear for home demos and other services provided only by the local dealership. Or at least in those countries with a reasonable amount of dealers and service.

(IB already made pretty much the same points while I was typing my response)

I lived in the Bailiwick of Jersey for a couple of years, returning to the UK in 2016. Generally an expensive place to Live, but the absence of VAT makes quite a difference when it came to buying quality hi-fi. (Especially as my dealer did not charge 5% GST either). 

Eloise posted:

Huge posted:

Halloween Man posted:

...

Are UK dealers, or indeed any EU dealer able to ship Naim products direct to Italy? It's supposed to be a free market here in the EU, at least for now anyway.

True Huge, but wouldn't it be better if Naim removed these artificial barriers and let market forces operate?

Naim would probably argue that in setting prices and restricting sales to a particular market place they are protecting dealers...

Good point Eloise, I purchased a 2015 250.2 from a Dealer in the States, 4K USD, warranty and the works, this guy wanted $98 for a set of three Naim Cups and Balls! 

Tom Tom. Couldn't ship to US, against Naim Policy!

My Cousin shipped me a set of Six, cost me $137 USD for 18 (Naim Cups & Balls)!

1 set $98 vs 6 sets $137

Don't even mention the Glass, working on it now!

Allante93!

@ Kuma, I agree, these days, SQ is not Trump!

Since Trump is on the Brain, Repeat he is only a diversionary tactic! Our Health Care Bill, is a prime example! LOL.....

Those clowns have a 52-48 Advantage in the Senate, and can't pass a single Bill!  

BTW, the Immigration executive order, that the 5-4 GOP favored Supreme Court withheld, has been noted law, over 5 years!

Hence, not really, a Victory for The Donald!

With that being said, the UK & US is still a desired Region, to Market expensive products! 

Repeat Market Products, not Manufacture, the cost of Labor is still to High!

 Tory vs Labour

Republican vs Democrat

All nonsense, Rich vs Poor!

And we, The Naimites, are a dying Breed!

2K pounds for a piece of wire!

Back on topic, those Americans can afford it, 7.7K for the SCDR!

Support the Sales in the UK, 4K!!!!

Allante93!

Same issue I've found with Linn. My Klimax system is $94,000 in US but I can import it direct from UK and save $20,000 and that includes: all import tax, local consumption tax (sales tax), business class airfare to London, and a week long stay at a 4.5 star hotel in the city. The only thing I lose is the warranty.

Kevin Richardson posted:

Same issue I've found with Linn. My Klimax system is $94,000 in US but I can import it direct from UK and save $20,000 and that includes: all import tax, local consumption tax (sales tax), business class airfare to London, and a week long stay at a 4.5 star hotel in the city. The only thing I lose is the warranty.

Then why not simply buy exdem/used, surely the warranty on new items is a major factor.

Eloise posted:

Cbr600 posted:

Huge posted:

Halloween Man posted:

...

Are UK dealers, or indeed any EU dealer able to ship Naim products direct to Italy? It's supposed to be a free market here in the EU, at least for now anyway.

Cbr600 posted:

...

my understanding is that Naim dealers are not allowed to sell outside their region/area.

...

It may be part of the contract Naim has with dealers and international distributors, however this can be circumvented.

True Huge, but wouldn't it be better if Naim removed these artificial barriers and let market forces operate?

Naim would probably argue that in setting prices and restricting sales to a particular market place they are protecting dealers...

I very much doubt Naim would argue that as that would be highly illegal and could be very costly in court/fines especially in the U.K. 

Max, I'm sure most Naimees in the UK feel your pain. None of us like to feel we are potentially being exploited financially when purchasing something which touches our passions (or anything at all for that matter). Capitalism and free market mechanisms often balance things up, albeit it can take time (years). But, as you identify, there are some curious factors in play around perceived value e. g.

There was a TV programme many years back about an apple juice producer in the UK which was selling bottles in to UK supermarkets at ~£2 per bottle (IIRC) and struggling financially. They re-branded the product, changed the bottle/labelling and pricing was changed to ~£4 per bottle. Demand increased markedly - same product and production cost within a few pence!

One cannot escape the base law of economics that you vote with your (financial) feet. And that's how vendors hear us, and how messages flow upwards from markets to manufacturers.

It is informing that when I sold 3 Naim items on auction sites, these have been purchased by EU/overseas persons - and, I understand, the purchasers of one item, which was collected, made trips to the UK (to see my then local dealer). I'm sure manufacturers & distributors are alive to some X-border private purchasing, especially where transit can be effected with relative ease. Obviously, merchanting/dealer agreements have to preclude overt X-border shipping etc, to avoid parallel trading breaking out, as has happened in the fashion and drugs industries (to name but 2).

