Archived posting to the Leica Users Group, 2003/02/10
[Author Prev] [Author Next] [Thread Prev] [Thread Next] [Author Index] [Topic Index] [Home] [Search]Hi Austin, I do not understand why but the following is what I understand to be true. Leica has a worldwide distribution network for its product. Each distributor gets the exclusive right to sell Leica product in a set area and in exchange they provide a series of services. These services include repair and parts depots, distribution, promotion, etc. These services are expensive to provide and have to be paid for out of the profits of Leica sales in that area. Warrantee work is billed back to Leica AG at a rate lower than retail trade repair rates. Warrantee work is closely monitored both internally and by Leica AG itself as warrantee fraud is not unknown. Every repair is linked to a specific items by serial number and all replaced parts are examined by Leica AG to ensure they were defective. A certain percentage of warrantee claims will be rejected and there is usually a warrantee budget set by Leica AG. Exceed the budget and you will closely scrutinized by Leica AG*. All this leads to certain repairs and adjustments not being claimed as the paperwork costs are higher than the recoverable amount. If you are under warrantee budget then you have lee way when the Friday or Monday camera from h*** comes in. All of the above is to explain the reasons why warrantee work is not profitable for the distributor. If they are lucky, and have skilled administrators and staff, then they should be able to break even. I hope I have made the reasoning clear. Also a certain amount of warrantee work will come from other distributor's customers. Usually these will be minor repairs as major ones will take longer than the customer has before they return to their original country. So all the distributors take care of each other to a certain extent. Everything is hunky dory so far but now comes the spanner in the works. Leica AG will sell outside its own distribution network if you purchase a large enough order. So called "grey" gear has serial numbers that are not in the authorized distribution system. The dealer cannot claim ANY recompense for serial numbers not in the system period. Remember the system keeps track of serial numbers to control warrantee fraud and costs. These grey distributors do not maintain any repair or parts facilities, have minimal promotion costs, etc. Lower costs = lower price. There SEEMS to be another category of grey equipment where an authorized dealer "dumps" gear in another distributor's territory. Again the serial numbers disappear from the system making it impossible for distributors to claim back any warrantee repairs. Why Leica allows people who are not distributors to buy gear, I do not know. Why Leica does not penalize distributors who dump gear in other distributor's territory, I do not know. The only reason I can think of is that Leica tolerates the ensuing mess because of the higher sales. That is only speculation on my part. Again this is meant to be an explanation of, NOT an apology for, the current state of affairs John Collier *If you have ever worked at an automotive dealership that has had a warrantee audit, you will know how horrible that can be. Certain companies even have denied that problems are problems and have stuck their distributors with trying to keep the customer happy without going broke. On Monday, February 10, 2003, at 12:52 PM, Austin Franklin wrote: > >> If, however, something comes in without proper documentation, and is >> truly "gray," the customer is charged the normal repair rates. > > I have to believe every Leica comes from Leica in the first place, and > Leica > only sells the cameras to authorized Leica dealers, I mean, if Leica > sells > it to them, they are obviously authorizing them to sell it, right? > So, how > can a camera exist that doesn't come from SOME "Leica authorized > dealer"? > > SNIP - -- To unsubscribe, see http://mejac.palo-alto.ca.us/leica-users/unsub.html