Where do the grey market retailers get the gear?

Like the title says. If they are not "authorized dealers" where in the world are they getting all the product??????????

Look at it this way. If the manufacturers really wanted to stop the grey market all they have to do is:

1 Serial number everything
2 Buy items from an online "grey market" dealer
3 Trace back serial number, loudly and publicly close dealers account

If I Owned a dive shop I would be really ticked this didnt happen very regularly.

Dont get me wrong. I love to buy online. Price fixing is what gets under my skin. Its un-American. I smell something "FISHY"

No pun intended.

Places like LP get their alot of their stuff overseas - it's not illegal right now, although lots of people want to change the way they operate.

I really don't have much sympathy for the dive industry (the LDS owners I know often feel bullied by them), so it's not a cause I really care that much about, but, there are a few guys on SB really involved with this whole issue.

The $64 question.

I'm told they buy from over-seas distributors. However some manufacturers don't have any.

Sometimes they pay starving dealers to buy for them.

Sometimes they buy out overstocked or closing shops.

I even think that some of the manufacturers are snaky enough to sell out the back door.

Manufacturers track down unauthorized sales in pretty much the way you suggest. It's not that hard, provided you maintain a database showing which particular item opriginally went to which dealer.

The problem is the cost of doing this kind of checking. Manufacturers are generally not set up with a permanent grey-market police department, because it is hard to justify on the bottom line. Such efforts cost a lot of time and money, and are consequently seen as money-losing. They are even harder to justify than advertising. Even if the manufacturer succeeds in shutting down the grey-market distribution, this does not translate directly into more profit for the manufacturer. The short term effect of policing grey-market distribution is often to cut sales overall. So manufacturers only really get motivated to do something about grey market sales when big authorized dealers threaten them with dropping their line unles they shut down the grey-marketeers.

If you manufactured main stream scuba gear and LP did not carry it, you would be missing one of the largest retail outlets available. That might not be good for your bottom line. Now how much effort do you want to put into turning that off?

I can see why the manufacturers dont do anything. I wonder if they dont encourage or like someone said actually sell the stuff to them.

I dont buy the "overseas" excuse. Is "overseas" some land of magical make believe? I mean you know any large successful manufacturer has an inventory and sales tracking system. If by some fluke they didnt we all know how easy and low cost it would be to implement. They are the ones making the product. Not some magic elf overseas. If they sell a BC to a dealer overseas who then wholesales it to LiesurePro or whoever, they should close that guys account. If some idiot starving dealer sells them wholesale he would be really starving when his accounts are closed and he has no product at all to sell.

Like I said something doesnt smell right.

From what Ive seen online dealers have NO stocking problem. This stuff is readily available.

Im not upset that an entreprenuer is in business. I take my hat off to him. What upsets me is a price fixing scheme. And the fact that I want the online guys to be able to sell a legit product.

I don't how much they really get from over there, although I got a D-3 BT from LP and it had no english instructions.

Have any of you guys every been to LP, my buddy stopped a few weeks ago, one word: SHADY

SparkySFD once bubbled...
[B If they sell a BC to a dealer overseas who then wholesales it to LiesurePro or whoever, they should close that guys account. [/B]

Click to expand...

There apparently are some countries where, if they did that, they would be violating the laws that protect consumers and merchants. You probably thought you lived in one of those countries!

I realize other countries have different laws. But you cant tell me a company cant refuse to do business with a foriegn firm. If I own ABC scuba widget company and am upset with the way a Greek or Russian company sells my product. You cant tell me I have to continue my relationship with them.

Not speaking to LP policies here, but for consumer products in general.

My experience comes from over 20 years in the consumer electronics industry - working for a very large (nearly $1 bil) 83 store chain, working at a very large manufacturer, and for the last 13 years, working in several non-retail sales channels.

We get the stuff from other dealers, and from distributors.

As a dealer, I sold my stuff to other dealers all the time. If I have 10 $900 camcorders on the shelf that cost me $675 each, and its the 29th of the month - the crew was dialing for dollars. These things landed in other dealers.

Haven't you ever been to Costco the first 10 days of the month....you'll see pallets of consumer electronics (name brand stuff) at un-real prices. Then its gone. They buy this stuff from other dealers (usually...sometimes from desperate distributors or manufacturers....)

Is it easy to clamp trans-shipping - sure (in theory)...just build a big a$$ database and capture serial numbers on the way out the door to retailers. But it doesn't work that way. What is you sell through distributors (like MANY in the scuba industry....) it goes from manufacturer to distributor, then who knows where.

The manufacturers know this. Why is it in their best interests to stop the practice? They'll pay you all the lip-service you want, and the industry wants to swallow. But when a manufacturer's sales rep has a number to make, he's gonna make his number, and that includes getting product into the hands of guys who'll move it.

I hired on at a company once that looked legit, but ended up being one of the nations largest trans-shippers of a premium CE line... There were guys stripping serial numbers off of big screens and camcorders with blow dryers. We sold millions of dollars (all cash) every year of the stuff. Guys would come in bobtail trucks and take the stuff to Mexico, or downtown. Where do you think all those downtown LA and NY electronics shops get their name-brand stuff? from other dealers.

I'm confident Scuba is the same way. Salespeople have a number to make, and they will get the products into the hands of the people that can move it. LP moves HUGE quantities of stuff, so they will always, always be able to get it.

The manufacturers know this, and will continue to supply legitimate (read: "authorized") dealers with more stuff than they can possibly sell (we didn't even have a storefront, and we had a $500,000 credit line with 6 prestigious manufacturers) and this stuff will continue to flow into the hands of non-authorized dealers.

Is it shameless? yes.

Is it illegal? not really.

Who gets reamed? I'm open to debate that.

CONSUMER? - You could say the consumer gets reamed (possibility of rejected warranty, subject to off-shore non UL goods, incomplete packaging, foreign manuals, etc.) but this stuff generally represents a significant savings in cash to the consumer.

MANUFACTURER?- Their branding suffers when you buy a Sony (or Scubapro, or whatever) and get home and the manual is in Spanish, or French, or Swahili. That isn't the out-of-box experience the manufacturer hoped to impart to you, and its damaging to their brand

LEGIT RETAILERS? - OK. They can't compete on price - but there are often things other than price that drive consumer decision. Some consumers what the peace of mind buying from a big retailer (that comes with a price) Some of us shop “downtown” and some of us on eBay – we’ve decided the risk / savings is worth it.

We can go all Genesis and debate pricing practices vs. branding profiles, but that's not the issue. Its about moving product - it always is.

This isn’t going to stop anytime soon. When margins were healthy in CE (70’s / early 80’s) this wasn’t such a problem. But the voracious consumer demand for a $49 DVD player and $99 3 meg digital camera is the stuff that drives this. This is why the CE world belongs to the billion dollar retailers. Scuba will be spared of this for awhile, but as its been debated here a thousand times, its getting tougher for the small guys to carry on. You're being ignorant if you believe the manufacturers are not partially feeding this machine. When you can get the stuff anywhere, and download english manuals off the manufacturer's site...I mean. c'mon.

K