Here in good old Australia, things are sort of in the middle pricewise. For example a NAP 250DR sells here for 8000 AUD, which is, at todays exchange rate, 4760 GBP. Using the evil googleplex, I see the UK price for a NAP250DR is 3680 GBP, (6237 AUD). So the difference is 28%. This sort of holds across the range, with prices obviously being bumped up and down a touch to give nice round figures. Most of our Australian prices end with two zeros, not the stupid 99.

I have been involved in importing hifi into Australia, and I would say that's pretty much how it goes. Distribution and service costs are more proportionally here because of both logistics and a smaller client base. There are only 24.5 million Aussies and about 4.5 million Kiwis, (the importer NA Distributors services both countries).

NA are actually pretty good here, some other importers of UK product have a higher premium, not many have a lower one. Back in the good old days it was much worse, the internet has definitely knocked the prices more into alignment. So I am actually ok with this.

It is one of those things, for a NAP 250DR, a difference of 1863 AUD/1090 GBP for the NAP 250DR might gets some upset. For me however the answer is it is fine, I see the value in local support, (and our distributor Chris Murphy is definitely a true believer and fantastic asset).

I do envy the size of the market in the UK for second hand equipment though. Lot's to choose and decent prices, with some dealers set up for export sales. But that's a different argument.

Simon-in-Suffolk posted:

Eloise posted:

Cbr600 posted:

Huge posted:

Halloween Man posted:

...

Are UK dealers, or indeed any EU dealer able to ship Naim products direct to Italy? It's supposed to be a free market here in the EU, at least for now anyway.

Cbr600 posted:

...

my understanding is that Naim dealers are not allowed to sell outside their region/area.

...

It may be part of the contract Naim has with dealers and international distributors, however this can be circumvented.

True Huge, but wouldn't it be better if Naim removed these artificial barriers and let market forces operate?

Naim would probably argue that in setting prices and restricting sales to a particular market place they are protecting dealers...

I very much doubt Naim would argue that as that would be highly illegal and could be very costly in court/fines especially in the U.K. 

Restrictions on the area where you can sell into are of course pretty much illegal, but.... requiring that a dealer must always deliver and install generally isn't. It's actually a sign of a decent dealer that they do deliver and install, especially with specialist product. It's also much more costly for the dealer so a higher margin is necessary.

However it also leads to de-facto territory restriction. Hmmm, what is the aim of an arrangement like this? Restraint of trade/price gouging or a genuine desire to make sure customers get the best out of their expensive product? You can argue either way. As an ex dealer, most of the better products seemed to emerge from companies that had their heart on their sleeve, so I go with the benign explanation. Also, really, look at all the great, but small brands that go broke. Even the successful ones don't make squillions.

And as a manufacturer, distributor or dealer you do no favours to your customers by going out of business. I know this sounds Pollyanna-ish but it's true.

Yes to a point a manufacturer can choose who distributes or retails its  products or services... and so a retailer / distributor that was not seen appropriate by a manufacturer; such as not prividing the appropriate levels of customer care as deemed appropriate by the manufacturer might cease to be a distributor or retailer for that manufacturer - officially.. and this where the grey market can come in...... but that is all different to what we are talking about which is a private transaction between consumer and retailer where both agree the specific terms of that transaction whether it be price, installation, support, trade in, dealer warranty etc....

To your point on home installation, a manufacturer could expext that service is provided at no additional charge to the consumer in reasonable circumstances, unless the customer specifically declined it... again it could be questionably lawful whether buying a product mandated access to your property.... it would make for some interesting terms and conditions.... 

steve95775 posted:

Here in good old Australia, things are sort of in the middle pricewise. For example a NAP 250DR sells here for 8000 AUD, which is, at todays exchange rate, 4760 GBP. Using the evil googleplex, I see the UK price for a NAP250DR is 3680 GBP, (6237 AUD). So the difference is 28%. This sort of holds across the range, with prices obviously being bumped up and down a touch to give nice round figures. Most of our Australian prices end with two zeros, not the stupid 99.

I have been involved in importing hifi into Australia, and I would say that's pretty much how it goes. Distribution and service costs are more proportionally here because of both logistics and a smaller client base. There are only 24.5 million Aussies and about 4.5 million Kiwis, (the importer NA Distributors services both countries).

NA are actually pretty good here, some other importers of UK product have a higher premium, not many have a lower one. Back in the good old days it was much worse, the internet has definitely knocked the prices more into alignment. So I am actually ok with this.

It is one of those things, for a NAP 250DR, a difference of 1863 AUD/1090 GBP for the NAP 250DR might gets some upset. For me however the answer is it is fine, I see the value in local support, (and our distributor Chris Murphy is definitely a true believer and fantastic asset).

I do envy the size of the market in the UK for second hand equipment though. Lot's to choose and decent prices, with some dealers set up for export sales. But that's a different argument.

