Re: [Leica] How can a Leica not come from an "authorized Leica dealer"?

[Jerry Lehrer <jerryleh@pacbell.net>]

John

That is an excellent exposition, and clearly explains how
a Leica CAN come from other than an authorized dealer.

Jerry

John Collier wrote:

> 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
>
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