I hoped that Prithivi or SOM would chime in, but since they didnt here is my opinion on this and I hope they dont mind my doing this. For the record, I dont have any business relationships with either and nor do we sell the Oppo range.
Keep in mind that I speak as both a consumer and a retailer/distributor. The examples that Audiodelic and others have taken are too simplistic, this is not to mention that it perhaps isnt true, in all probability, what he said is probably true but the numbers dont add up when considering what distributors need to do. Dealers are not too involved in the process and are given the MRP set by the distributor and have a bit of leeway in terms of discounts and that is limited to what they can do and has to come from their own margins. So take the case of the Oppo 983 which sells for $400. A distributor needs to take care of service/replacements, marketing, advertizing, promos, etc etc so this cost has to be accounted for, its not free. Then there is shipping and then there are customs duties. Customs duty for one player can be vastly different when ordered at home (under-invoiced, gift, etc) but cant be done when importing from a business point of view. Customs duty is approx 42%, not 22% as stated. The simple reason is that the Indian Gov decided to "protect" the local audio-video manufactureres from competition and belive that a certain portion of the customs duty is a counter-tax (penalty) since we are importing this from outside. While this may be true for a $100 DVD player, we all know that a $400 Oppo player has no local equivalent that one can consider buying. Keep in mind also that the duty is charged over the price+shipping total, not just the price at which Oppo is selling the DVD player. So take all this cost and it becomes your landed cost. On top of this, there are transport charges within the country, inter-state commercial tax which is not insignificant, etc. Dont forget to add spares for service, someone to do the servicing, and transport up and down which is on the dealer/distributor for the duration of the warranty period. I would urge for you folks to calculate all this and see for yourself...and oh yes dont forget to add VAT of 12.5% into this and a dealer to distributor VAT of about 5%.
and finally there is the bitter truth
- I know I am not popular for saying this but I might as well come out and say it -
having been involved in the US market and Indian market now for a bit, the consumer mentality is quite different in both. The percentage of people that I have seen who are willing to pay a premium for better/personalized service is greater in number than the percentage of customers in India who pay extra for better service. Good service is expected to come at the same price as the cheapest vendor - this is the mentality for many, its simply does not work like that. I am not pointing fingers at any one member (you know who you are) but I have been guilty in the past as well (before I saw the business side of things), so this is for all of you to think about and ponder over, no point just blaming dealers/distributors and thinking that they are making a killing, this is BS for the bulk of them out there. You have people who come and take your time to audition equipment, make us bring it over to your place spend hours and in the end order through a friend/cousin who is coming from abroad because its a few thousand Rs cheaper? yes, you are free to do that, as someone in this forum said but obviously from a dealers point of view this cost eventually translates to cost passed on to some other customer, at the end of the day its all accounted for somewhere or the other. Here is another example that will serve as a wake up call -
1. Product A priced in the US for $2000
2. Product B priced in the US for $2500
Product A is available in India for the equivalent of $2200, product B is available in India for the equivalent of $2300, which one will sell better - product B and by a large margin. What most people dont want to see is for the price which is a better product, instead there is an inherent feeling that since Product B is available for cheaper, then the dealer is not cheating them
I have experienced this now enough times
where people have gone solely by this as opposed to any other reason. Looking at the % difference between US and Indian pricing should not be the motivating reason to buy one. One should buy it because they like it for that price compared to what else may be out there.
As consumers we start with a mindset that we are getting ripped off by dealers selling luxury goods, perhaps in some cases this is true, but not always.
Let me end it by requesting you all to support your local dealer, give them the chance to give you good service, if they dont/cant then its a different thing, but the market will only flourish if customers and dealers work together. If a consumer is only looking at the cheapest price then this stalemate will continue. Take the case of what happened in the US in the late 90's early 2000's - a lot of dealers were hit heavily due to people buying on the internet, since sometimes the vendor they are buying from dont even have stock or a physical warehouse their costs were very low. Many dealers suffered huge losses but there has been quite a bit of resurgence of dealer stores since then as people realized that there is no substitute for going into the store and talking to a person and dealing with a human (manufacturer policies also made this happen).
I hope you all take this in the right spirit
cheers
Odyssey