 

I agree with the Point Chris Murphy has been a fine asset to Naim down under  But I feel they are now so far elitist and with satisfactory market share/ burgeoning Clientele

--his company has forgotten the little guys possibly.

Case in point--I own 4 Naim items-- two did not have suitable Instruction manuals-I telephoned NA Distributors spoke to gentleman and explained the fact I would like yo purchase two

manuals for the items I have. He was courteous and said he would see if Chris could obtain for me.

That was 14th May--- June 30th Nix, Nada, not a word to state if any progress or if said manuals are being sent /etc--yes I realise they can be downloaded but it is nice to have the proper 

versions to compliment the Units.

Guys I'll have to go direct to NAIM UK--can anyone here suggest whom I contact for these at the factory?

Grateful for any help

Thank you,

D41

GraemeH posted:

Hi Max - Your thread complements the book I am reading just now.

The Dark Heart of Italy
by Tobias Jones
288pp, Faber, £16.99 (UK Price!)

Recommended.

G

I'll read it, although I cannot say that the title is making me drool... But thanks for the hint.

Max

Drop an email to Naim customer care, I suspect you will have a response promptly

Steve - I believe, in its simplest form, the need and & rationale for a (territory) distributor is driven by the need to have local infrastructure (feet on ground). facilitate local marketing & promotion, and ensure adherence to local trading rules and customs (plus Customs needs) - and this all costs. Going direct to chosen dealers, unless a sizeable network, may work but isn't scalable for a brand. Plus, if you were to sell offshore direct from the UK, which consumer protection would apply and how do you account for tax treatments? The EU makes this simpler but.. 

This is why brand owners and manu's fight against the possibility of parallel trading arising, one factor being that the vendors under such arrangements effectively benefit from a distributors/local brand marketing and promotion without contributing to it. Legally, the case is far more complex - and there is quite a lot of legal tolerance, where there are clear consumer benefits (drugs).

Obvious pricing issue is that everybody wants coin in this game. I think Max's point (as the OP), is that there appear to be too many fingers in the pie, and some unnecessary ones? (may be even to the extent of simple back to back invoicing?)

In my previous life we sold world wide & our dealer network could (could) sell into any country.  We could not impose or control the dealer's selling price & we relied on competition & free market forces.  However if/when the dealer completed the customer registration which included a list of procedures such as installation & pre delivery inspection, warranty & customer registration, factory standard service contract, then the dealer would receive the various sales credits depending on what was done & at levels that reflected the dealers compliance standard.   If they sold outside their country (or assigned region) the credit would be very limited & depending on factory pre sales approval might be zero.    It was remarkably easy to do in the modern communications age.   One of the end results of this was a unit price that was remarkably similar at +/- 5% around the countries we sold to in Euro's.   In the USD regions it was even closer 

Ardbeg10y posted:

Come on Max! You need to realize that you live in a beautiful country having brilliant wines, bread, salt, spices, vegatables, and olive oil from 2000 year old trees.

When I buy them in my swampy lowlands I pay double the price - and your country exports the lower quality.

When I want to drink my favorite Soave, I pay 6 times more than in Italy.

Both Ferrari or a Fiat Panda is more expensive in Amsterdam than in Milano.

Any church in Italy has more art than a full non-Italian museum.

Apart from the doubtful satisfaction of being identified, as an Italian citizen, for the 1000th time with food and Ferraris, your post doesn't contradict mine. Why don't you go to a Ferrari dealer in Amsterdam and ask him why the car is more expensive there than here (I don't know Ferrari's prices, BTW, I am not interested in supercars – for that, you should ask Roberto)? If he has an explanation, I'll be curious to know it. And let's not forget that when we compare costs of transport, import taxes (we have 22% IVA here) and the sort, then we consider the difference in street prices, we have to remember that the importer doesn't buy from Naim at street prices, but at a much lower one.

Anyway, I have always accepted all the points that have been made here, even the unrelated ones: that Naim sells by itself (not true: I've seen people coming to my dealer asking for a given Naim box and being tentatively sold something else, from or not the Naim catalogue: dealers sell what they want to sell, what usually allows the highest margins. An example: each time I have asked for a demo of a Naim product, I had to ask for NAC A5 expressly, and got it with some effort after they had rummaged in drawers for minutes trying to discourage me, because it was out of reach even for the pet shop boys: the owner has placed Nordost on every system and forbids the guys to use otherwise); that it's a privilege to own it, etc. I can understand and accept Naim's policy to rise the prices annually to guarantee a good value to the second hand market; I understand everything. But I can't accept to see that, as I wrote, when the SU was released it costed exactly like the SN, and now it is 30% more. This is importer's politics, and I should be in their head to understand it: well, when my dealer moved his store to the new site, I helped him install all the Naim systems for him (he couldn't get a*sed, and BTW is not able to do it), so I spent a day on the other side of an audio store, seeing and hearing the concepts, the motivations, the reasons for each and minimal placement of any box: and have decided that I will never have a similar experience again. Audio stores, in general, now repel to me. I know what's behind every word they say, and feel that each minute spent in an audio store is a minute wasted.

BTW, Sloop John B: if you're reading this; months ago I posted a long reflection on why, and how, I decided what pieces I'd have and the exacts reasons for each choice. It apparently was such a rational argument that even Nigel gave his approval. I do not even dream of having to justify what I do, but I have stopped buying, swapping, changing, up-, down- or side grading; only, I did it after having bought, paid, listened to, owned, judged, lost money, built experience. Not after having drooled on the forum pages and followed some maître à pensée's indications or the classic need of some forum members to spend your money.

Friendly

M

Not being born with a silver spoon, I'm forced to partake in the 2nd hand Market:

Cdx2>Canada

282>Canada

Fraimlite>The Netherlands 

I to, envy you Gents in the UK, with your lower prices & immense 2nd hand market for Naim Gear!

But I do get it, on more than one occasion, I was advise to check my local dealer, even when dealing with Naim's Repair Facility.

Of course, my reply, they don't answer the phone, or return emails!.....

And of course, a pristine bottle of of Soave, will be less expensive in Verona, than the North pole!

In my quest for Naim Cups & Balls,  I was delighted when Tom Tom, retuned my email.

Maybe not a Full PHAT Fraim, but Fraimlite accompanied with Naim accessories, can't be all bad.

Especially at 1.34 & 7.07, that's similar to $97 GBP 9 Cups & Balls, a set of 3.

Error on my part, I stated set of 6 earlier!

In any event, that translated to $137 USD, for a set of 3, not 6.

However, it was to my dismay, when TomTom informed me, it was against Naim Policy to Ship to the USA!

Naim's Repair Facility was nice enough to oblige me with Set of three, but the Dealer must make a living, that's his Livelihood!

And in retrospect, it makes sense, if you live in the US and desire a Naim support rack:

A. Fraim

B. FraimLite

Simple get the Fraimlite and purchase some Naim Glass, Cups and Balls!

Not Quite that simple, what the heck, I might as well dish out the bucks for the PHAT Fraim!

I Guess it's really Marketing 201, and when it's all said and done, that's what Marketing Engineers Do!

Allante93!

PS. Internationally not within the EU:

"EU, European Union has delivered more than 60 years of peace, stability, and prosperity in Europe, helped raise our citizens’ living standards, launched a single European currency (the euro), and is {progressively building a single Europe-wide free market for goods}, services, people, and capital."

Allante93 posted:

PS. Internationally not within the EU:

"EU, European Union has delivered more than 60 years of peace, stability, and prosperity in Europe, helped raise our citizens’ living standards, launched a single European currency (the euro), and is {progressively building a single Europe-wide free market for goods}, services, people, and capital."

Beautiful. I saw it happening. Now: Constitution of the Italian Republic, 1948, art.11:

Italy rejects war as an instrument of offense to the liberty of other peoples and as a means of resolving international disputes;

And yet, I remember 1992 and the war in Kosovo, when Italy, with a Government led by Massimo D'Alema (PCI) allowed the use of Italian airspace to Nato forces, and authorized the use of a number of Italian fighter-bombers to bomb Kosovo.

So, how beautiful general ideas sound when they're just words.

Not to get off topic, but is the Frexit Dead!

""Frexit" is a common name for a hypothetical French withdrawal from the European Union. A poll by the Pew Research Center in June ...

well, given this is a objective discussion, and exchange of ideas, to me a dealers job and purpose is to maximise his profit, after all, he is a businessman first and foremost, and I cannot blame any dealer trying to maximise his profit.

HI-FI dealers are not grocery stories, they can usually only sell HI-fi once to a family, and that's it. That customer is gone forever, usually. HI-fi dealers are not charities, they need to make profits to feed their families.

It is up to the customer to know what he wants. If any dealer forces Nordost cabling I have this to say.

When I heard a Demo of Chord Dave with 172/250.2/Dynaudio C2 speakers, it was with Nordost cables, and it was a sensational sounding system, with 3 dimensional soundstage. 

NACA 5 is fine, but it is cheap, and newer and better cables are now doing a good job with Naim electronics.

Just like the Vertere DFI is a very good replacement for the Naim Lavender cable, technology moves on.

I remember badlands saying the entry level Nordost can do Superlumina level effects (compared to NACA5), but at fraction of cost.

So Why not?

analogmusic posted:

well, given this is a objective discussion, and exchange of ideas, to me a dealers job and purpose is to maximise his profit, after all, he is a businessman first and foremost, and......

I remember badlands saying the entry level Nordost can do Superlumina level effects, but at fraction of cost.